Group- 1

Aanchal Arora
Jayita Das
Priya Agarwal
Priya Gupta
Ratna Kakkad
Razi Ahmed
 What is Business Policy
• The guiding procedure, philosophy or course of
action for an enterprise or company organized for
commercial purposes. It is formulated by the
organization to define the limits within which
decisions must be made. Business policy also deals
with acquisition of resources with which
organizational goals can be achieved. Business policy
is the study of the roles and responsibilities of top
level management, the significant issues affecting
organizational success and the decisions affecting
organization in long-run.
Features of Business Policy
Difference between Policy and Strategy
Business Policy
Policy is a blueprint of the organizational
activities which are repetitive/routine in
nature
Policy formulation is responsibility of top
level management.
Policy deals with routine/daily activities
essential for effective and efficient running
of an organization.
A policy is what is, or what is not done
Policy is concerned with both thought and
action
Strategy
While strategy is concerned with those
organizational decisions which have not
been dealt/faced before in same form.
While strategy formulation is basically done
by middle level management.
While strategy deals with strategic
decisions
While a strategy is the methodology used
to achieve a target as prescribed by a policy
While strategy is concerned mostly with
action.
Business Policy is also Involved with...
A. Strategy formulation as how (Short, long
term) to achieve laid-out plans

B. Planned process for implementation, based

on clearly defined objectives and known
present capabilities
IMPORTANCE OF EXECUTION

“The important decisions, the

decisions that really matter, are
strategic . . . [But] more
important and more difficult is to
make effective the course of
action decided upon.”
– Peter Drucker
M/s XYZ
 About the Company…
• British multinational firm operating in several countries

• They were international experts in the fields of both rigid and

flexible packaging

• Yearly turnover was approx. Rs 140 crores

• Customers – large oil companies , tooth paste manufacturing

companies , large and medium shoe polish manufacturing
companies
 Strength

• Monopolistic Market Situation

• Best R&D facility among competitors
• Excellent quality standards
• Adequate Resources
• Highly qualified Employees (IIT Engineers and IIM
MBAs)
• Technically qualified Managers
• Superb design and in house printing facility
• Good reputation in market
 Weakness

• Improper utilization of resource

• No after sales service
• Lack of market knowledge (hard sales/push sales)
• Engineers preferred than MBA’s
• No proper goal or objectives defined
• Improper HR policy
• Resistance to change
• Not used to competition of any kind
 Opportunity

• No close substitutes
• Best pool of Engineers & MBA’s which could be utilized
• Quality & Brand name of MBIL
• Large market coverage
• Required availability of machinery and manpower
• Market for pilfer proof tin container
• Market for Sterilized vacuum tin container
 Threat

• Increasing competition from smaller firms (Zenith & Poysha)

• Losing market hold & trust (quality across 7 factories)

• Substituting the established product with newer ones not an

easy task

• Rapid change in technology

• Government regulations
 Symptoms

• High rate of attrition

• Falling market share
• Low employee morale
• MBIL was losing employee trust
• Lack of proper management decisions
• Myopic View
• Lack of accuracy in decision making
 OBJECTIVES

• Achieve target in stipulated time

• Ensure employee satisfaction & utilization of human expertise

• Ensure competitive n cooperative environment

• Maximize profitability, market share n company goodwill via

available n existing capacity base

• Exploring new markets & areas of doing business

Policy change at HR Level
Ultimate solution
 About ITC…
• Established on August 24, 1910 as Imperial Tobacco Company of India
Limited

• Started with production and marketing of cigarettes and other tobacco leaf
products

• An international organization

• Part of a unique trans-national firm

• Head office located at U.K. with operations in different parts of the world

• Its Board of Directors were educated, experienced and pro-active.

 STRENGTH
• Financials (2007)
o Sales - $2.98 billion
o profits worth $0.64 billion
o assets worth $3.57
o market value around $19.01 billion.

• Awards and recognition

• Diversified conglomerate
• Competitive strength from the inter linkages
• Global player
• International back-up
• Distribution network
•
 WEAKNESS

• ITC have to pay more than Rs.817 crores for their inability
(Management failure) to control in India
• No Control over small scale retailers
• When demand was higher than supply- ITC Limited fought its
legal battles and lost.
• Poor governance
• Small scale retailers could not be controlled by ITC
• Dependence on tobacco revenue
 OPPORTUNITIES

• India was importing, from various countries,

Rs.3,000 crore worth of edible oil per year due to
excessive demand, which was much more than then
domestic production-supply.

• Providing end to it solutions

 THREATS

• Domestic and international competition

• Increasing tax on cigarettes.

POLICY ADOPTED
CASE OF ABC LTD (INDIA)
 About ABC Ltd (India)…

• A well known multinational company, established in India for

a number of decades
• The sales turnover was approximately Rs 140 crores
• Factories covering all the four regions
• Market of just 1 lakh three piece cans per year
• 85-90% of the market preferred sleek and elegant aluminium
cans (two piece)
• Small end usage Market with inferior quality products in ADS
• The machine (worth Rs 25 lakh in end ‘60s) was
lying practically idle
• The various components of the Valve were
manufactured at various factories and integrated at
the Worli Unit
• Future business opportunities clashed with the
existing business plans and programmes!!
• Capacity to produce 4ooo containers per
shift(assuming there were two shifts a day then each
month there was a capability to produce 240000
containers) enough to satisfy the demand
• Containers for asthma sprays where demand was fairly
large could be exploited
• Only competitor being Bharat Metal Box Limited it
was a win-win situation
• Traditional approach needs to be morphed
• Myopic view would cause problems if not changed
 Mc Kinsey’s nine-box matrix(This matrix reflects Peter Drucker’s
guidance that a central principle of managing effectively is to pursue
your most attractive opportunities with your greatest strengths)
Action plan in the light of BCG matrix
Thank You…