Concepts & Context of Business Strategy
Business Strategy
Mission
Goals
Objectives
Strategies
TacticsSales oriented efforts
Marketing oriented efforts
BusinessBusiness Strategy Hierarchy
Functional AreaStrategies
Product
Strategies
Functional AreaStrategies
Product
Strategies
Functional AreaStrategies
Product
Strategies
Critical Elements of Strategy Development
Set Goals and ObjectivesUnderstand Environment of
Business OperationsLearn from Experience,
Update ExperienceCritical Thinking
Key Strategy Concepts
Seek to establish a fit between business environment and strategy
Fit - Providing superior value through differentiated pieces of total offering
Key Strategy Concepts Drive change rather than adapting
to ito Quality and process improvement
are essential to superior valueo Measuring and tracking results is
necessary for continuous improvement
Summary Strategy Concepts Change in customers,
channels or competitors cause discontinuities in evolution of industries or markets
Companies seldom impact change in market
Keep up with changes in rules of the market
Resource Allocation
Includes infrastructure, personnel, finances etc.
Are not limitless
Strategic Planning Process is a resource allocation process
Boston Consulting Group: Growth Share Matrix
Market GrowthRate
High
Low
Stars
Cash Cows
Question Marks
Dogs
Relative Market Share
LowHigh
Growth Share Matrix: Star
High Growth, high Share Needs heavy investment; builds
market share Manage with market ownership
Eventually become Cash Cows
Stars
Cash Cows
Question Marks
Dogs
Growth Share Matrix: Cash Cows
Low growth, high Share Established, successful, invest
enough to hold market Cash generators Harvest to increase short term
cash
Stars
Cash Cows
Question Marks
Dogs
Growth Share Matrix: Question Marks
Low share, high growth markets
Requires cash to hold share What should be done? Match with organization’s
distinctive competencies Obtain resources needed Build these into stars or phase out, sell
Stars
Cash Cows
Question Marks
Dogs
Growth Share Matrix: Dogs
Low growth, low share May be self-sustaining One organization’s dog could be
another’s cash cow Discontinue, divest
Stars
Cash Cows
Question Marks
Dogs
DeclineDecline
IntroductionIntroduction
GrowthGrowth
MaturityMaturity
TimeTime
Sales Revenue/
period
Sales Revenue/
period
Growth Share Matrix and Product Life Cycle
Strategy of Market Ownership
Define Evolve Collaborate
Strategy of Market Ownership
Define market niche Work towards domination Brand identified as standard Competitors note
equivalence to such products
Define
Strategy of Market Ownership
Continue to evolve offerings Keep definitions of value current
with market Present these values to consumers
Evolve
Strategy of Market Ownership
Development of ancillary products by other organizations help owners build market
Third parties define their products as compatible with market owner
Market owner gains insight to other points of view within market
Collaborate
GE Multi-Factor Attractiveness/Strength
MatrixMARKET
ATTRACTIVENESS
BUSINESS STRENGTH
High
Weak
Low
Strong
Medium
Medium
Protect Position Invest to Build Build Selectively
LimitedExpansion or
Harvest
Manage forEarnings
Divest
Build Selectivelyor Manage for
Earnings
Protect &RefocusInvest/Grow
Selectively EarnHarvest/Divest
Build Selectively
Top Related