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Submitted by: Clinton Riley
To develop a rigorous business strategy, businesses must follow a strategy development process that starts with a agreed upon understanding of its business positioning and existing strategic challenges. The next steps include defining what the future vision of the organization is and then going into the details of planning how to achieve that state. In order to understand your strategic challenges, you must begin with a complete, end-to-end understanding of your situation. Proper strategy development involves more than a focus on maximizing profitability. Strategy is about value innovation, strategy is about focus, and strategy is about speed .
Business strategy development has evolved through 5 key stages since the early 1900s. A lot of growth 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. Business strategy development started with a focus on financial planning in the 1950s, moving to sustainable 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 an ever evolving, new thought leaders, and emergence of disruptive technologies and changes. Today, the strategic development theme is on integrating strategic planning and execution with a stress on the key concepts of core competencies, strategy planning and execution, and balance scorecard analysis.
These days, there are two primary schools of thought around strategic management. Henry Mintzberg opts for an organization, bottom-ups process to drive the strategy development process that adheres to organizational configuration. In organizational configuration, the organization takes on behaviors based on adoption to business surroundings. Henry Mintberg also advocates a transformation of business practices, where management recognizes the need and has the ability to conduct complete business transformation.
Different size organizations naturally experience different challenges and thus, undertake different approaches to managing their business strategy. A SME may be more entrepreneurial in its approach to business growth and its operations are often much more lean and agile leading practices. Some companies may be in the nascent growth stages, whereas more established conglomerates are in the sustain phase. A global company may employ a more structured strategic management model, due to its greater size and scope of both business.
The strategic thinking of modern business organizations has been shaped by military strategists since 400BC when Sun Tzu wrote the Art of War. Sun Tzu hinted at indirect strategies when he said winning without fighting is the acme of skill on the battlefield. Sun Tzu wrote the Art of War, which has been adopted into a business strategy book. In Sun Tzu?s Art of War, he spoke about five fundamental factors in military strategy and each of these factors relates to a popular concept of business strategy. Sun Tzu?s thoughts about the factor of terrain, in today?s business landscape, translates to markets, industry structures, value propositions, and Porter?s Five Forces.
In the strategy development process, it is noteworthy to point out that your company should conduct rigorous market analysis. There are also several market place analysis factors, including market development, pricing changes, research and development, market place characteristics, market force structure, and current trends. Understanding what is a market analysis involves both supply analysis and demand analysis, which includes segmentation and segment analysis, understanding consumer buying behavior, and historical analysis. There are several market ecosystem-based analysis variables, including ones that are socio-demographic, economic, legal, technological, and current trends. Remember that you should evaluate what makes a market unique, such as a high degree of regulation, high industry fragmentation, and importance of CapEx. Proper market analysis example involves defining the market scope and the study scope, understanding the core industry issues, and planning for the future.
This process is oftentimes linked to creating a pricing strategy ppt for a new product or offering. Penetration pricing involves bringing a product or service below market entry price point, often lower than existing competing products available in the market. Price skimming involves introducing the new product or service at a relatively high price point. However, building a pricing strategy ppt focuses one key question initially: whether to skim the market or penetrate the market.
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