Developing a Business Strategy
The Concept of Business Strategy:
For an organization to be successful over the long term, managers need to have a
game plan as to where and how to compete in the markets in which they intend to
The long term success of an organization, its ability to evolve and grow, is predicted
on two fundamental principles.
The ability to define and create a strategic direction and market position for
the organization (strategic plan)
The ability to execute the core tactical initiatives within the plan in a manner
that ensures the organization’s success
Strategy can be summarized by the answers to two questions
Where do we want to play?
How do we plan to win?
By answering these two questions we develop the seeds for what is called our
intended or deliberate strategy. Core Elements for Assessing Business Strategy:
1. Purpose- Refers to the mission of the organization and the vision its
managers or owners have for the business.
Mission- Organizations purpose or reason for existence
Mission statements- usually identify the broad goals around
which a company was formed. They also can reflect on how an
organization will get to where it wants to go.
o Ex. Walmart’s mission is “helping people save money so
they can live better”.
o Mission statements when combines with ethics policies
and statements of behaviour or values, guide the overall
direction and activities of a business.
A vision statement is a forward-thinking statement that
defines what a company wants to become and where it is
o Ex. Walmart’s vision is to become the worldwide leader
2. Markets- refers to the specific markets or market segments the business
sees itself competing in. Markets should be assessed in terms of their current
and future profitability and growth potential.
Harvesting- is a strategy that reflects a reduced commitment to a
particular market given its perceived weak future growth or
3. Products and services- refers to a review of the current products and
services offered by a business, as well as potential new products/services
that are to be added to the products portfolio. Over time, products and their
related services can become obsolete or no longer desired by the
organization’s customers. This can be result of
Technological innovation Changes in consumer needs and tastes
New direct substitutes for existing products
Services being offered by competitors
4. Resources- refers to the allocation of a business’s resources in support of its
strategic decisions. Businesses, like all of us, have only so many resources.
There are capacity limitations as to the amount of products businesses can
produce, the amount of money they can commit to projects, and the variety
of tasks their workforce can handle at any given time.
5. Business System Configuration- refers to modifying the organization’s
infrastructure and the way it does business to ensure the success of the plan.
This could mean making changes to the organization’s distribution outlets,
warehousing or product delivery, plants and facilities, manufacturing or
assembly processes, marketing campaign, etc.
6. Responsibility and Accountability- refers to identifying who within the
business will be responsible for each aspect of the strategic plan.
For businesses, a strategic plan is the road map to success. It defines a specific route
the business intends to undertake, provides benchmarks to measure its success
along the way, and identifies where and how the organization will interact with its
customers as it seeks to meet its overall mission and vision.
The General steps associated with the development of a strategic
Revisit Our Purpose: “Who are we? Where do we want to go?”
Undertake an Internal/External (I/E) Analysis to Understand Our
o I/E Analysis is all about assessing business risk and change in 4
Macro-economic: USE Pestel Analysis
Industry: Use Porter’s five forces
Competitor: Use SWOT (strengths, Weaknesses,
Opportunities, Threats) Analysis
Company: Use SWOT and 3C Analyses Assess our View of the World: Opportunities & Threats:
Choose a Direction
Implement Our strategy
What do we need to do?
What can we do?
What do we want to do?
Goal is to align these objectives and reduce strategic tensions Strategic Planning Process Model
Competitive Advantage Identification:
A key outcome of the I/E analysis is identifying the competitive
advantages an organization has compared to its competitors
The real measure of a competitive advantage is why a customer
chooses to purchase your products over your competi