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Lesson 1

Business Strategy

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Module Overview

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Strategy Formulation

Strategic Planning

Strategy Evaluation and Selection

Strategy Implementation

Business Strategy

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Strategic contexts and terminology

Role of strategy, mission, vision, objectives, goals

Stakeholder analysisTypes of stakeholders & stakeholder mapping

Environment auditing:

PEST Analysis

Porters 5 force analysis

Strategy Formulation

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The organisational audit

SWOT analysis

Product portfolio analysis

Value-chain analysis

Strategic positioning

Ansoff growth matrix Mergers and acquisitions

Benchmarking

Strategy Formulation

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The Planning Framework

The nature of Planning

The Process of Planning

Strategic Planning

Strategic planning techniques:

BCG growth-share matrix

Directional policy matrices

SPACE (Strategic Position and Action Evaluation)

PIMS (Profit Impact of Market Share)

Strategic Planning

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Market entry strategies

Organic growth

Merger or acquisition

Strategic alliances, joint ventures & franchising

Substantive growth strategies:

Horizontal and vertical integration

Related and unrelated diversification

Limited growth strategies

Ansoff growth matrix

Innovation

Strategy Evaluation and Selection

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Disinvestment strategies

Retrenchment

Turnaround strategies

Divestment & liquidation

Strategy selection

Suitability, Feasibility & Acceptability

Strategy Evaluation and Selection

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The realization of strategic plans to

operational reality:

Communication

Teams

Resource allocation:

Finance, human resources, materials & time

Review and evaluation

Performance monitoring & Review

Strategy Implementation

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Strategy Formulation

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What is Strategy

"Strategy is the di rect ion and scopeof anorganization over the l ong- te rm:which

achieves advan t agefor the organization

through its configuration of resourceswithin

a challenging env i ronment, to meet the

needs of marke tsand to fulfill s takeho lder

expectations".

(J ohnson and Scholes, 2006)

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In general terms strategy means ways of achieving onesobjective.

Strategy is a dec ision or a stream of dec isions taken and act upon

to achieve a particular objective.

The primary and fundamental purpose of using strategy is to ensuresurvival, superiority and strength over its rivals.

Strategy was originated in the pre-c ivilized soc iety and kept on

evolving with the mankind.

Strategy was used in building core civilizations of the society suchas Greek and Roman civilizations.

Strategy has evolved in modern society where it has become the

foundation of todays modern management.

Role of Strategy

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Vision is what keeps us moving forward, even against discouragingodds. For example, a business may envision a community where

every person has access to their product.

Vision is the most powerful motivator in an organization. If it's vivid

and meaningful enough, people can do astounding things to bring

it to realization.

A vision statement describes an ideal future. It answers the

question, "what impact do we want to have on society?"

The vision of a business conveys a larger sense of organizational

purpose, so that employees see themselves as "building an

apartment complex " rather than "laying stones."

Vision

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Mission is what you want to achieve by starting thebusiness. This must be reexamined and refreshed

periodically if an organization is to remain dynamic.

Mission statements describe the overall purpose of an

organization: what you do, who you do it for, and how

and why you do it.

It sets boundaries on the organization's current

activities.

Reviewing the mission gets an organization back to

basics.

Mission

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Objectives

Objectives are specific outcomes that anorganization wishes to achieve by carrying out its

activities.

Functions of objectives are It can be broken down in to different levels

Provide c lear statements

Provide a focus to all activates

Provides Control of actual performance

Provide a base for evaluation.

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Mission

CorporateObjectives

Functional Objectives

Team Objectives

Individual Objectives

The objectives hierarchy

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Business goals and objectives

Goals can be defined as the intentions behinddecisions or actions, the states of mind that

drives individuals or organizations to what they

want to do

Operational goals can be used in developing

objectives;

An operational goal: Cut cost

The objective: Reduce budget by 5%

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A group of people or a body who has an

interest on the organization

A group of people or a body who willinfluence the direction and interests of the

organization

A group of people or a body who can be

influenced by the organization

Stakeholder Defined

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Internal Connected External

Managers

Employees

Shareholders

Bankers

Customers

Suppliers

Government

Local Authorities

Pressure Groups

Competitors

Types of Stakeholders

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Stakeholder Map

KeepSatisfied

KeyPlayers

Minimal

Effort

Keep

Informed

Major

Customer

Large

Shareholders

PressureGroups

St k h ld i

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Stakeholder mapping

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Thank you!