Business Policies

• 1. What's the compay's present situation
• 2. Where does the company need to go from here?
• 3. How should it get there?

• How to grow the business
• How to please customers
• how to outcompete rivals
• How to manage each functional piece of business (R&D, production, marketing, HR, finance and so)
• How to respond to changing market condition
• How to achieve targeted levels of performance

• Trial and error organizational learning about what has worked and what has not worked
• Management's appetite for taking risks
• managerial analysis and strategic thinking about how best to proceed given market conditions and a company's circumstances

"amoung all the many different ways of competing we could have chosen, we have decided to employ this combination of competitive and operating approaches to move the company in the intended direction, strengthen its market position and competitveness, and boost performance"

• Appealing to buyers in ways to set the company apart from rivals and
• Carving out it's own market position

• Attract customers and
• produce competitive edge

• Improve its finacial perforamnce
• stregthen its competitive position, and
• gain competitive advantages over rivals

Operating with a competitive advantage is more profitable than operating without one

Operating with a competitive disadvantage nearly always results in below-average profitability

• an attractive number of buyers prefer tis product/services over those of rivals and
• The basis for this preference is durable

produces sustainable competitive advantage

Be the industry low cost provider by achieving a cost-based competitive advantage

Incorporate differentiating features such as superior products/service keyed to higher quality, better performance, wider selection, value-added services, or some other attribute

Focus on a narrow market niche by winning a competitive edge by doing a better job than rivals of serving the need and preferences of buyers in the niche

Develop expertise and resource strengths not easily imitated or matched by rivals Achieve a capablities-based competitive advantage

Actions to gain sales and market share via lower prices, more performance features, more appealing design, better quality or cust serv, wider product selection, or other such actions

Actions to respond to changing market conditions or other external factors

Actions to enter new geographic or product markets or exit existing ones

Actions to capture emerging market opportunties and defend against external threats to the company's business prospects

Actions to strenthen market standing and competitiveness by acquiring or mearging wit other companies

Actions to stregthen competitiveness via strategic alliances and collaborative partnerships

Actions and approaches used in managing R&D, production, sales and marketing, finance, and other key activities

Actions to strengthen competitive capabilities and correct competitive weaknesses

Actions to diversify the company's revenues and earnings by entering new businesses

• A company's strategy is a work in progress
• Changes may be necessary to react to
• Financial Crisis
• Fresh moves of competitors
• evolving customer prefernces
• Technological breakthroughs
• Emerging market opportunities
• changing political or enconomic climate
• New Ideals to improve strategy

• Proacative strategy elements included
• New intiatives plus ongoing strategy elements continued from prior periods

• Reactive Strategy elements
• Adaptive reactions to changing circumstances

These become the latest version of the company's strategy and the prior version of the companies strategy is abandoned

prohibitions of law and language of "though shalt not"

to issues of Duty and right vs "wrong"

What is the right thing to do?

Does not entail actions and behaviors that cross the line from "should do" to "should not do" (because such actions are unsavory, shandy, unconscionable, injurious to others, or harmful to the environment)

Allow managment to fufill its ethical duties to all stakeholders

Owners/shareholders - Rightfully expect some form of return on their invesment

Employees - Rightfully expect to be treated with dignity and respect for devoting their energies to the enterprise

Customers - Rightfully expect a seller to provide them with a reliable, safe product or service

Supplies Rightfully expect to have an equitable relationship with firms they supply and be treated faily

Community Rightfully expect pbusinesses to be good citizens in their community

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 ethcal codes of conduct and provide gudiance to employees in gray areas

Display genuine commitment to conduct business activities ethically

A business model addresses "how do we make money in this business?"

Look at revenue streams the strategy is expected to produce

Look at associated cost structure and potential profit margins

Do resulting earnings streams and ROI indicate the strategy has good potential to deliver acceptable profitability?

Stragey: deals with a company's competitive initiatives and business approaches

Business model concerns whether revenues and cost flowing from the strategy demonstrate a business can be profitable and viable

Goodness of fit test How well does the strategy fit the company's external and internal situation?

Competitive advantage test is the strategy helping the company acieve a sustainable competitive advantage?

Performance Test is the strategy resulting in better company performance?

A compelling need exists for managers to proactively shape how a firm's business will be conducted

A strategy -focused firm is more likelyt to be a strong bottom-line performer than one that views strategy as secondary

• Crafting and executing strategy are core management functions
• Among all things managers do, nothing affects a company's ultimate success or failure more fundamentally than how well its management team
• Charts a company's direction
• develops competitively effective strategic moves and guiness approaches, and
• Pursuses what needs to be done internally to produce good day=in/day=out strategy execution