Strategy Management
Best Practices
Business Strategy
A business strategy is formulated by selecting the target
audience of the product and assembling the marketing mix. A firm
can assemble marketing mix elements in many different ways so
that the relative weight of the different elements will be
different in the different combinations. Because of this
reality, business firms are employing an abundance of strategies
and strategy stances. It is a relentless race to stay ahead of
competition.
Basically, however, there are only two broad routes available
for forging business strategies. They are the price route and
the differentiation route. In other words, any strategy has to
be ultimately either a price-based strategy or a
differentiation-based strategy.
Companies taking the price route compete on the strength of
their pricing and the price cushions they enjoy. Normally, those
who resort to the price route and compete on price will enjoy
substantial cost advantages, giving them flexibility in pricing
and marketing. The differentiation route, on the other hand,
revolves around elements other than price. The product with its
innumerable features is one major source of differentiation. In
fact, any of the ever-so-many activities performed by the
business unit can constitute the nucleus for differentiation.
In other words, differentiation allows the company the
freedom and flexibility to fight on the non-price front.
Differentiation, therefore, is a crucial option for a firm in
its search for a rewarding strategy. A good majority of business
battles are in fact fought with a differentiation-based strategy
rather than a price-based strategy.
As already mentioned, a business unit that opts for the price
route in its competitive battle will enjoy certain flexibilities
in the matter of pricing of its products, and use price as the
main competitive lever. It will price its products to suit
varying competitive demands. It will enjoy certain inherent cost
advantages, which permit it to resort to a price-based fight.
Strategy Games
In the marketplace, different firms take different strategy
stances. This is but natural. As long as their situational
designs and consequently their specific requirements of strategy
differ from each other, they will evidently follow different
strategy stances. One firm may find it appropriate to have a
direct confrontation with the market leader; another may find it
appropriate to keep aloof for some time from the heat of
competition; the third may find it relevant to chalk out a
strategy of sheer survival. It is essential to understand that
there is no universally valid strategy stance. It is so because
the various firms do not share the same situational design.
Companies draw relevant elements and forge unique strategies
to suit their unique situational design and relative position in
the industry. Broadly, these strategy stances can be classified
under three heads- offensive/ confrontation strategy, defensive
strategy and niche strategy.
Offensive strategy, also known as confrontation strategy, is
as the name indicates a strategy of aggression/confrontation. A
firm that is not presently the leader, but aspires to leadership
position in the industry, usually employs an offensive strategy.
The crux is that the firm adopting an offensive strategy
automatically assumes the position of the challenger; the
leader, mostly, is its target of attack.
A defensive strategy is usually employed by the leader who
has the compulsion to defend his position against the
confrontation of powerful existing competitors or strong new
entrants trying to dislodge the leader from his topmost
position. The leader's concern is, how best can I defend my
position? The leader cannot assume that its position in the
industry is safe and its job easy. It has to maintain constant
vigilance and defend its position against the attack of the
challengers, because in any industry challengers keep appearing.
A firm practicing the niche strategy neither confronts others
nor defends itself. It cultivates a small market segment for
itself with unique products/services supported by a unique
marketing mix. These segments will be too small to attract big
competitors. Normally, smaller firms with distinctive
capabilities adopt a niche strategy.
Strategic Planning
Strategic Planning entails the making of schemes to be
adhered to by an entire organization. This pertains to the
entire organization's achievement and progress over a certain
period of time in the future. It also takes into account the way
industry conditions change with the times - in areas such as
technology and communications.
The particular nature of the organization, as brought out by
its leadership, its culture, complexities in its environment,
its size and other specific aspects prevalent there, determine
its Strategic Planning mode. Thus, there arise a number of
models, approaches and perspectives of Strategic Planning. These
may be based on goals or issues or other criteria.
An organization's planners may well know the components of a
Strategic Plan. Still, in order to clarify and elucidate the
organization's plans and verify that the individual plans of the
key persons concerned comply with the common plan, the Strategic
Planning process is well worth considering. Strategic Planning
serves many purposes:
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It helps cultivate a feeling of ownership of the plan
among the participants in planning.
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It helps bring focus on the key priorities of the
organization, and thereby ensures the most optimum effective
use of the organization's available resources.
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It sets and establishes realistic and achievable goals
for a period of time in keeping with the organization's
capacity.
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It forwards such goals and objectives defined to every
constituent of the organization. Following these, progress
can be measured from time to time.
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It redefines the organization's purpose.
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It establishes a mechanism for informing about changes
in goals and objectives, when made.
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Strategy Management
Best Practices Training Subjects:
Value Creation Models & Methods A-Z , What is
Value Based Management? What is Performance Management? Why Value Based
Management? Strategy, global, planning, Balanced Scorecard Kaplan Norton,
Internet, eCommerce, 80/20, Boston matrix, quick-wins, tactics, sustainable
competitive advantage, Merger and Acquisition (M&A), best practices,
implementation, analysis, 3C's model Ohmae, 7 Ps Booms Bitner, 7-S Framework
McKinsey, ADL Matrix Arthur D. Little, Ansoff product/market grid,
Acquisition Integration Approaches Haspeslagh Jemison, Boston Consulting
Group, BCG Matrix, Blue Ocean Strategy Kim, Business Assessment Array,
Competitive Advantage framework, Core Competence Hamel Prahalad,
Cost-benefits analysis, Extended Marketing Mix 7P's, Industry Life Cycle,
Kaizen philosophy, Learning Organization, Managing for Value MfV Insead,
Outsourcing, SWOT analysis, Strategic Alignment Venkatraman, Strategic
Intent Hamel Prahalad, Strategic Stakeholder Management, Strategic Triangle
Ohmae, Business Intelligence. Check:
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