Textbook Notes (367,788)
Canada (161,401)
Management (825)
MGM101H5 (373)
Chapter 7

Chapter 7- Developing a Business Strategy.docx

6 Pages
146 Views
Unlock Document

Department
Management
Course
MGM101H5
Professor
Dave Swanston
Semester
Fall

Description
October 25 , 2013 Chapter 7- Developing a Business Strategy The Concept of Business Strategy Strategy Made Simple The long term success of an organization is based on two fundamental principles: 1. Ability to create a strategic direction and market position (strategic plan) 2. Ability to execute the core tactical initiatives within the plan Core Elements of Assessing Business Strategy Development of a business strategy means making decisions and determining direction in 6 key areas: 1. Purpose  Mission- the organization’s fundamental purpose/reason for existence; mission statement identifies the company’s broad goals  Example: Walmart’s mission state is “helping people save money so they can live better”  Vision- A forward thinking statement that defines what a company wants to become and where it is going  Example: Walmart’s vision is to become the worldwide leader in retailing 2. Markets  Specific markets/market segments the business sees itself competing in  Markets that represent opportunities for future growth and enhanced profitability will receive greater managerial attention and resource support  Harvesting- Strategy that reflects a reduced commitment to a particular market given its perceived weak future growth or profitability potential 3. Products and Services  Review of current and potential new products/services  Products/services can become obsolete due to technological innovation, changes in consumer needs/tastes, or new direct substitutes for existing products/services  Determine which products/services are to remain part of a business’s portfolio, as well as which are to receive additional R&D support, and which new ones are to be added 4. Resources  Allocation of business’s recourses in support of its strategic decisions  Make decisions on where to allocate limited resources and whether to acquire required expertise for strategic planning process 5. Business system configuration  Modifying infrastructure and systems to ensure success of the plan  Examples: making changes to organization’s distribution outlets, warehousing/product delivery, plants and facilities, manufacturing/assembly processes, etc 6. Responsibility and accountability  Identifying the key objectives to be achieved and who is responsible for them  To meet objectives use SMART (Specific, measurable, actionable, realistic, and time sensitive) goals  For businesses, a strategic plan is the road 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 October 25 , 2013 The Strategic Planning Process Strategic Model- Goal is to align these objectives and reduce strategic tensions:  What do we need to do? External environment and opportunities  What can we do? Internal competencies; what are we good  What do we want to do? What senior managers and owners want to do in terms of strategic objectives; Conflict with this decision with what market wants them to do Internal-External Analysis  I/E Analysis is all about assessing business risk and change in 4 key areas: 1. Macro-economic: Use PESTEL Analysis 2. Industry: Use porter’s five forces 3. Competitor: Use SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis 4. Company: Use SWOT and 3C analysis  External Analysis- Focuses on understanding what is influencing markets today and what will influence them going forward; it is an assessment of the magnitude of change in a market arena and associated shifts in business risk  Internal Analysis focuses on company competencies, resources, capacity and capabilities and should include a full internal audit  Represents a form of enterprise risk management  Businesses need to anticipate and react to new initiatives and changes in strategy and market positioning by their competitors  Customer Analysis focuses on identifying what shifts have taken place in the customer base in terms of attitudes, values, and needs October 25 , 2013 Competitive Advantage Identification  A key outcome of the I/E analysis is identifying the competitive advantages an organization has compared to its competitors  Competitive advantages are either:  Strategic- “First mover” actions in a marketplace; the ability to see how your organization can change the rules of the game in the market  Operational- Being more efficient and effective than competitors in transformation and marketing processes (such as superior quality of customer support/response)  Four major areas where companies can seek to establish competitive advantages: October 25 , 2013 Strategy Development  The next step after completing the I/E analysis and identifying the organization’s competitive advantages is to make decisions as to which opportunities to pursue and how resources will be allocated in support of these market opport
More Less

Related notes for MGM101H5

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit