Business Policy and Strategy Lecture 04 1Business Policy and Strategy

Recap Important Terminologies in Business strategy and policy – Vision & Mission Comparison of vision and mission – Long Term Objectives – Strategies – Policies – Strategists 2Business Policy and Strategy

Today’s Lecture SWOT Analysis – Example Intuition and analysis – Pillars of intuition – Benefits of intuition in decision making Business Policy and Strategy3

SWOT Analysis Albert S Humphrey in the 1960s – Strengths and weaknesses are often internal to your organization – Opportunities and threats generally relate to external factors Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix. Business Policy and Strategy4

Strengths What advantages does your organization have? What do you do better than anyone else? What unique or lowest-cost resources can you draw upon that others can't? What do people in your market see as your strengths? What factors mean that you "get the sale"? What is your organization's Unique Selling Proposition (USP)? Business Policy and Strategy5

Unique Selling Proposition (USP) USP is the unique thing that you can offer that your competitors can't. – It's your "Competitive Edge." – It's the reason that customers buy from you and you alone. – USPs have helped many companies succeed However, USPs are often extremely difficult to find. And as soon as one company establishes a successful USP in a market, competitors rush to copy it Business Policy and Strategy6

Weaknesses -What could you improve? -What should you avoid? -What are people in your market likely to see as weaknesses? -What factors lose you sales? -It's best to be realistic now, and face any unpleasant truths as soon as possible Business Policy and Strategy7

Opportunities -What good opportunities can you spot? -What interesting trends are you aware of? -Useful opportunities can come from such things as: – Changes in technology and markets on both a broad and narrow scale. – Changes in government policy related to your field. – Changes in social patterns, population profiles, lifestyle changes, and so on. – Local events. Business Policy and Strategy8

Threats -What obstacles do you face? -What are your competitors doing? -Are quality standards or specifications for your job, products or services changing? -Is changing technology threatening your position? -Do you have bad debt or cash-flow problems? -Could any of your weaknesses seriously threaten your business? Business Policy and Strategy9

SWOT Matrix Business Policy and Strategy10 Strengths List 4-5 internal strengths here Weaknesses List 4-5 internal weaknesses here Opportunities List 4-5 external opportunities here S-O strategiesW-O strategies Threats List 4-5 external threats here S-T strategiesW-T strategies

Intuition Analysis Business Strategy tries to bring together qualitative and qualitative information Intuition rests on: – Past experiences – Judgment – Feelings Business Policy and Strategy11

Intuition Analysis Intuitions help in decision making where: – Uncertainty prevails – Little or no precedence exists – Highly interrelated variables exist – A choice from various possible alternatives is needed – Intuition and analytical judgment requires inputs from all managerial levels – Analytical thinking and intuitive thinking complement one another Business Policy and Strategy12

Summary SWOT Analysis – Strengths – Weaknesses – Opportunities – Threats Intuition Analysis Business Policy and Strategy13

Next Lecture Vision and Mission Statement – Where we are and where we would like to be What is our business? “What do we want to become?” – Examples of Vision and Mission Statement Business Policy and Strategy14