Term Paper on "Business Management and Business Policy"

Term Paper 6 pages (1740 words) Sources: 3 Style: APA

[EXCERPT] . . . .

Business Management and Business Policy

Review the Strategic Management Model (figure 1-2,-page 11) and the Strategic Decision-Making Process (figure 1-5, pages 22-23). Compare and contrast the two models, and reconcile the strategic decision-making process with the strategic management model. Do the two models complement each other or do they clash? Explain your answer.

In any strategic planning process the need to measure and monitor both external market forces, interrelationships and competitive dynamics on the one hand while aligning opportunities with internal strengths on the other is a critical component of any successful strategic plan. The comparison and contrast of the Strategic Management Model and the Strategic Decision Making Process illustrate the need to stay outward focused on the market, while aligning strategies for capitalizing on market opportunities with internal strengths. Both of these models specifically look to capture market opportunities and align internal strengths through strategies to fulfill them. Yet the Strategic Decision Making Process takes the approach of validating through the continual use of SWOT analyses how market opportunities and internal strengths align with each other. The Strategic Management Model on the other hand looks to create a more deductive flow of logic beginning with a top down process of strategy formulation through strategy implementation, ending with an evaluation and control series of steps at the end of the process.

In comparison, both models look to quantify and measure the overall market, one through a deductive approach (Strategic Management Model) that drives strategic plans from external opportunities and threats, while the Strategic Decision Making Process focuses on first defining the strategic objective and then looking for opportunities in the market to fulfill it. This major difference in philosophy between each of these approaches can lead to significantly different results as well. From this standpoint, the models clash specifically in the area of how strategic objectives are first defined, then brought through execution. The use of the Strategic Management Model will yield more market-driven strategy formulation and results while the Strategic Decision Making Process will deliver strategies more attuned to internal strategic direction.

The impact of globalization and the Internet presents real challenges for corporate strategic planners across the world. What is the impact of globalization and the Internet on corporations? Why is astute strategic planning a must in today's competitive business world?

From a strategic planning perspective, globalization has led to advances in the strategic planning process not possible before the Internet became a pervasive information and commerce platform. The ability to create and execute strategic plans with much more precision, in a much more targeted approach, is now possible given globalization. Conversely, globalization requires the strategic planning process to take into account more factors than ever before, forcing a higher level of measurement, monitoring and modifying of strategic direction as well. Globalizations' role in creating more strategic planning opportunities has become well-known through the many examples by Friedman (2005) and other writers on the subject. The need for astute strategic planning is seen in the many examples there are for global growth opportunities, the development of entirely new business models based on the pervasiveness of the Internet, and the development of entirely new segments of customers. In short, strategic planning as a process will be permanently changed as a result of globalization. For strategic planning to capitalize on all these opportunities that globalization presents, there needs to be more globally-based strategic planning frameworks created to capitalize on the entire new opportunities and business models created.

As the text points out, not only is the Internet changing the way customers, suppliers, and companies interact, it is changing the way companies work internally. Of the seven current world-wide trends most affected by the Internet, which do you believe is viewed by corporations as the most threatening and/or challenging to their strategic management? Justify your answer.

The most threatening or challenging aspect of the Internet influencing and changing the internal processes within companies are the many innovations being made in the supply chain, and its implications on the ability of companies to sell existing products and create new ones. The Internet specifically makes supply chains more efficient and transparent to both other suppliers and to companies that are purchasing their needed components, raw materials, and subassemblies from suppliers globally. In effect the Internet is leveling the playing field between suppliers and buyers, requiring each to be more aligned with the needs and objectives of the other. As the Internet increases the speed at which supply chains operate, there is a corresponding increase in the need for both suppliers and buyers to share their objectives and plans with one another to stay in sync with one another.

Supply chains' implications on a company's performance are further accentuated by the supply chain from a process standpoint as well. The many processes that companies rely on for completing their internal quality assurance, production and fulfillment tasks are all dependent on having a clear idea of what is in the supply chain at any point in time. Clearly the Internet is making the speed at which the supply chain operates much more accentuated than ever before, having a major impact on companies globally.

As the CEO of a financially stable corporation, explain how you would convince your board of directors that a long-term forecast would benefit your business? How would you adjust your presentation to the board of directors, in the event that your corporations were struggling financially.

In presenting the idea of creating a long-term forecast to the board of direction of a company of which I was the CEO, I would stress the need to think long-term about market opportunities, risks, and the company's need to change to continually be able to grow. The fact that no market or its accompanying opportunities or risks stands still for long is ample reason to take a long-term perspective on the development of plans specifically aimed at creating greater long-term value. Even in times of financial stability, the need exists for being able to track and measure how to continually grow, as markets do change and customers change their buying behavior, it's critical to anticipate changes in the market and respond to them if a company is going to continually grow.

Conversely when an organization is not performing well financially the need for a long-term forecast is even more critical. The critical concern in this situation would be to turn around the sales drop and also increase the level of sales effectiveness. A long-term sales forecast in this instance would become a roadmap to increasing the level of activity and effort in specific areas of the company to hopefully get close to the long-term revenue forecast presented to the board of directors.

As CEO of a corporation, what steps would you initiate and/or expect top management to employ, in order to ensure that information about strategic environmental factors gets to the attention of strategy makers?

There are many steps that a CEO can take to create a system for measuring, monitoring ands reacting to strategic environmental factors. In defining my own as a CEO, I would start first with a series of customer listening systems that would capture the unmet needs of all customers by segment, and further look at why those needs were unmet. Looking at which socioeconomic trends were impacting my present and potential customers would be a primary concern. I would also have the strategic planning department focus on creating a single dashboard that showed only the most relevant key performance indicators that quantified the performance of strategic environmental factors. This dashboard would be available to every executive on the team, and would be required to be used in planning and strategy documents. Third, I'd work to create Voice of the Customer (VoC) programs that focused on where our customers were seeing the market changing, how they perceived the market changes impacting their businesses, and what we could do to help them with the transitions they saw ahead in their own businesses. Fourth, I would also create a specific strategic planning position that would look at strategic environmental factors and integrate them into the dashboards, prepare quarterly market assessments, and work continually on strategic plans to make sure they were aligned with market needs. In summary all of these approaches would also be balanced with the requirement that all senior managers visit at least ten customers every three months, to ensure they have an understanding of the current challenges faced. This aligns with the qualitative research of Japanese companies looking to move into the American camera market (Johansson and Nonaka, 1987).

As a member of top management, what kind of internal factors would you use to determine whether your firm should emphasize the production and sales of a large number of low-priced products or a small number of high-priced products? Justify your answer.

In evaluating whether the firm I am working for as a member of top management should pursue a low-end product strategy of producing a large number of low-end products vs.… READ MORE

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