Monday, 1 April 2013

Introduction to Business Strategy

The strategy element of the business plan aims to create or re-create the potential for your business. It commits the company in the medium and long term.

The first activity that comes to mind is the strategic approach. This is to achieve a strategic diagnosis of the situation of the company. We commonly speak of opportunity-threat-weakness and strengths, known as matrix. This will determine the objectives "strategic" that you want to assign to the company. Management committees have at their disposal a wide range of tools. Most strategists are followers of game theory ... It is thus possible to establish the foundations of corporate governance.

There are some great options for Business Strategy, what are the strategies of differentiation, cost leadership, or focus on niches. Beyond these theoretical models, many options available to policymakers: Blue Ocean Strategy, rupture, etc.. It will then be necessary to identify its business model to ensure permanently projected growth.

To expedite the movement and reach a critical size, the external growth operations can be carried out (fusion..). It should reflect well on its core competencies to select appropriate targets. For a less strong commitment, strategic alliances can be concluded. It is then appropriate to consider diversifying its activities. Frequently preferred axis is vertical integration in the industry.

In this article we will take a brief history of the business strategy and describe the three types of relationships between companies commonly described today confrontation, cooperation and avoidance.

We will build on the very good general introduction to the manual Strategic Management Competition.

Strategic management of the company has developed and structured from the 60s. Starting from the question of the right strategy to be pursued in a competitive context, early theorists (Learned et al., 1965 or Ansoff, 1965) state that rule learned today in all business schools in the world: the company be competitive must develop distinctive competencies to gain competitive advantage.

For nearly 20 years, this concept remains central in all the literature of strategic management of the company.
For illustration, the Boston Consulting Group developed a matrix became famous, eponymous named so the BCG matrix, which focuses on the benefit by the cost of production, due to the effects of experience (BCG, 1981). Michael Porter also built a model eponymous too, which gives the company the opportunity to gain a competitive advantage through differentiation (Porter, 1982).

In the next post I will describe the three types of relationships between companies commonly described today confrontation, cooperation and avoidance.

Development of an Effective Business Strategy

A marketing strategy should not improvise on the opinions of leaders, but the value of the company and its benefits concurrence. But how to achieve an effective Business Strategy?

I do not ascend what strategies can be planned or designed here but how do we build a process leading to a strategic marketing plan.

First, we must analyze the internal strengths of the company. Products, the U.S., profit margins, production capacity, service, distribution network, etc.. It is important to know the exact value of EVERY elements and not rely solely on the general impression.

To do this, you need a good system of internal marketing information or do business with contractors who specialize in this field. In addition, the S.I.M. must provide all information about the 5 P to ascertain empirically the strengths and weaknesses of the company. By 5 percent, we talk about price, product, place, promotion and sales staff and service.

Once we know, we are ready to look at the external environments. We are talking about micro and macro environment. It is not important to know the difference between the two, but to know the relevance to this analysis exercise. Macroenvironment level, we are talking about the political, social, economic, ecological, cultural, technological, and demographic. For the micro environment, we must look at everything that is important outside the company, but that influence directly. Competition, customers and markets as such.

So now that we know the company is entirely based on facts and reality and our knowledge of the external environment, we can better validate the opportunities as well as external threats. Some strategists are masters in the art of the analysis of the most subtle and difficult at the same time. The analysis should go as far as to validate the impact of these business opportunities and market threats.

Now this is where the fun begins. Must develop the strategy development meeting our mission, our goals and our strategic position ideal. Must have actual knowledge of consumer behavior to validate an effective strategy in terms of objectives, execution and timing.
We must make a different but statégie inhérante the positioning strategy for each element of the marketing mix of the company. There are several options, and each element must demonstrate a deep reflection. Several analyzes are needed, particularly in comparative evaluations more commonly known as "benchmarking".
Although comparative evaluations are necessary and important, they should not show you a model to follow but a way to distinguish its you from your competitors.

Your strategies must be structured and effective. Do not believe those who will give you the idea of ​​the century and the dollars will flow with a flick of the wand. Strategies must be deployed on multiple levels and have been testing and previous research. It is much easier and cheaper to tests and focus groups that launch energy and money before you even know how our target market will react.