What is the difference between business policy and business strategy?
There are plenty of definitions in management literature that define business policy and strategy.
Let me try and explain the differences using real-life examples.
TATA group:
I worked in this group’s leading technology services company for ten years, and I quickly learned that ethics was a cornerstone policy. As a global business head of consulting, my targets for securing business and bringing in revenues were governed by a business plan prepared by me at the beginning of the year. The unwritten rule was a red line that you cannot cross regarding ethics.
Customer centricity was another business policy that permeated the organization. You were required to do everything to achieve customer satisfaction. Most of the projects that we executed in India were loss-making. We kept delivering them, investing more resources and technology to satisfy the customer. We compensated our losses from profitable projects from the US, UK, and other parts of the world.
Let me now move to business strategy –
At the heart of a great business strategy lies the ability to secure a competitive advantage over your competitors and undertake such steps that will increase the customers’ willingness to pay for your products and services.
It is secured by identifying the right product mix, improving business processes, increasing efficiency, acquiring talent suitable for the task at hand, determining the appropriate business model, etc.
My credentials:
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