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Strategic Management
strategies.
Coordination and congruence is needed not just among
strategies at these three levels but also among strategies taking place at the same level.
Corporate-Level Strategies
Business-Level Strategies
Functional-Level Strategies
Vertical Fit
Horizontal Fit
guidelines set at higher levels. They are made to select a course of action. Functional plans tell the functional manager what has to be done.
Policies are required to act as guidelines to action. Functional
allocation decisions.
organization There is a basis available for controlling activities in the different functional areas of business. The time spent by functional managers in decision making is reduced as plans lay down clearly what is to be done and policies provide the discretionary framework within which decisions need to be taken. Similar situations occurring in different functional areas are handled in a consistent manner by the functional managers. Coordination across the different functions takes place where necessary.
subjective factors.
The major factors regarding which plans & policies have to be made are: Capital structure Procurement of capital Working capital borrowings Reserves and surplus Relationship with lenders Banks Financial institutions
1.2 USAGE OF FUNDS Important factors regarding which plans and policies sre to be made are Investment or asset mix decisions Capital investments Fixed assets acquisition Current asset Loan and Advances Dividend decisions Relationship with shareholders
1.3 MANAGEMENT OF FUNDS It deals with decisions related to systematic aspects of financial management. Major factors are: system of finance Accounting and budgeting Management control system Cash Credit Risk management Cost control & reduction Tax planning
Product
Pricing
Place
Promotion
2.1 PRODUCT Product denotes the goods and services that an organisation offers to its target markets. Plans and policies related to the products and markets need to be formulated and implemented on the basis of characteristics such as Quality Features Choice of Models Brand Name Packaging
2.2 PRICING
Price denotes the money that customers pay in exchange for goods and services. It is important to the seller because it represent the returns on efforts. To a buyer, price is the value that is assigned to the satisfaction of needs and wants. Several price characteristics effects the pricing plan and policies such as Discount mode of payment Allowances Payment period Credit term
2.3 PLACE Place(or distribution) is the process by which good or services are made available to the customers. Distribution plans and policies address themselves to issues such as the channels to be used, Transportation , Logistics and inventory storage management and coverage of markets .
The success of market-orientated strategies, especially in a competitive environment, rest on the efficiency and effectiveness of distribution system.
2.4 PROMOTION
Promotion deals with marketing communication intended to convey the company and product or service image to prospective buyers. The promotional mix consists of four activities: Advertising Personal selling Sales promotion Publicity
system.
It describes what you produce and how you produce it. But planning is easy, implementation is the hard part. Operations/production
attained.
The key to more profitable businesses is managing many costs
needs to adequately communicate that the business has a sound production management strategy.
The operations plan should document the critical operational
should discuss: The products produced The production system Quantity produced Production schedule
Operations should discuss: Resources available and needed Permits and regulations Risk management plan Environmental issues Quality control systems
Operations Plans & Policies consists of 3 major factors : 3.1 Production System 3.2 Operations Planning & Control 3.2 Research & Development
Communication
Manpower planning
FINANCIAL PLANS AND POLICIES INFORMATION MANAGENMENT PLANS AND POLICIES MARKETING PLANS AND POLICIES
Since all activities are performed to achieve the overall objectives of an organization, so they need to be integrated with following considerations:
a) Need for internal consistency b) Relevance to the department of organizational capability c) Making trade-off decisions d) Determination of intensity of linkages e) Timing of implementation of plans and policies
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