Business Policy and Strategy
Lecture 04
Business Policy and Strategy
1
Recap
• Important Terminologies in Business strategy
and policy
– Vision & Mission
• Comparison of vision and mission
– Long Term Objectives
– Strategies
– Policies
– Strategists
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Today’s Lecture
• SWOT Analysis
– Example
• Intuition and analysis
– Pillars of intuition
– Benefits of intuition in decision making
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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.
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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)?
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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
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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
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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.
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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?
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SWOT Matrix
Opportunities
Strengths
Weaknesses
List 4-5 internal strengths here
List 4-5 internal weaknesses here
S-O strategies
W-O strategies
S-T strategies
W-T strategies
List 4-5 external
opportunities here
Threats
List 4-5 external threats
here
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Intuition Analysis
• Business Strategy tries to bring together
qualitative and qualitative information
• Intuition rests on:
– Past experiences
– Judgment
– Feelings
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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
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Summary
• SWOT Analysis
– Strengths
– Weaknesses
– Opportunities
– Threats
• Intuition Analysis
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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
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