Business Policy Essay Example | Topics and Well Written Essays - 3000 words

Business Policy - Essay Example Strategic management is a complex process which has the following steps: Establishing the strategic intent: Strategic intents include defining the ‘mission, vision and the objective’ of the organization. Vision is that broad spectrum where the organization wants to go. It signifies what the organization wants to achieve. It is the long term goal which the organization wants to achieve. It is the purpose of the business. The vision of the company should be very clear so that the company could identify where it is heading to. Good visions can inspire and exhilarate the employees as well as the management. Mission statement links the organization with the society. It states why the company exists. Mission statements comprises of a set of activities which are related not only with the individual but also with the global and national needs and priorities. Mission statements should be short but clear, feasible and distinctive and should motivate the employees as well as the cu stomers. They must feel that working in that organization is worthwhile. The mission statement signifies how the company can achieve the objectives. Objectives can be defined as the set of targets which the company has to achieve in a given period of time. These are the short term goals of the organization. Objectives are specific compared to goals which are more general in nature. The organization’s vision is achieved through its objectives. It enables the management to concentrate on those areas where strategic decisions should be taken. Objectives should be clear and precise, time bound, measurable, achievable, challenging and should be made keeping in view the available recourses. All the objectives must correlate with each other. Strategy formulation: Once the vision, mission and the objective of the organization is determined the next step is to formulate the strategy. Strategy formulation involves deciding on the strategies which are to be implemented to achieve the or ganizational objectives. Formulation of strategy starts with scanning the environment. Environment includes both internal as well as the external environment affecting the organization. These environmental factors are then analyzed through various techniques; these are SWOT analysis, PEST analysis, Porter’s five force model etc. SWOT analysis enables the company to analyze its strength and weakness and also the opportunities it have and the threats it is facing. It is very important tool in making strategic decisions. PEST analyses the various political, economic, social and technological factors affecting the organization. After this the organization decides upon the corporate level strategies that is whether they have to integrate its activities or diversify. Decisions are taken on whether there will be vertical diversification that is a new product should be made or not, horizontal diversification that is whether the company should make a new brand or merge with someone to make that product or they shall outsource the work to some organization. In case the company is incurring loss then the company has to decide on the options of retrenchment, selling a part of the company that is divesture or whether they should liquidate the