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.

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