Business Policy & Strategic Analysis : M.B.A notes Define the term 'Strategy.

The term strategy is popularly used in military and politics. It comes from the Greek word Stratos (Army) and Agein (to lead). Strategy is the science pf planning and directing military operations. Strategy is the art and science of combining the many resources available to achieve the best match between an organization and its environment. 2.State the meaning of Vision. Vision:-A vision refers to the category of intentions that are broad, all inclusive and forward thinking. A vision describes aspirations for the future, without specifying the means that will be used to achieve those desired goals. Vision provides an orientation and defines the directions towards destination 3.What are mission statements? MISSION:-Mission statements reflects the corporate philosophy, identity and vision. It states the overall reason for the existence of an organization. "What is our business'? "What will be"? "What should be"? Are answered by the mission statement. In the words of John Pearce, a mission statement is "an enduring statement of purpose that distinguishes one business from other similar firms. A mission statement identifies the scope of a firm's operations in product and market terms. 4. Define strategic management. S/M is defined as the set of directions and actions resulting in formulation and implementation of strategies designed to achieve the objectives of an organization. S/M involves deciding and implementing strategies with the use of resources for ensuring existence and expansion of an enterprise. 5. What is environmental scanning? "The process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business" is known as Environmental scanning or analysis. It is the process of gathering information regarding organization's environment, analyzing it and forecasting the impact of all predictable environment changes 6.What is a Strategic Business Unit? (SBU)? The SBU concept was evolved by General Electric company of USA to manage its multi-product business. -Godrej, Hidustan Unilever SBU is a scientific method of grouping businesses of a multi business corporation which helps the firm in strategic planning. It helps right setting for correct strategic planning and facilitates correct relative priorities and resources to various businesses. The mission, objectives, competition and strategy will be different for each SBU. 7.What is Industry mapping? Plotting of Market position of strategic groups in the industry as competitors is known is industry mapping. Steps in mapping:_ 1.Select two broad characteristics /variables ( price & menu) 2.Differentiate the companies from one another 3.Encircle the strategic groups 8.What do you mean by the term competitive advantage? The term 'competitive advantage' refers to a situation when the profitability of a company is greater than the average profitability for all the firms in the industry. It is in an advantageous position over its rivals. The greater the extent to which a company's profitability exceeds the average profitability for its industry, the greater is its competitive advantage. Competitive advantage is essentially a position of superiority on the part of the firm in some function/factor/activity in relation to the competition.

9. What is agency theory? The agency theory tries to address the problems between the shareholders/owners and their Agents -Board of Directors. According to this theory, The agency problem arises when the interests of owners and agents conflict and when it is difficult for the owners to check the actions of the agents. 10. Expand:-PESTLE Political,Economical, Social, Technological, Legal Environments. Define the term strategic management. S/M is defined as the set of directions and actions resulting in formulation and implementation of strategies designed to achieve the objectives of an organization. S/M involves deciding and implementing strategies with the use of resources for ensuring existence and expansion of an enterprise. 2. What is a strategic business unit? The SBU concept was evolved by General Electric company of USA to manage its multiproduct business. Godrej, Hidustan Unilever This concept of SBU is relevant to multi-product, multi-business .enterprises. It may not be possible to provide separate strategic planning treatment to each one of its products/ businesses. SBU is a scientific method of grouping businesses of a multi business corporation which helps the firm in strategic planning. It helps right setting for correct strategic planning and facilitates correct relative priorities and resources to various businesses. 3. What is meant by Portfolio Analysis? In Investment management, the term Portfolio means a bundle of investments with varying degrees of risk and return. In Strategic Management, it means a bundle of products/ businesses in the hands of a firm/company. In S/M. portfolio analysis is a set of techniques that helps an organization in making strategic decisions with regard to individual businesses and products in the portfolio. It is also known as Corporate portfolio/business portfolio/product portfolio analysis 4. What is core competence? According to C.K.Prahalad and Gary Hamel , core competence is a fundamental, unique and inimitable strength of the firm. C/C provides the firm the access to a variety of products/ markets.2.It contributes significantly to customer benefits in the end products.3.It is an exclusive preserve of the firm and cannot be imitated easily by the competitors. A C/C is largely a technological competence, a competence at the root technology in particular. 5. What is a balanced scorecard? Balanced scorecard is a technique used to measure the performance of an organization. It is developed by Robert s.Kalpan and David P.Norton . The B/S attempts to do away with the bias in performance measures towards financial measures and tries to build a holistic system of measurement. B/S is a set of measures that gives top managers a fast but comprehensive view of the business. It includes financial measures that tell the results of actions already taken. It compliments the financial measures on customer satisfaction, internal processes and the organizations innovation and improvement activities-operational measures that are the drivers of future financial performance.

6. State the meaning of the term Benchmarking. A bench mark is a reference point for the purpose of measuring. The process of benchmarking is aimed at finding the best practices within and outside the industry to which the organization belongs to. The purpose of benchmarking is to find the best performers in an area so that one could match ones own performance with them and even overtake them. B/M can be defined as The practice of being humble enough to admit that someone else is better at something, and being wise enough to learn how to match and even surpass them at it 7. What are generic strategies? Generic strategies are the strategies which can be adopted by firms in general. There are four types generic strategies. A firm can adopt any of the following four generic strategies.1.Stability strategy2.Expansion strategy 3.Disinvestments strategy4.Combination strategy. 8. Define the term strategic evaluation and control. Defn:-SE&C may be defined as the process of determining the effectiveness of given strategy in achieving the organizational objectives and taking corrective action wherever required. 9. What is Business Process Reengineering? Definition of BPR:-Business Process Reengineering refers to the analysis and redesign of workflows and processes both within and between the organization. BPR is an approach to unusual improvement in operating effectiveness through the redesigning of critical business processes and supporting business systems. It is revolutionary redesign of key business processes that involves examination of the basic process itself. It looks at the minute details of the process.
BPR means starting all over, starting from scratch .Reengineering, in other words, means

pulling aside much of the age old practices and procedures of doing a thing developed over hundred years of management experience. It implies forgetting how work has been done so far, and deciding how it can be best done. 10. What is Visionary leadership? Visionary Leadership refers to a leadership style which can project the future correctly and formulate the mission and vision statements to achieve success. For example, Mr.N.R.NarayanaMurthy of Infosys, projected in 1989 that there will be a future for Business process outsourcing and the software development and with his team members, he succeeded.