BUSINESS POLICY &

STRATEGIC
MANAGEMENT
Amit Kane
MMS-Marketing, MBS-HR, DMM, Naturopath

Consider a local bakery that operates a

small cafe business. The cafe is open from
9am to 4pm, Monday to Friday. Competition
from a nearby supermarket and fast food
outlets is preventing the cafe business from
growing. What action could the cafe take to
increase sales?

The key issue to identify is why customers are choosing other outlets. Is it
because of location, price or product quality? Analysing a problem of this kind
needs a systematic approach.

Talking to customers about what they like, visiting other outlets to see the
competition and examining in-house data on costs, pricing and service could
provide valuable information. Based on this research, alternative courses of
action might include cutting costs in order to reduce prices or promoting the cafe
in different ways.

Books Recommended:1. A A Thompson Jr., A J Strickland III, J E Gamble, Crafting

& Executing Strategy
The Quest for Competitive Advantage, Tata McGraw Hill,
4th ed., 2005.
2. Ranjan Das, Crafting the Strategy: Concepts and Cases
in Strategic Management, Tata McGraw Hill, 2004.
3. Henry, Mintzberg, Bruce, Ahlstrand and Joseph, Lampel
(1998). Strategy Safari. Free Press, New York.
4. Gary, Hamel and Prahalad, C. K. (1999). Competing for
the Future. HBS Press.
5. Ed. C.A. Montgomery, M.E. Porter, Strategy Seeking
and Securing Competitive
Advantage, Harvard Business Review Publications, 1991.
6. Peter F. Drucker, Managing in a Time of Great Change,
Truman Talley Books /Plume Penguin Group, 1998.

Starbucks Strategy:The Key Elements

Expand number of Starbucks stores domestically by blanketing

metropolitan areas, then adding stores on the citys perimeter
Make Starbucks a global brand by opening stores in an
increasing number of foreign locations
View each store as a contributor to building the companys
brand and image
Broaden in-store products to include coffee-flavored ice cream,
teas, fresh pastries, music CDs, and coffee accessories
Fully exploit the growing power of the Starbucks name and
brand image with out-of-store sales
Display corporate responsibility and
environmental sustainability
Control costs of opening new stores
Promote customer-friendly service and enhance store
ambience by making Starbucks a great place to work

Without a strategy the

organization is like a ship
without a rudder.
Joel Ross and Michael Kami

Business Policy and Strategic Management

Business Policy definition by Christensen :

Business Policy is the study of the function and
responsibilities of Senior Management, the crucial
problems that affect success in the total enterprise,
and the decisions that determine the directions of
the organisation and shape of its future.

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Definitions of Strategy

Strategy is the determination of the long-term

goals and objectives of an enterprise and the
adoption of the courses of action and the
allocation of resources necessary for carrying out
these goals.

Strategy can be defined as the determination of

the basic long-term goals and objectives of an
enterprise, and the adoption of courses of action
and the allocation of resources necessary for
carrying out those goals.
(Alfred D. Chandler Strategy
and Structure)

Military Origins of Strategy

Strategy is a term that comes from the Greek
word, Stratos means army & agein
means to lead, .

In the military, strategy often refers to manoeuvring

troops into position before the enemy is actually
engaged. In this sense, strategy refers to the
deployment of troops. Once the enemy has been
engaged, attention shifts to tactics. Here, the
employment of troops is central.

Substitute "resources" for troops and the transfer of

the concept to the business world begins to take
form.

The
The Evolution
Evolution of
of Strategic
Strategic Management
Management

DOMINANT
THEME
MAIN
ISSUES
CONCEPTS
&
TECHNIQUES

IMPLEMENTATION

1950s

1960s

Early-mid Late1970s
1970s
early 1980s

Late 1980s Late 1990s

early 1990s early 2000s

Budgetary
planning &
control

Corporate
planning

Corporate
strategy

Quest for
competitive
advantage

Financial control

Planning growth

Diversifica- Positioning
ion

Competitive
advantage

Budgeting
project appraisal

Forecasting &
investment
planning

Portfolio
planning.
Synergy
market
share

Resource
analysis.
Case
competences

Emphasis on
financial
management

Rise of
corporate planning
departments
& formal
planning

DiversifiIndustry/market
cation.
selectivity.
Quest for
Active asset
global
management
market share

Analysis of
industry &
competition

Analysis of
industry &
competition

Strategic
innovation
The New
Economy
Innovation &
knowledge
Dynamic
sources of
advantage
Knowledge
management
cooperation

Restructuring Virtual orgaBPR.

nization.
Refocusing
Alliances
Outsourcing
Quest for
critical mass

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Evolution of Business Policy as

discipline.

Origin 1911- Harvard Business School Integrated

Course in Management aimed at providing general
management capability.

1930 -1960: Environment change: New Products:

Continuously changing market: Ford Foundation
recommended report, by Gordon and Howell, suggested
a Capstone course of Business Policy which would
give the students an opportunity to pull together what
they have learned in the separate business fields and
utilise this knowledge in the analysis of complex
business problems.

1969: The course was made mandatory by American

Assembly of Collegiate School of Business (AACSB)
1990: The course has become an integral part of
management education curriculum.

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Evolution of Business Policy as discipline.

Evolution of Business Policy has undergone four
Paradigms
Paradigm One: Ad-hoc Policy making.
1900 -1930: Era of Mass Production Maximising
output, Normally a Single Product, Standardised and
low cost product, catering to unique set of customers
servicing limited geographical area Informal control
and co-ordination. The Strategic planning was
centred on maximising output.

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Evolution of Business Policy has undergone four Paradigms

Paradigm Two Integrated Policy Formulation.

1930-1940: Changes in Technology, Turbulence in
Political environment, Emergence of new industries,
Demand for novelty products even at higher costs,
Product Differentiation, Market segmentation in
increasingly competitive and changing markets. These all
made investment decisions increasingly difficult. This was
era of integrating all functional areas and framing policies
to guide managerial actions.
Paradigm Three The Concept of Strategy.
1940- 1960: Planned policy became irrelevant due to
increasingly complex and accelerating changes. Firms
had to anticipate environmental changes. A strategy
needed to be formed with critical look at basic concept of
Business and its relationship to the existing environment
then.

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Paradigm Four The Strategic Management.

1980 & onwards: The focus of Strategic

Management is on the strategic process of business
firms and responsibilities of general management.
Everything out side the four walls is changing rapidly
and this phenomenon is called as Discontinuity
by Mr. Peter Drucker. Past experiences are no
guarantee as science and technology is moving
faster. The future is no more extension of the past or
the present.
The world is substantially compressed and managing
the External & Internal environment becomes crucial
function.
What to produce, where to market, which new
business to enter, which one to quit and how to get
internally stronger and resourceful are the new
stakes.
Strategic Planning is required to be done to endow
the enterprise with certain fundamental
competencies / distinctive strengths which could 14
take care of eventualities resulting from unexpected 14

What Is Strategic Management About?

Understanding how firms create, capture,

and sustain competitive advantage.

Analyzing strategic business situations and

formulating strategic plans.

Implementing strategy and organizing the firm

for strategic success.

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WHAT IS STRATEGIC MANAGEMENT

?

Strategic management is defined as the

art and science of formulating,
implementing, and evaluating crossfunctional decisions that enable the
organization to achieve its objectives.

Generally, strategic management is not

only related to a single specialization but
covers cross-functional or overall
organization

What Is Strategic Management About?

Sustainable competitive advantage

occurs when a firm implements a valuecreating strategy of which other companies
are unable to duplicate the benefits or find it
too costly to imitate.
An important basis for sustainable
competitive advantage is the development of
resources and capabilities.

Core competencies are resources and

capabilities (often related to functional-level
skills) that serve as a source of competitive
advantage for a firm over its rivals.
17

The heart and soul of any strategy are actions a

company makes to
Improve its financial performance,
Strengthen its competitive position, and
Gain a competitive advantage over rivals

A creative, distinctive strategy that sets a

company apart from rivals and yields a
competitive advantage is a companys most
reliable ticket to above average profitability
Operating with a competitive advantage is more
profitable than operating without one
Operating with a competitive disadvantage nearly always
results in below-average profitability

A company achieves sustainable

competitive advantage when

An attractive number of buyers prefer its

products/services over those of rivals and
The basis for this preference is durable

Its nice when a strategy produces

A temporary competitive edge but

A sustainable edge over rivals greatly enhances a
companys prospects for above-average
profitability

What separates a powerful strategy from an ordinary

strategy is managements ability to forge a series of
moves, both in the marketplace and internally, that
produces sustainable competitive advantage!

What Strategy is: Gaining and Sustaining

Competitive Advantage

What is Competitive Advantage?

Superior performance relative to competitors
Examples: Google, Pfizers Lipitor (patent
protection to 2010)

What is Sustainable Competitive Advantage?

Sustainable competitive advantage occurs when a
firm implements a value-creating strategy of which
other companies are unable to duplicate the benefits
or find
it too costly to imitate.
An important basis for sustainable competitive
120
advantage
is the development
of

Competitive Advantage Examples

Strive to be industrys low-cost provider

Wal-Mart
Southwest Airlines

Outcompete rivals on a key differentiating

feature
Johnson & Johnson Reliability in baby
products
Harley-Davidson King-of-the-road styling
Rolex Top-of-the-line prestige
BMW Engineering design and performance
Amazon.com Wide selection and
convenience

Competitive Advantage Examples

Focus on a narrow market niche

(cont)

eBay Online auctions

Best Buy Home electronics
McAfee Virus protection
Starbucks Premium coffees and coffee drinks
The Weather Channel Info about the weather

Develop expertise, resource strengths, and

capabilities not easily imitated by rivals
Walt Disney Theme park management and family
entertainment
Dell Computer Build-to-order manufacturing
capabilities
Ritz-Carlton Personalized customer service

Strategy as a Theory of How to Compete

Provides a Manager's Roadmap

The strategic management process is a cycle
of analysis, formulation, implementation, and
feedback.
Apple Newton flops in 1993
PalmPilot (Jeff Hawkins) learned from Apple
Newtons mistakes
Wal-mart' (Sam Waltons) assumptions about low
costs,
low prices, and high volume to drive
profitability

What is Strategy?
Definition: Strategy is the quest to create, capture
and
sustain competitive advantage.
It is the managers theories/maps about how to gain and
sustain competitive advantage.
It is about being different from your rivals.
It is about creating value while containing cost.
It is about deciding what to do, and what not to do.
It combines a set of activities to stake out a unique position.
It has alternatives, consequences, and choices involving
significant resources, typically made under some level of
uncertainty.
It requires long-term commitments that are not easily
reversible.

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The Role of Strategy In Business is to Generate and

Sustain Value via the Linkages Between Position, Resources,
and Organization

Positioning

Resource
s
&
Capabiliti
es

Organization

25

Positioning

Scope of the Firm:

Geographic Scope
Product-market Scope: Choice of businesses
(corporate
portfolio analysis)
Product Market Positioning
within a business
Vertical integration
decisions
26

Resources

Tangible Resources
e.g., physical capital

Organizational Capabilities

e.g., routines and standard operating

procedures

Intangible Resources

e.g., trademarks, know-how

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Organization

Structure

Formal Definition of authority

Conflict Resolution

Systems

Rules, Routines, Evaluation and rewards

Processes

Informal communication, networks,

recruitment
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Core concepts & characteristics of Strategy

A plan or course of action or a set of decisions rules

forming pattern or creating a common thread.
The pattern or common thread related to the
organisations activities which move an organisation
from its current position to a desired to a desired
future stage
Related to pursuing those activities which move an
organisation from its current position to a desired
future state,
Concerned with the resources necessary for
implementing a plan or following a course of action
and,
Connected to the strategic positioning of a firm,
making trade-offs between its different activities, and
creating a fit among these activities.
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The
The Basic
Basic Framework
Framework
Strategy:
Strategy: the
the Link
Link between
between the
the
Firm
Firm and
and its
its Environment
Environment
THE FIRM
Goals &
Values
Resources &
Capabilities
Structure &
Systems

STRATEGY
STRATEGY

THE
INDUSTRY
ENVIRONMENT
Competitors
Customers
Suppliers

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Why Do Strategies
Evolve?

A companys strategy is a work in

progress
Changes may be necessary to react to

Financial crisis
Fresh moves of competitors
Evolving customer preferences
Technological breakthroughs
Emerging market opportunities
Changing political or economic climate
New ideas to improve strategy

A Companys Strategy Is a Blend of

Proactive Initiatives and Reactive Adjustments

1-32

Essence Of Strategy

1.

2.

3.

4.

Strategy includes the determination and evaluation of

alternative paths to an already established Mission and
Objectives of enterprise and choosing the alternative to be
adapted. Four important aspects of Strategy are:
Long Term Objectives: It emphasises on long term growth
and development. These Objectives give direction for
implementing Strategy.
Competitive Advantages: The external environment is
continuously monitored & Strategy is made to have the firm
a continuous Competitive Advantage.
Vector: is a Direction with Force. Series of actions are to be
taken & they should have same direction for whole
organisation.
Synergy: Once a series of decisions are taken to
accomplish the objectives in same direction, there will be
synergy. Synergy can happen due to Competitive
Advantages and Growth Vector. The Objectives need be
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measurable and could be : ROI, Sales Growth Rate,
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Strategy v/s Policies

Strategy & Policy are not

synonymous.
Policy is guideline for
decisions & actions to be
taken by subordinates for
the fulfilment of the set of
objectives.
Policies are commonly
accepted understanding
of decision making.
Policies are thought
oriented.
Policies have to be
integrated so that
Strategy is implemented
successfully and
effectively.
Strategy and policies both
are the means directed
towards meeting
organisational objectives.

Strategies are concerned

with the direction in which
human and physical
resources are deployed to
maximise the chances of
achieving organisational
objectives in face of
variable environment.
Strategies are specific
actions suggested to
achieve objectives.
Strategy is action oriented
and empowers concerned
to implement them.
Strategy cannot be
delegated downwards.
Strategy is rule for
making decision and
Policy is contingent
decision.
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34

Henry Mintzberg (pictured above,) Bruce Ahlstrand and

Joseph Lampell, in their 2005 book Strategy Bites
Back, present 5 "P's" as a way to define strategy. Each
"P" shines a spotlight on what strategy is / means /
encompasses from a different angle, to provide a
comprehensive overview that is probably more useful
than definitions that try to fit all into a couple of
sentences.
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35

Mintzerbgs 5Ps of strategy

1.

2.

3.

4.

5.

Henry Mintzberg, in his 1994 book, The Rise and Fall of

Strategic Planning, points out that people use "Strategy"
in several different ways, the most common being these
five:
Strategy is a Plan, a "how," a means of getting from here
to there.
A strategy can be a Ploy too; really just a specific
manoeuvre intended to outwit an opponent or competitor.
Strategy is a Pattern in actions over time; for example, a
company that regularly markets very expensive products
is using a "high end" strategy.
Strategy is Position; that is, it reflects decisions to offer
particular products or services in particular markets.
Strategy is Perspective, that is, vision and direction.
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36

One might start with a perspective and

conclude that it calls for a certain position,
which is to be achieved by way of a carefully
crafted plan, with the eventual outcome and
strategy reflected in a pattern evident in
decisions and actions over time.

This pattern in decisions and actions defines what

Mintzberg called "realized" or emergent strategy.

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37

Mintzerbgs 5Ps of
strategy
The 5 "P's," adjusted where necessary to fit into the
professional services / Industrial firms, are as follows:
1. Strategy is a PLAN
To almost anyone you care to ask, strategy is a plan - some
sort of consciously intended course of action, a guideline (or
set of guidelines) to deal with a situation. A kid has a
"strategy" to get over a fence; a firm has one to dominate a
market for a particular service or practice area. By this
definition, strategies have two essential characteristics: they
are developed consciously and purposefully.
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38

2. Strategy as a PLOY: Strategy can be a ploy, too, which is

really just a specific "manoeuvre" intended to outwit an
opponent or competitor. The kid may use the fence as a ploy
to draw a bully into his yard, where his Doberman Pincher
awaits intruders. Likewise, a firm may threaten to establish a
new practice area in order to discourage a competitor from
trying to do the same. Here the real strategy (as plan, that is,
the real intention) is the threat, not the new practice area
itself, and as such is a ploy. Threatened litigation often falls
into this category.

3. Strategy is a PATTERN: Strategy (whether as general

plans or specific ploys) is pointless if it cannot be realized. In
other words, defining strategy as a plan or ploy is not
sufficient; we also need a definition that encompasses the
resulting behaviour. Thus, strategy is also a pattern specifically, a pattern in a stream of actions. By this
definition, strategy is consistent in behaviour, whether or not
intended. The outcome of strategy does not derive from the
design, or plan, but from the action that is taken as a result.
39

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4. Strategy is a POSITION: Strategy is also a position;

specifically a means of locating a firm in its environment.
In ecological terms: strategy becomes that firm's
"niche." In management terms: a "domain" consisting of
a particular combination of services, clients and markets.
Position is often defined competitively (literally so in the
military, where it becomes the site of a battle.)
5. Strategy is a PERSPECTIVE: While position is
outwardly focused, perspective looks inward into the
firm; even into the heads of the strategists themselves.
Some firms are aggressive pacesetters; others build
protective shells around themselves. Almost every
profession has about it unique perspectives, that
indelibly flavour the strategies that firms practicing
those professions craft for themselves. A law firm's view
of their business is fundamentally different to that of an
accounting firm, and engineering firm or a graphic
design studio, yet all are staffed by professionals.
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Plan provides the roadmap by which the firm

intends to achieve its goals. Ploys add a
dimension of feint and manoeuvre, where one
firm's gain is another's loss and competitive
advantage is critical.
Pattern emphasizes that strategy is not a onceoff event but a constant stream of decisions and
resultant actions that drive the firm forward, over
time, towards its goal.
Position adds that different firms have different
mixes of markets, clients and services that they
provide to those clients.
Perspective provides an insight onto how the firm
and its strategists are informed by their own
professions, their perceptions of business, and the
unique characteristics of each firms own "world."

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The Strategy Hierarchy

In most (large) corporations there are several levels of strategy.
Strategic management is the highest in the sense that it is the
broadest, applying to all parts of the firm. It gives direction to
corporate values, corporate culture, corporate goals, and corporate
missions. Under this broad corporate strategy there are often
functional or business unit strategies
Different Levels of Strategy
Levels

Structure

Corporate

SBU

Functional

Strategy
Corporate Level

Corporate Office

SBU - A

Finance

Personnel

SBU - B

SBU - C

Marketing

Operations

Information

Business level

Functional Level

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42

Strategy Formulation and Implementation Across

Levels:
Corporate, Business, and Functional Strategy

Strategy Across the Levels

Where to Compete?
Should GE move more
aggressively into the
health care industry?

CORPORATE
STRATEGY

BUSINESS
STRATEGY

FUNCTIONAL
STRATEGY

How to Compete?
Should GE jet engines
have better fuel efficiency
than Rolls Royce?

How to Implement?

Should GE human
resources recruit more
science graduates?

Levels of Strategy

Corporate Level: Typically involves decision-making by

the top management team that includes the CEO,
senior executives, the board of directors, and the
corporate staff. Decisions include vertical integration,
diversification, strategic alliances, acquisitions, new
ventures, and restructuring.

Business Level: Includes the strategic choice of

generic strategy (cost leadership, differentiation, focus)
and the benefits and costs of first-mover advantages.
Often an enterprise participating in multiple businesses
will have different business strategies.

Functional Level: Typically directed at improving the

effectiveness of functional operations within a company,
such as manufacturing, materials management, human
resources, marketing, R&D and operations
management.
145

Operational Strategy
The lowest level of strategy is operational strategy. At this
level, detailing is done to add completeness to Business &
Functional Strategies. It is very narrow in focus and deals with dayto-day operational activities such as scheduling criteria. It must
operate within a budget but is not at liberty to adjust or create
that budget. Operational level strategy was encouraged by Peter
Drucker in his theory of Management By Objectives (MBO).
Operational level strategies are informed to business level
strategies which, in turn, are informed to corporate level
strategies. These strategies are executed by Brand Managers,
Operating Managers, Plant managers. Important activities like
Advertising, Web site operations, distributions are involved at this
level.

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46

Strategic Management Process Definition of Strategic Management: Strategic

management is defined as the dynamic process of
formulation, implementation, evaluation and control
of strategies to realise the Organisations Strategic
intent.

Establish
Strategic
Intent

Formulation
of
Strategies

Implementation
of
Strategies

Strategic Control

Strategic
Evaluation

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47

Strategic Management Process-1

Strategic Intent:

Creating & Communicating the Vision.

Defining the Business.

Designing a Mission Statement.

Adopting the Business Model.

Clarifying the business mission, purpose & setting

broad Objectives and Goals.
Formulation of Strategies:
6.
External Environment Survey. SWOT Analysis.
7.
Internal Appraisal of the firm.
8.
Setting Corporate Objectives.
9.
Formulating the Corporate objectives.
10. Formulating the Corporate strategies.
11. Exercising Strategic Choice.
12. Preparing a Strategic Plan.
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Strategic Management Process-2

Implementation of Strategies:
13. Activating Strategies.
14. Designing Structure, Systems and processes.
15. Managing Behavioural Implementation.
16. Managing Functional Implementations.
17. Operationalising Strategies.
Performing Strategic evaluation & Control:
18. Performing Strategic evaluation.
19. Exercising Strategic Control.
20. Reformulating Strategies.

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Relevance of strategy in current

business environment
Financial benefits-improved growth & profitability
Enhanced capacity of problem preventions
Improved quality of strategic decision through group
interaction
Employee motivation
Reduction of gaps & overlaps in activities
Minimum resistance to changes

Strategic Intent & Strategy

Formulation

Strategic Intent

Strategic Intent is combination of four levels in the Management. It

involves discussions of Vision, Mission, Business Definition & Goals
and Objectives.
Strategic Intent refers to the purposes the Organisation strives for.
Strategic Intent lays down the frame work within which firms would
operate, adopt a predetermined direction, and attempt to achieve the
Goals.
Strategic Intent envisions a desired leadership positioning and
establishes the criterion the Organisation will use for charting its
progress.
In addition to ambitions of the Organisation; it encompasses active
Management Process that includes focussing the organisations
attention on winning.
It covers motivating the people by communicating the values,
targets. The intent encourages individual and team contributions and
attempts sustaining enthusiasm by providing new operational
definitions. The Strategic Intent guides the organisation through
changing circumstances and guides use of resource allocations.

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Process of strategy
formulation
1. setting company objectives
2.Analusing the environment
3.fixing quantitative targets
4. Relate targets to Divisional Plans
5.Performance Analysis
6.Selection of appropriate strategy

Defining the business

:- A clear-cut statement of the business, the firm is

engaged in or planning to enter. It is elaboration of the
business arena and the boundaries in which it will play.
What is our business? What will it be? What should it be?
Defining business involves three dimensions, namely
Customer Functions, Customer Groups and
Alternative technologies.
Business Definition clarifies the opportunities business
can pursue and the areas in which these opportunities
are to be looked for. It clarifies to the firm the various
sources from which threats and competition will come
for.
Defining Customer functions and Customer groups
provides Blue Print and a reference point for Productmarket strategy. Mission Statement provides the basic
inputs for Business definition and provides a broad frame
work.
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Some Business definitions:

Modi Zerox : Focus as a service organisation rather than
vendor of zerox machines. Customer focus: Office
Communication with high priced and low priced
equipments, marketing services of maintenance and per
copy price. Customer Function: Availability of spares,
Drums, Toner, good after sales service. Technology:
Collaboration with Rank Zerox
Helen Curtice: We are in beauty enriching business. We
will pursue ideas that would generate products enhancing
beauty and youthfulness of men and women.
Intel: We are in the business of computing technology and
to consistently develop the artifice/building blocks of
computing technology for the entire computer industry of
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the world is our business.

55

strategic planning process

Policies

A policy is a broad guide line for decisionmaking that links the formulation of strategy with
its implementation. Companies use policies to
make sure that employees throughout the firm
make decisions & take actions that support the
corporations mission, objectives & strategy.
Philosophy

The statement of philosophy is defined as an

explanation of the systems of beliefs that
determine how a mission or a purpose is to
be achieved. An organisations philosophy
states the beliefs, concepts and principles of
an organization.

Vision
Mission states what is our business

Vision states what do we want to become

Vision Statement is permanent statement of a company. Vision is
future aspirations that lead to an inspiration. It defines the very
purpose of existence of a company. The vision of a company is a
direction for action for employees. The essence of a vision is
forward looking view of what an organisation wishes to become.
Kotter(1990) defines Vision as a description of an enterprise.
(an organisation, corporate culture, a business, a technology, an
activity) in future.
Vision statements reflect the ideal image of the organization in
the future.
They create a focal point for strategic planning and are time
bound, with most vision statements projected for a period of 5 to
10 years. The vision statement communicates both the purpose
and values of the organization. For employees, it gives direction
about how they are expected to behave and inspires them to give
their best. Shared with customers, it shapes customers
understanding of why they should work with the organization.

Vision Statement

Vision Statement Samples:

"Year after year, Westin and its people will be regarded as the
best and most sought after hotel and resort management
group in North America." (Westin Hotels)
"To be recognized and respected as one of the premier
associations of HR Professionals." (HR Association of Greater
Detroit)

Vision Statement of TATA STEEL

TATA Steel enters the new millennium with the confidence of
learning, knowledge based and happy organisation. We will
establish ourselves as a supplier of choice by delighting our
customers with our service and products. In the coming
decade, we will become the most cost competitive steel plant
and so serve the community and the nation.

Vision Statement of Farm Fresh Produce

We help the families of Main Town live happier and healthier
lives by providing the freshest, tastiest and most nutritious
local produce: From local farms to your table in under 24
hours.

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Mission

A Mission Statement defines the organization's purpose and

primary objectives. Its prime function is internal to define the
key measure or measures of the organizations success and
its prime audience is the leadership team and stockholders.
Mission statements are the starting points of an organisations
strategic planning and goal setting process. They focus
attention and assure that internal and external stakeholders
understand what the organization is attempting to accomplish.
MISSION AND PURPOSE
Mission and purpose are used interchangeably, though at
theoretical level, there is a difference between two. Mission
has external orientation and relates the organization to the
society in which it operates. A mission statement helps the
organization to link its activities to the needs of the society
and legitimize its existence. Purpose is also externally focused
but it relates to that segment of the society to which it serves;
it defines the business which the institution will undertake.
61

Mission Statement

Mission of a company is expressed it terms of products

and geographical scope. It includes a methodology of
attaining the desired goal in vision. It defines the
competitive strength of a company and it emanates
from corporate vision and strategic posture of a
company.

Thus the mission of a business is a statement, a buildup philosophy of its current and future expected
position with regards to its products, market leadership.

Mission is statement which defines the role of

organisation plays in a society.

The corporate mission is growth ambition of the firm.

62

Mission
Characteristics of a Mission Statement

It should be feasible & It should be precise.

It should be clear & It should be distinctive.

It should be motivating.

It should be indicative of major component of

strategy

It should be indicative of how objectives are to be

accomplished.
63

Mission Statement of Ranabaxy

To become a $ 1 Billion research based global
(International) company pharmaceutical company
Mission Statement of Graphite India Limited
To be within top three companies in the world by
achieving 1,00,000 MT Production of Graphite
Electrodes before 2012
The mission statement of Farm Fresh Produce
is:
To become the number one produce store in Main
Street by selling the highest quality, freshest farm
produce, from farm to customer in under 24 hours
on 75% of our range and with 98% customer
satisfaction.
"Our goal is simply stated. We want to be the best
service organization in the world." (IBM)
"To give ordinary folk the chance to buy the same
thing as rich people." (Wal-Mart)
64

Bellevue Hospital

VISION
The Bellevue hospital
is the leader in
providing resources
necessary to realize
the communitys
highest level of health
throughout life.

MISSION
We, with respect,
compassion, integrity
and courage, honor
the individuality and
confidentiality of our
patients, employees
and are progressive in
anticipating and
providing future
health care services.

CALIFORNIA ENERGY
COMMISSION

VISION
It is our vision for
California to have
energy choices that
are affordable,
reliable, diverse, safe
and environmentally
acceptable.

MISSION
It is our mission to
assess, advocate and
act through
public/private
partnerships to
improve energy
systems that provide
a strong economy and
a healthy
environment.

Values

Values are traits or qualities that are considered

worthwhile; they represent an individuals highest
priorities and deeply held driving forces. (Values
are also known as core values and as governing
values; they all refer to the same sentiment.)

Value statements are grounded in values and

define how people want to behave with each other
in the organization. They are statements about
how the organization will value customers,
suppliers, and the internal community. Value
statements describe actions which are the living
enactment of the fundamental values held by most
individuals within the organization.
67

Samples of Values and Value Statements

"To preserve and improve human life." (Merck)

At Merck, "corporate conduct is inseparable from the conduct
of individual employees in the performance of their work.
Every Merck employee is responsible for adhering to business
practices that are in accordance with the letter and spirit of
the applicable laws and with ethical principles that reflect the
highest standards of corporate and individual behaviour...
"At Merck, we are committed to the highest standards of
ethics and integrity. We are responsible to our customers, to
Merck employees and their families, to the environments we
inhabit, and to the societies we serve worldwide. In
discharging our responsibilities, we do not take professional or
ethical shortcuts. Our interactions with all segments of society
must reflect the high standards we profess."
Patriot Ledger (SouthofBoston.com): "We have a total
commitment to these values, shaping the way we do business
for our employees, our customers and our company.
Our employees are the most valued assets of our company,
essential participants with a shared responsibility in fulfilling
our mission.
We recognize that the quality, motivation and performance of
our employees are the key factors in achieving our success.
68

The Difference between goals and objectives

Goals are broad; objectives are narrow.

Goals are general intentions; objectives are
precise.
Goals are intangible; objectives are
tangible.
Goals are abstract; objectives are concrete.
Goals can't be validated as is; objectives
can be validated

BUSINESS, OBJECTIVES AND GOALS

Abusiness(also known asenterpriseorfirm) is

anorganizationengaged in the trade ofgoods,services, or both
toconsumers. Businesses are predominant incapitalisteconomies, in
which most of them are privately ownedand administered to
earnprofitto increase thewealthof their owners.

Businesses may also benot-for-profitorstate-owned. A business

owned by multiple individuals may be referred to as acompany,
although that term also has a more precise meaning.

Goals : It is where the business wants to go in the future, its aim. It is

a statement of purpose, e.g. we want to grow the business into
Europe.

Objectives: Objectives give the business a clearly defined target. Plans

can then be made to achieve these targets. This can motivate the
employees. It also enables the business to measure the progress
towards to its stated aims.

Objectives of Business Policy:

Understand various concepts, like. Strategy,

policies, plans, programmes.

Knowledge of internal and external environment

and how it affects the functioning of the
organisation.

Application of generalised approach to deal with

wide variety of situations.

Development of analytical ability to understand

situation. Identify factors relevant to decision
making. Analyse strength, weakness, opportunities
and threats to organisation. Development of
attitude of generalist and asses a situation from all

71

Stakeholders are those parties which are affected by

it/those who affect it

73

Entities such as customers, suppliers, lenders, or

the wider society which influence and are influenced
by an organization but are not its 'internal part'

Stakeholder: Any party that has an interest in an

organization. Stakeholders of a company include
stockholders, bondholders, customers, suppliers,
employees, and so forth.

"The stakeholders in a corporation are the

individuals and constituencies that contribute,
either voluntarily or involuntarily, to its wealthcreating capacity and activities, and that are
therefore its potential beneficiaries and/or risk
bearers."

74

Stakeholder

Main Interests

Power and influence

Shareholders

Profit growth, Share

growth, dividends

Creditors

Can enforce loan covenants

Interest and principal to be
and Can withdraw banking
repaid, maintain credit rating
facilities

Directors and managers

Salary ,share options,

satisfaction, status

Employees

Salaries & wages, job security, Staff

turnover,
industrial
job satisfaction & motivation
action, service quality

Suppliers

Long term contracts, prompt Pricing,

quality,
payment, growth of purchasing availability

Customers

Reliable quality,
money,
product
customer service

Community

Environment, local jobs, local Indirect via local planning and

impact
opinion leaders

Government

Operate legally, tax receipts, Regulation,

jobs
taxation, planning

price

Election of directors

job Make decisions, have detailed

information

product

value for Revenue / repeat business,

availability, Word
of
mouth
recommendation

subsidies,

CORPORATE GOVERNANCE

Corporate governance generally refers to the set of mechanisms

that influence the decisions made by managers when there is a
separation of ownership and control.

The evolution of public ownership has created a separation

between ownership and management. Before the 20th century,
many companies were small, family owned and family run. Today,
many are large international conglomerates that trade publicly on
one or many global exchanges.

In an attempt to create a corporation where stockholders'

interests are looked after, many firms have implemented a twotier corporate hierarchy. On the first tier is the board of directors:
these individuals are elected by the shareholders of the
corporation. On the second tier is the upper management: these
individuals are hired by the board of directors.

Share holders

A shareholder or stockholder is an individual or institution

(including a corporation) that legally owns one or more shares
of stock in a public or private corporation. Shareholders own
the stock, but not the corporation itself.
Stockholders are granted special privileges depending on the
class of stock. These rights may include:
The right to sell their shares,
The right to vote on the directors nominated by the board,
The right to nominate directors (although this is very difficult
in practice because of minority protections) and propose
shareholder resolutions,
The right to dividends if they are declared,
The right to purchase new shares issued by the company

HIARACHY
Chairman

SOCIAL RESPONSIBILITY

Corporate social responsibility is the interaction

between business and the social environment in
which it exists. Bowen argued that corporate social
responsibility rests on two premises: social
contract, which is an implied set of rights and
obligations that are inherent to social policy and
assumed by business, and moral agent, which
suggests that businesses have an obligation to act
honorably and to reflect and enforce values that are
consistent with those of society.

79

Business provides goods & services to Society for which it pays the
price.
Society provides goods and services to Business for which it pays
the prices.
Business rewards inputs to society by paying
wages/profits/dividends etc.
Society and Business are interdependent. Their growth & welfare is
dependent on this mutuality. Business owes responsibility towards
society. A firm carrying very positive image in society has very strong
probability of lasting growth.
Society

Business
80

The three perspectives of corporate social responsibility are economic responsibility,

public responsibility, and social responsiveness.
The three perspectives represent a continuum of commitment to social
responsibility issues, ranging from economic responsibility at the low end and social
responsiveness at the high end.
The economic responsibility perspective argues that the only social responsibility of
business is to maximize profits within the rules of the game. Moreover, the proponents
of this viewpoint argue that organizations cannot be moral agents. Only individuals can
be moral agents.
In contrast, the public responsibility perspective argues that businesses should act
in a way that is consistent with societys view of responsible behavior, as well as with
established laws and policy.
Finally, the proponents of the social responsiveness perspective argue that
businesses should proactively seek to contribute to society in a positive way. According
to this view, organizations should develop an internal environment that encourages and
supports ethical behavior at an individual level.

The globalization of the business environment has had a

remarkable impact on issues of social responsibility. As
organizations become involved in the international field, they
often find that their stakeholder base becomes wider and more
diverse. As a result, they must cope with social responsibility
related issues across a broad range of cultural and geographic
orientations.
The four strategies for social responsibility represent a
range, with the reaction strategy on one end (i.e., do nothing)
and the proactive strategy on the other end (do much). The
defense and accommodation strategies are in the middle;
Reaction, defense, accommodation, and pro-action. Examples
of firms that have pursued these strategies are as follows:

Reaction: Over 40 years ago, the medical department of the Manville

Corporation discovered evidence to suggest that asbestos inhalation causes a
debilitating and often fatal lung disease. Rather than looking for ways to
provide safer working conditions for company employees, the firm chose to
conceal the evidence. It appears that tobacco companies have done the
same thing.
Defense: Over the years, rather than demonstrating social responsiveness in
terms of air pollution reductions, vehicle safety, and gas shortages, the
automobile companies did little to confront the problems head on. Currently,
the high demand for pickup trucks and SUVs encourages the problem to
continue.
Accommodation: Many financial service companies, along with meeting the
minimum requirements of disclosure regulations, maintain a more proactive
code for voluntary, on-demand disclosure of bank information requested by
customers or by any other member of the public.
Proaction: Becton Dickinson & Company is a medical-supply firm that has
targeted its charitable contributions to projects it believes will help eliminate
unnecessary suffering and death from disease around the world. Similarly,
Starbucks makes contributions to literacy programs and was one of the first
companies to give health benefits to partners.

Corporate Governance : Social Responsibility

Sole aim of a business is and should be maximisation of

Shareholders value, as stated by Milton Friedman, does
not hold good anymore. All modern large corporate have
attained their present size due to support of society in
terms of shareholders, suppliers, lenders, employees,
government, local community and society at large.
Every business unit of the country must aim at becoming
good corporate citizen of the country and the world as
whole. World Class Quality of goods and services,
reasonable prices is minimum requirement. With this
companies would enjoy excellent image within area,
country and world. Indian examples are Tatas, Birlas,
Reliance, Bajaj, L&T, Hero Honda, HDFC, Dr. Reddy
Laboratories. TCS, etc.
Industrial Corporate Citizens are trustees and should
utilise their wealth for the welfare of the society /
community. Trusteeship invokes code of discipline, ethical
behaviour and strong principle of accountability. Capital
and Labour have to have mutual, peaceful co-existence. 84

Corporate Governance : Social

Responsibility

Code of Ethics for Indian Business (by PHD

Chambers)
It is believed that the best way to promote high
standards of business practice is through self
regulation.
Business should be conducted in a manner that earns
the goodwill of all concerned through Quality,
efficiency, transparency & good values with objectives
as under:
a) Be faithful and realistic in stating claims.
b)
Be responsive to customer need and concerns.
c)
Treat all stakeholders fairly and with respect
d)
Protect and promote the Environment and
Community interests
85

Examples of a company stakeholders

Stakeholder

Examples of interests

Owners private/shareholders

Profit, Performance, Direction

Government

Taxation, VAT, Legislation, Low unemployment

Senior Management staff

Performance, Targets, Growth

Non-Managerial staff

Rates of pay, Job security

Trade Unions

Working conditions, Minimum wage, Legal

requirements

Customers

Value, Quality, Customer Care, Ethical products

Creditors

Credit score, New contracts, Liquidity

Local Community

Jobs, Involvement, Environmental issues, Shares

86

Linking Strategy With

Ethics

Ethical and moral standards address

What is the right thing to do?
Two criteria of an ethical strategy

Does not entail actions and behaviors that cross

the line from should do to should not do
(because such actions are unsavory, shady,
unconscionable, injurious to others, or harmful to
the environment)
Allows management to fulfill its ethical duties to
all stakeholders

A Firms Ethical Responsibilities

to Its Stakeholders

Owners/shareholders
Owners/shareholders Rightfully
Rightfully expect
expect some
some
form
form of
of return
return on
on their
their investment
investment
Employees
Employees Rightfully
Rightfully expect
expect to
to be
be treated
treated
with
with dignity
dignity and
and respect
respect for
for devoting
devoting their
their
energies
energies to
to the
the enterprise
enterprise
Customers
Customers Rightfully
Rightfully expect
expect aa seller
seller to
to
provide
provide them
them with
with aa reliable,
reliable, safe
safe product
product or
or
service
service
Suppliers
Suppliers Rightfully
Rightfully expect
expect to
to have
have an
an
equitable
equitable relationship
relationship with
with firms
firms they
they supply
supply
and
and be
be treated
treated fairly
fairly
Community
Community Rightfully
Rightfully expect
expect businesses
businesses to
to be
be
good
good citizens
citizens in
in their
their community
community
1-88

Role of Senior Executives:

Linking Strategy with Ethics

Forbid pursuit of ethically questionable

business opportunities
Insist all aspects of company strategy
reflect high ethical standards
Make it clear that all employees are
expected to act with integrity
Install organizational checks and balances
to
Monitor behavior
Enforce ethical codes of conduct
Provide guidance to employees in gray areas

Display genuine commitment to conduct

business activities ethically

A company's strategy can be considered ethical

A. if all of its different actions and elements are legal and
in compliance with governmental rules and regulations.
B. so long as its actions and behaviors can pass the test of
moral scrutiny and are aboveboard in the sense of not
being shady or unconscionable, injurious to others, or
unnecessarily harmful to the environment.
C. only if all elements of the strategy are in accord with
what is generally considered as being in the overall best
interests of society at large.
D. so long as religious authorities and noted ethics experts
find nothing wrong in the companys actions.
E. if it is in compliance with the companys code of ethics
and has been approved by the companys chief ethics
officer.

Strategic analysis

Strategic Analysis
Developing

theoretically

informed

understanding

of

the

environment in which an organisation is operating, together with an

understanding of the organisations interaction with its environment
in order to improve organisational efficiency and effectiveness by
increasing the organisations capacity to deploy and redeploy its
resources intelligently.
The two most important situational considerations are:

Industry and Competitive Conditions

Companys own competitive capabilities, resources, internal strength,

weakness, and market position.

Understanding companies environment (both internal and external)

will

create a winning strategy or else company will loose its

competitive advantage and companies performance will be affected.

Issues to Consider for

Strategic Analysis

Strategy evolves over a period of time: It involves study of

possible implications of small routine decisions taken over a
extended period of time and these decisions must be balanced.

Balance: Strategic analysis involves workable balance between

diverse and conflicting considerations. For example matching
internal potential of firm with environmental opportunities.
Constraint forces vary in nature, degree, magnitude, and
importance. These factors can be managed to certain extent.

Risk: As competitive markets grows, liberalization, globalization,

technological advancements, inter country relations pose risks
at varying degree. Thus strategic analysis should identify
potential imbalance / risk and assess their consequences.

Situational Analysis
External Environment
Internal Environment

Product Situation My current products

Competitive Situation Analyze the main competitors

Distribution Situation Review your distribution system

Environmental Factors Analyze the external and internal environment

Opportunity and Issues Analysis SWOT analysis

Frame Work of Strategic Analysis

ExternalAnalysis
Internal
Opportunities,
Strategic
Strategy
Analysis
Identification
Strengths,
Threats,
Weaknesses,
and
Trends,
Selection
and
Problems,
StrategicConstraints,
Uncertainties
and Weakness

Likely Strategic Moves of Rivals

A firms own best strategic moves are affected by

Current strategies of competitors
Future actions of competitors

Profiling key rivals involves gathering competitive intelligence

about their
Current strategies
Most recent moves
Resource strengths and weaknesses
Announced plans

Predicting Rivals Next Moves

Involves

Analyzing their current competitive positions

Examining public pronouncements about what it will take to be

successful in industry

Gathering information from grapevine about current activities and

potential changes

Studying past actions and leadership

Determining who has flexibility to make major strategic changes

and who is locked into pursuing same basic strategy

Analyzing Companys Resources and Competitive Position

A Competence is something an Organisation is good at
doing. It results out of accumulated learning and built-up
proficiencies. Examples are Proficiency in Merchandising,
Working with Customers, Proficiency in specific technology,
Proven capabilities.
A Core Competence is a proficiently performed activity that
is central to the Organisation Strategy. These are important
activities in which Company is better than other internal
activities. Examples are Good after sale service, Skills in
Manufacturing, High quality product at low Cost.
A Core Competence is knowledge & skill based residing in
people, and in Companys intellectual capital

Distinctive Competence

A Distinctive Competence is a competitively

valuable activity that Company performs better
than its rivals. It is Competitive superiority in
performing Core activity generating competitively
superior resource strength.
A strength that is superior / distinctive to
competition is competitive advantage.
Competitive advantage is a back-up for strategy
without which strategy will not work.
Competitive advantage finally results in either
cost advantage or differentiation advantage.
Creating entry barrier is also a way to built up
competitive advantage.
Building Competitive advantage is a conscious
and long term process.
Preparing Competitive Advantage Profile for the
organisation is based on internal appraisal and
industry-competition.
10
0

Organisational Capability
Organisational Capability is inherent capacity or
potential of an organisation to use its Strengths
and overcome Weaknesses to exploit
Opportunities & face Threats. It is a skill for
coordinating resources and putting them to
productive use. Without capability, resources,
even though valuable & unique, will be worthless.
Organisational Capability, though measurable,
remains a subjective attribute.

Organizational Capability Profile &

Strategic Advantage Profile:
Organisational
Resources
OR includes tangible,
Non-tangible, assets,
capabilities,
organisational
processes, Technology,
Plant & Equipments,
Human resources,
Information,
Knowledge, etc
Four Types of Resources
e.g. Valuable, Rare,
Costly to Imitate and
Non-Substitutable, will
eventually, lead to
Strategic Advantage.

Organisational
Behaviour
OB is manifestation of
forces and influence of
Internal Environment.
(like, Management
Philosophy, Quality of
Leadership, Shared
value, Culture, Quality
of Work, Work
Environment, Climate,
Politics, use of Power)
OB affects ability of
organisation to use its
resources.
OR is Hardware & OB is
software

10
2

Organisational
Resources

Organisational
Behaviour
Strength &
Weaknesses
Synergistic
Effects
Competencies
Organisational
Capabilities
Strategic
Advantages
10
3

Strategic Advantage

Strategic Advantage is result of Organisational

Capabilities. The advantages can be measured in terms
of Profit, Market Share, Growth etc. Negative results
indicate Strategic Disadvantages. When compared with
known identified rivals, the Strategic Advantage is also
known as Competitive Advantage. In an abundantly
profit making company, Competitive Advantage is used
as stimulus.

10
4

Organisation Capability Profile (OCP): 1

Organisation capability is nothing but sum total

of capabilities of various functional areas. Largely
accepted main functional areas could be named as
Finance, Marketing, Operations, Personnel,
Information and General Management. These could
be different for different types of organisations.
Operations Capability: includes Production of
Products and Services. Use of material resources,
some factors are:
Production System: Capacity, Location, Layout,
Product Design, Work systems, Automation, etc.
Operations & Control: Production Planning, Material
Supply, Inventory, Cost control, Quality control,
Maintenance System, Procedures, Standards etc.
R&D or Design: Facilities, Product development,
Patent rights, Technology, Collaboration, etc.
10
5

Organisation Capability Profile (OCP): 2

Financial Capability: is basically, availability,

usage and management of Funds. It depends upon
various factors for example:
Sources of funds:- Capital Structure, Capital
procurement, controllership, financing pattern,
working capital availability, borrowings, reserves &
surpluses, relations with banks, audit authorities.
Usage of funds:- Capital Investment, Fixed asset
acquisition, Current assets, Loans & advances,
Dividend distributions, Relations with Share Holders.
Management of funds:- Financial Accounting &
Budgeting Systems, Management control systems,
State of Financial health, Cash inflation, Credit & Risk
management, Cost reduction & Control, Tax planning.
Organisational Strength & Weaknesses related to
above factors is a measure of Financial Capability.
10
6

Organisation Capability Profile (OCP): 3

Marketing Capability: is basically, pricing,

promotion, penetration and distribution of
Product or Service. Marketing Capability Factors
are:
Product: Quality, Variety, Product Mix,
Differentiation, Positioning, Packaging etc.
Price: Pricing objectives & policies, Changes,
Protection etc.
Place: Distribution, Transportation, Logistics,
Marketing Channels, marketing intermediaries
etc.
Promotion: Tools used for promotion, Sales
Promotion, Advertising, Public Relations etc.
Systemic: Marketing Mix, Market Standings,
Company Image, marketing System, Marketing

10
7

Organisation Capability Profile (OCP): 4

Personnel Capability: is related to use of Human

resources & skills, aspects about ability to implement
strategies. Some of the Factors are:

Personnel System: Manpower planning, selection,

development, compensation, communication, appraisal,
Position of Personnel Dept. in organisation, etc.

Organisational Characteristics: Corporate Image &

Image as Employer, Quality of Managers, Staff &
workers, Working conditions, Developmental
opportunities, etc.

Industrial Relations: Union-Management Relations,

Collective bargaining, Safety, Welfare, Employee
satisfaction and moral, etc.
10
8

Organisation Capability Profile (OCP): 5

Information Management Capability: relate

to design & management of flow of information
for decision making. Some factors are:
Acquisition and retention of information: Sources,
Quantity, Quality, Timeliness, retention, security,
etc.
Processing of Information: Database
Management, Computer Systems, Software
Capability, Ability to synthesise.
Transmission & Dissemination: Speed, Scope,
Width, depth of coverage,
Integrative, Systemic, Supportive factors: IT
infrastructure, its relevance & compatibility to
organisational needs, Up-gradation, Computer
Professionals, Top management Support, etc
10
9

Organisation Capability Profile (OCP): 6

General Management Capability: relates to

integration, co-ordination and direction of the
functional capabilities. Some factors are:
General Management System: Strategic
management system, Strategy formulation,
Strategy implementation machinery, MIS,
Corporate planning, Rewards, Incentives, etc.
General Managers: Orientation, Risk-propensity,
values, norms, competence, track records, etc.
External Relationship: Influence & rapport with
Govt., Financial institutions, social
responsibilities,
Organisational Climate: Organisational cultures,
political processes, balance of vested interests,
Acceptance of management of change,
Organisational Structure & Control, etc.
11
0

Organisation capability Profile (OCP) : 7

The Organisation capability Profile (OCP) can

be prepared by systematically assessing the
various Functional areas and subjectively assign
values to the different functional capability factors
and sub-factors along a scale ranging from the
values -5 to +5.
Capability Factor Rating
--------------- -----------------------------------------------Factor Weakness Normal Strength
-5 0 +5
----------------------------------------------------------------Sources of Funds -5-4-3-2-1-0+1+2+3+4+5= +3
After completion of charts for all the factors and
sub-factors mentioned above, Strategists can
assess Weaknesses and Strengths of the
organisation in each of the six functional areas.
11
1

Preparing the Strategic Advantage

Profile (SAP):

Capability Factor
Strength & Weaknesses
Finance
High cost of capital.
Marketing
secured

Operations Plant & Machinery in critical situation

Personnel

Management

good

11
2