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Policy 2 By Dr. Muhammad Zia-ur-Rehman

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1 Policy 2 By Dr. Muhammad Zia-ur-Rehman
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, Policy 2 By Dr. Muhammad Zia-ur-Rehman Academician, Trainer and Consultant HEC Approved Ph.D. Supervisor Ph.D., MA Eng., MPM, MBA, M.Ed., LLB By: Prof. Dr. M. Zia-ur-Rehman, Copyright ® Prof. Dr. M. Zia-ur-Rehman By: Prof. Dr. M. Zia-ur-Rehman,

2 The Five Tasks of Strategic Management
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, The Five Tasks of Strategic Management Task 1 Task 2 Task 3 Task 4 Task 5 Develop a Strategic Vision and Mission Set Objectives Craft a Strategy to Achieve Objectives Implement and Execute Policy Monitor, Evaluate, and Take Corrective Action Revise as Needed Revise as Needed Improve/ Change Improve/ Change Recycle as Needed By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

3 Quick Review Task 1 Task 2 Task 3 Task 4 Task 5

4 1. Developing a Strategic Vision
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, 1. Developing a Strategic Vision Involves thinking strategically about Firm’s future business plans Where to “go” Tasks include Creating a roadmap of the future Deciding future business position to stake out Providing long-term direction Giving firm a strong identity By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

5 Characteristics of a Strategic Vision
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, Characteristics of a Strategic Vision By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, A roadmap of a company’s future Future technology-product-customer focus Geographic and product markets to pursue Capabilities to be developed Kind of company management is trying to create By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

6 2. Set the objectives Types of Objectives
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, 2. Set the objectives Types of Objectives By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, Financial Objectives Strategic Objectives Outcomes focused on improving financial performance Outcomes focused on improving long-term, competitive business position $ Examples of financial objectives: Grow earnings per share 15% annually Boost annual return on investment (or EVA) from 15% to 20% within three years Increase annual dividends per share to stockholders by 5% each year Strive for stock price appreciation equal to or above the S&P 500 average Maintain a positive cash flow every year Achieve and maintain a AA bond rating Examples of strategic objectives : Capture attractive growth opportunities Increase firm’s market share Overtake key rivals on quality or customer service or product performance Attain lower overall costs than rivals Boost firm’s reputation with customers Attain stronger foothold in international markets Achieve technological superiority Become leader in new product introductions By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

7 3. Crafting a Policy Involves deciding how to
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, 3. Crafting a Policy Strategy involves determining whether to Concentrate on a single business or several businesses (diversification) Cater to a broad range of customers or focus on a particular niche Develop a wide or narrow product line Pursue a competitive advantage based on Low cost or Product superiority or Unique organizational capabilities Involves deciding how to Respond to changing buyer preferences Respond to new market conditions Grow the business over the long-term Achieve performance targets Outcompete rivals Our strategy will be . . . By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

8 4. Implementing and Executing
By: Prof. Dr. M. Zia-ur-Re4.hman, By: Prof. Dr. M. Zia-ur-Rehman, 4. Implementing and Executing Taking actions to put a freshly-chosen strategy into place Supervising the ongoing pursuit of strategy Improving the competence and efficiency with which the Policy is being executed Showing measurable progress in achieving the targeted results and objectives By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

9 5. Monitoring, Evaluating, and Taking Corrective Actions as Needed
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, 5. Monitoring, Evaluating, and Taking Corrective Actions as Needed The tasks of crafting, implementing, and executing a strategy are not a one-time exercise Customer needs and competitive conditions change New opportunities appear; technology advances; any number of other outside developments occur One or more aspects of executing the strategy may not be going well New managers with different ideas take over Organizational learning occurs All these trigger the need for corrective actions and adjustments By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

10 A Company’s Policy can be Partly Planned and Partly Reactive
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, A Company’s Policy can be Partly Planned and Partly Reactive Abandoned strategy features Company Experiences, Know-how, Resource Strengths and Weaknesses, and Competitive Capabilities Planned Strategy New initiatives plus ongoing strategy features continued from prior periods Actual Company Strategy Adaptive reactions to changing circumstances Reactive Strategy By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

11 The Hows That Define a Firm's Policy
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, The Hows That Define a Firm's Policy Strategy is HOW to . . . How to grow the business How to please customers How to outcompete rivals How to respond to changing market conditions How to manage each functional piece of the business and develop needed organizational capabilities How to achieve strategic and financial objectives By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

12 Understanding a Company’s Policy-- What to Look For
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, Understanding a Company’s Policy-- What to Look For Actions to diversify Actions to outcompete rivals Responses to changing external circumstances Actions to strengthen resources & capabilities Pattern of Actions That Define Strategy How functional activities are managed Actions to alter geographic coverage Efforts to pursue new opportunities or defend against threats Actions to merge or acquire rival companies Actions to form strategic alliances and collaborative partnerships By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

13 Strategic Priorities of McDonald’s
Continued growth Providing exceptional customer care Remaining an efficient and quality producer Developing people at every organizational level Sharing best practices among all units Reinventing the fast food concept by fostering innovation in the menu, facilities, marketing, operation, and technology

14 What is a Policy based Plan?
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, What is a Policy based Plan? Where firm is headed -- Strategic vision and business mission Short and long term performance targets -- Strategic and financial objectives Action approaches to achieve targeted results -- A comprehensive strategy By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

15 Policy Implementation and Execution
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, Policy Implementation and Execution Policy implementation and execution is an action-oriented, “make-it-happen” process involving people management, developing competencies and capabilities, budgeting, policy-making, motivating, culture-building, and leadership By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

16 Who Performs the Five Strategic Management Tasks?
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, Who Performs the Five Strategic Management Tasks? Senior Corporate Executives Managers of Subsidiary Business Units Functional Area Managers Operating Managers By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

17 HELPS A COMPANY PREPARE FOR THE FUTURE!
By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman, Benefits of “Strategic Thinking” and a “Strategic Approach” to Managing Guides entire firm regarding “what it is we are trying to do and to achieve” Makes managers more alert to “winds of change, new opportunities, and threatening developments Unifies numerous strategy-related decisions and organizational efforts Creates a proactive atmosphere Promotes development of an evolving business model focused on bottom-line success Provides basis for evaluating competing budget requests HELPS A COMPANY PREPARE FOR THE FUTURE! By: Prof. Dr. M. Zia-ur-Rehman, By: Prof. Dr. M. Zia-ur-Rehman,

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