Business policy and strategy Cost leadership focuses on creating standardized goods for price-sensitive customers at extremely low unit costs. Low cost and greatest value strategies are two more categories of cost leadership approach. A wide variety of clients may purchase goods or services from the low cost at the lowest price on the market. The best value approach caters to a wide spectrum of clients by providing goods and services at the most competitive prices on the market. Offering clients a variety of goods or services at a cheaper cost than competing goods with the same feature is the goal of the best value approach. Both categories are market-wide strategies. High efficiency, low overhead, few perks, intolerance of waste, thorough screening of budget requests, broad control, rewards linked to cost containment, and widespread employee involvement in cost control initiatives are signs that a cost leadership strategy is working when it permeates the entire company. Cost leadership strategy can be especially effective under the following conditions: 1. When price competition among rival sellers is especially vigorous. 2. When the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers. 3. When there are few ways to achieve product differentiation that have value to buyers. 4. When buyers incur low costs in switching their purchases from one seller to another. 5. When buyers are large and have significant power to bargain down prices. It is believed by writers in the field that development in Business policy practice followed a peculiar pattern. The peculiar pattern was occasioned by dynamic environmental condition necessitated by demands. These changes are grouped into four phase. In Concerts, the Board of Directors, not a specific director, is often in charge of formulating policy. The Board may provide a basic definition of the policies before communicating them to the top management. The business owner also has the legal right to choose how they want the enterprise to be run. As a result, they can create policies that the board can embrace. The annual general meeting is a possible method. However, the major responsibility for policy formulation rest with the Board of Directors. It's possible that middle management isn't involved in making policies. If so, such regulations will be restricted to spheres of authority. First line managers and supervisors have the authority to create rules that are primarily focused on attaining predetermined goals. Here, policy is intended to accomplish a certain objective.
Generally, policies flow from the top to the bottom. It is a top down approach. Policies may be formulated in anticipation of solving specific problems that are arising or are likely to arise. Before you can comprehend and manage a business, you must be aware of the big picture. 1. The vision of where a company is going serves as the beginning point. Entrepreneurship and the concept of vision go hand in hand. To envision an opportunity and begin to make it happen. Vision separates naturally born leaders from those who are created. The most crucial aspects of leadership are visionary skills. Most of the time, it distinguishes between success and failure, but it is hard to define and analyze. Another reason why McKinney puts vision as the nerve center of the 7 life of the organization is because most people grapple in darkness and hardly appreciating how their role contribute towards achievement of the goal of the organization. Vision is the conception idea whereas the goal is the end the direction you are going toward.