Strategy
At core of any successful entrepreneurship is the art of strategy and its intricacies.
What is strategy?
Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:
“Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholderexpectations”.
Example of strategy :
- Where is the business trying to get to in the long-term (direction)
- Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
- How can the business perform better than the competition in those markets? (advantage)?
- What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?
- What external, environmental factors affect the businesses’ ability to compete? (environment)?
- What are the values and expectations of those who have power in and around the business? (stakeholders)
Strategy at different levels
Business Unit Strategy – is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.
Operational Strategy – is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.
Strategic Analysis
This is all about the analysing the strength of businesses’ position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:
PEST Analysis – a technique for understanding the “environment” in which a business operates
Scenario Planning – a technique that builds various plausible views of possible futures for a business
Five Forces Analysis – a technique for identifying the forces which affect the level of competition in an industry
Market Segmentation – a technique which seeks to identify similarities and differences between groups of customers or users
Directional Policy Matrix – a technique which summarises the competitive strength of a businesses operations in specific markets
Competitor Analysis – a wide range of techniques and analysis that seeks to summarise a businesses’ overall competitive position
Critical Success Factor Analysis – a technique to identify those areas in which a business must outperform the competition in order to succeed
SWOT Analysis – a useful summary technique for summarising the key issues arising from an assessment of a businesses “internal” position and “external” environmental influences.
Strategic Choice
This process involves understanding the nature of stakeholder expectations (the “ground rules”), identifying strategic options, and then evaluating and selecting strategic options.
Strategy Implementation
Often the hardest part. When a strategy has been analysed and selected, the task is then to translate it into organisational action.
Bibliography
https://iidjournal.wordpress.com/2017/01/19/ce-strategy/