To create a rigorous business strategy, organizations must perform business strategy development that starts with a clear set of beliefs around its current situation and existing strategic challenges. The next steps , on a high level, include depicting what the future state vision of the organization is and then going into the details of planning how to get to that state. To properly gauge and analyze your strategic challenges, you must begin with a complete, end-to-end understanding of your situation. Strategy is about value creation, strategy is about selectivity, and strategy is about business mobility. Business strategy development has evolved through 5 key stages since the early 1900s.
Strategy development started with a focus on financial planning in the 1950s, moving to long-term business planning in the 1960s, to strategic planning in the 1970s and eventually to a focus on strategic management in the present day. Shifts in strategic mindset represent a changing landscape, new business leaders, and emergence of disruptive technologies and changes. Much of competitive strategy is also hinged on ideas in the 1970s, where the core theme was around thinking strategically to out maneuver competition and the business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix were actively used for the first time. Today, the strategic development theme is on integrating strategic planning and execution with a stress on the primary notions of core competencies, strategy planning and execution, and balance scorecard analysis.
In the strategy development process, it is always critical to conduct rigorous market analysis. There are also several market place evaluation variables, including market development, pricing changes, research and development, market place characteristics, market force structure, and current trends. Understanding what is a market analysis involves supply analysis and demand analysis, which includes segmentation and segment analysis, understanding consumer buying behavior, and trend analysis. Proper business market analysis involves defining the market and the study scope, understanding the core business issues, and planning for the future. Remember that you should evaluate what makes a market unique, such as a high degree of government regulations, high competitive fragmentation, and importance of CapEx. There are several market ecosystem-based analysis characteristics, including ones that are socio-demographic, economic, political, technological, and current trends.
An important tool used in strategic planning is scenario planning. Scenario planning is also called scenario thinking and scenario planning analysis. Oftentimes, the scenario planning process is performed in a workshop environment, where key stakeholders, c-level members, subject matter experts, and third partyadvisors, are gathered in a 3-4 day off-site location to decide on various future state scenarios. An important task in the scenario planning framework is defining the primary axes of uncertainty within the context of a scenario map. Scenario planning is used to help businesses plan for and make flexible future estate corporate plans.
The strategic thinking of modern business organizations has been built upon a platform of militant strategists since the beginning of organized warfare. Sun Tzu spoke about indirect strategies when Sun Tzu said winning without fighting is the acme of skill on the warfield. Sun Tzu wrote the Art of War, which has been adopted into a business strategy book. In Sun Tzus Art of War, he spoke about several core factors in military strategy and each of these factors can be directly translated to terms of business strategy. Sun Tzus thoughts about the factor of terrain, if we were to take that into the context of companies competing today, translates to markets, industry structures, market positions, and Porters Five Forces.
In current thinking, there are two primary schools of thought around strategic management. Mintzberg also advocates a transformation of business practices, where management recognizes the need and has the ability to manage organizational business optimization. Joseph Bower places the emphasis of the strategic planning and financial budgeting process is in the focus of strategy development. Strategic intent is defined as the externally observed and communicated corporate strategy. Bowers school of thought is called the Resource Allocation Process RAP business framework. Capital market context is also looked at, which includes demands and influences of capital providers, like investment firms. Resource allocation based strategy planning and budgeting is a bottoms up driven way to finding and picking of business opportunities. In the RAP business framework, when market context is discussed, we are analyzing the demands of the primary customer base,and technological development. Henry Mintzberg proposes for an organization, bottom-ups strategy to drive the strategy development process that hinges upon organizational configuration. In organizational configuration, the organization takes on behaviors based on adaptation to contexts. Organizational context is made up of organizational governance and the org structure, definition of performance metrics and rewards, and managements core ideas and strategic frames.
The online destination LearnPPT is an invaluable resource for understanding and refining business strategy knowledge. The site houses a substantial collection of PowerPoint presentations breaking down various business strategy frameworks and concepts. Within its ever growing collection are the likes of corporate strategy presentations, market analysis frameworks, quantitative financial spreadsheets, and business presentation diagrams such as Crawl Walk Run templates. Their corporate strategy and presentation materials have been used widely across the world in over 40 countries in global Fortune 500 businesses. LearnPPT states that all products were developed by strategy and management consultants from reputable consulting firms, like McKinsey and LEK. You can find numerous PowerPoints covering secondary business units, such as governance, supply chain management, and workshop planning.
Strategy Development Strategies
Source: http://blasite.com/2011/10/at-kearney-basics-strategy-development-knowing-the-market-drivers/
No comments:
Post a Comment