Business Strategy: what is it, who's it for and how to create one Chris Eaton LLB (Hons) C Dir CEO,...
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Transcript of Business Strategy: what is it, who's it for and how to create one Chris Eaton LLB (Hons) C Dir CEO,...
Business Strategy: what is it, who's it for and how to create one
Chris Eaton LLB (Hons) C DirCEO, The ILS Group Limited
Strategy
“We must plan for the future because
those who stay in the present will
remain in the past.”
Abraham Lincoln
Evaluating Strategy
A well formulated strategy helps to marshal and allocate an
organisation's capability into a unique competitive position
based on its relative internal strengths, weaknesses,
anticipated changes in the environment, stakeholders’
expectations and likely moves by present and potential
competitors.
Source J B Quinn - Adapted
Mission Statement
To have each guest leave the hotel completely satisfied
-Marriott Hotel Dubai
Shareholder is King
- Hanson Industries
No 1 goal is to provide outstanding customer service
- Nordstrom
Kill Caterpillar
- Komatsu
Getting Started
Start Big – Start Wide
P – PoliticalE – EconomicS – SocialT – TechnologicalL – LegalE - Environmental
Understanding the Competitive Situation – Porter’s Five Forces
Potential Entrants
Substitutes
Supplier Power Buyer PowerCurrent
Competition
SWOT Analysis
• Should provide a clear statement of strategic position
• Involve all
• Do regularly
• Perception or Objective Analysis?
• Prioritise and discuss impact
• Compare against competitors
Product Market MatrixOriginal idea by Ansoff
Product Development
Market Development
Diversification
Penetration
New product
Current product
Current market New market
Strategic Options
Two Core Strategies:
Differentiation
What don’t we do?
Cost Leadership
Cost not Price
Reasons for Failure
Cost Leadership•Basis of leadership duplicated – “Me Too”
•(N.B. Organisational and management skills most difficult to copy)
Differentiation•Price differential becomes too great to hold brand loyalty
•Buyer’s need for differentiating factor fails
•Imitation narrows perceived differentiation
Key Elements to Remember
• Start Big - Start Wide (PESTLE)
• Analyse the Competition (including new entrants and possible substitutes)
• Assess internal strengths and weaknesses
• Decide whether to cost lead or differentiate
• Decide what you don’t do
And remember…
Strategy is a process, not an activity