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Strategies, Policies and Planning Premises

This document discusses strategies, policies, and planning premises. It defines strategies and policies, and outlines the differences between them. The strategic planning process is described, including tools like the TOWS matrix and portfolio matrix. Major types of strategies are identified. Effective implementation of strategies requires communication, action plans, reviews, and contingency planning. Premising and forecasting involve making assumptions about the future environment. Methods for developing sales forecasts are also discussed.

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Vicky Narayan
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4K views22 pages

Strategies, Policies and Planning Premises

This document discusses strategies, policies, and planning premises. It defines strategies and policies, and outlines the differences between them. The strategic planning process is described, including tools like the TOWS matrix and portfolio matrix. Major types of strategies are identified. Effective implementation of strategies requires communication, action plans, reviews, and contingency planning. Premising and forecasting involve making assumptions about the future environment. Methods for developing sales forecasts are also discussed.

Uploaded by

Vicky Narayan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Strategies, Policies and Planning Premises

Learning Objectives
The nature and purpose of strategies and policies
The strategic planning process which identifies the aspect of
formulating a strategy
Tool for systematically integrating internal and external
factors (“TOWS Matrix”)
Tool for allocating resources (“Portfolio Matrix”)
Major kinds of strategies and policies
Identify Porter’s generic strengths
Make recommendation for effective implementation of
strategies
The nature and types of premises and forecasts
Make premising effective
Introduction
Today most business enterprises engage in strategic planning, although
the degree of sophistication and formality vary considerably.
Conceptual strategic planning is deceptively simple: Analyze the
current and future situation, determine the direction of the firm and
develop the means of achieving the mission. In reality, this is an
extremely complex process which demands a systematic approach
for identifying and analyzing the factors extensively for the
organization and matching them with the firm’s capabilities.
Strategy
Strategy, a word of military origin,
refers to a plan of action designed to
achieve a particular goal.
First attested in English 1810, the
term strategy”, derived from the
Greek word strategos, means to
achieve the end points.
Policy

A policy is typically described as a


principle or rule to guide decisions and
achieve rational outcome(s).
It guides us in decision making.
Differences between
Policies and Strategies
Policies Strategies
1. A policy is typically described A plan, or method of approach developed by
as a principle or rule to guide an individual, group, or organization, in an
decisions and achieve rational effort to successfully achieve an overall goal
outcome(s). or objective

2. The essence of policy is It concerns the direction in which human and


discretion material resources will be applied in order to
increase the chance of achieving the selected
objectives
3. It will guide our thinking in It implies that the that the enterprise has
decision making – if a decision is made to commit resources in a given
to be made. direction.
Few Similarities

Strategies and policies are closely related.


The key function is to unify and form the framework for the plans
Both are the basis of the operational plans
Both affects the areas of managing

But standing alone, can they ensure that an organization will


reach its goal?

The more carefully developed and clearly understood strategies


and policies are, the more consistent and effective the ensuing
plans will be .
Strategic Planning Process
TOWS Matrix
This is a conceptual framework for a systematic
analysis that facilitates matching external threats(T) and
opportunities(O) with the internal weakness (W)and
strengths(S) of organization.
It is a tool which helps in analyzing the situation.
TOWS MATRIX: CONTD
There are four alternative strategies
based on the analysis of external
environment( T & O) and internal
environment( W & S):

 WT(W and T decreased)


 WO(W is decreased and O is increased)
 ST(S is maximized and T is minimized)
 SO(aim of enterprise is move to this part of matrix)
The Tows Matrix For
Strategy Formulation
Internal Internal Strengths (S) Internal weaknesses e.g.
Factors e.g. strengths in mgmt, Weaknesses in areas
operations, finance, showing areas shown in
marketing, engineering the box of strengths
External
Factors
External Opportunities(O): SO Strategy: Maxi – Maxi WO Strategy: Maxi – Maxi
e.g.. current and economic Potentially the most e.g. development strategies
future conditions, political successful strategy, utilizing to overcome weaknesses in
and social changes, new the organization’s strengths order to take advantage of
products, services and to take advantage of opportunities.
technology opportunities

External Threats(T): e.g. lack ST Strategy: Maxi – Mini WT Strategy: Maxi – Mini
of energy, competition and e.g. use of strengths to cope e.g.. retrenchment,
areas similar to those shown with threats or to avoid liquidation or joint ventures.
in the opportunities box threats
above
Time Dimension and the
TOWS Matrix
So far, the TOWS Matrix is pertained to analysis of
particular point of time. External and internal factors are
dynamic. Hence, these factors change over while others
change very little.
Because of the dynamics in the environment, TOWS
Matrix is designed at different points of time
Thus, one may start with past, continue with present
and focus on different time periods of future.
The Portfolio Matrix
Developed by Boston consultancy group
Shows the link between growth rate of business and
relative competitive position

High Stars Question marks

Cash Cows Dogs


Low

Strong Weak

Relative Comptetion Position


Major Kinds of Strategies
and Policies
Growth
Finance
Organization
Personnel
Public relations
Products or services
Marketing
Generic Competitive
Strategies by Porter
It suits all levels and different kind of organizations
Overall cost leadership strategy
Differentiation strategy
Focused strategy
Effective Implementation of
Strategies
Strategic planning may fail because
Managers are inadequately prepared
Information is insufficient for planning
Goals are too vague
Business units are not clearly identified
Reviews are not done effectively
Successful Implementation
of Strategies
Communication of strategies to all key decision making
managers
Developing and communicating planning premises
Action plans contributing to and reflecting major objectives
and strategies
Regular review of strategy
Development of contingency strategies and programs
Making organization structure fit planning needs
Continuing emphasis on planning and implementing
strategy
Creating a company climate that forces planning
Premising and forecasting
Planning premises are defined as anticipate the
environment which plans are expected to operate
They also includes assumptions or forecasts of future
known conditions that will effect the operation plans
Forecasting with accuracy is more complicated one
Values and areas of forecast
Areas include economic, social, political, legal and
technological
Forecasting with the Delphi
Technique
Developed by Olaf Helmer and his colleagues at
RAND cooperation
Convergence of opinion begins to evolve then the
results are acceptable forecast

The sales forecast:

Why it is important?
Methods of sales forecast
Jury of executive opinion
Sales force composite
User’s expectation
Statistical methods
Deductive methods
Combination of methods
Effective Premising:
Selection of the best premise
Development of alternating premises for
contingency planning
Assurance that premises are consistent
Communication of the premises
THANK YOU

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