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McKinsey Market Research Report: Business Strategy Development i

To build a robust corporate strategy, organizations must perform business strategy development that starts with a collective understanding of its business positioning and identified strategic barriers to growth. The next steps include defining what the future state vision of the company is and then going into the details of planning how to achieve that state. In order to understand your strategic challenges, you must begin with a comprehensive current state understanding of your situation. Proper strategy development involves more than a focus on maximizing profitability. Strategy is about value creation, strategy is about focus, and strategy is about business agility.

Strategy development process has evolved through 5 key phases over the years. Much of business strategy is also hinged on ideas in the 1970s, where the focus of what business leaders devote their efforts to was around thinking strategically to beat competition and the business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix were actively used for the first time. Strategy development started with a focus on financial planning in the 1950s, moving to long-term business planning in the 1960s, to strategic planning in the 1970s and ultimately to a focus on strategic management in the present day. Shifts in strategic mindset represent a changing landscape, new business leaders, and emergence of disruptive technologies and trends. In the current day, the strategic development theme is on integrating strategic planning and implementation with a stress on the primary notions of core competencies, strategy planning and execution, and balance scorecard analysis.

Today, there are two primary schools of thought around strategic management. Henry Mintzberg opts for an organization, bottom-ups process to drive the strategy development process that adheres to organizational configuration. In organizational configuration, the organization engages in behaviors based on adoption to business surroundings. Mintzberg also advocates a transformation of business processes, where management recognizes the need and has the ability to manage top-down business transformation.

Different size organizations naturally experience different challenges and thus, undertake different approaches to managing their business strategy. A small to medium business may be more entrepreneurial in its approach to business growth and its operations are often much more lean and agile leading practices. Some companies may be in the nascent growth stages, whereas more established conglomerates are in the sustain phase. A global organization may employ a more structured strategic management model, due to its greater size and scope of both operations.

The strategic thinking of modern business organizations has been shaped by military strategists since 400BC when Sun Tzu wrote the Art of War. Sun Tzu hinted at indirect strategies when he said winning without fighting is the highest of skill on the battlefield. Sun Tzu preached to know and attack the enemy�s strategy. In Sun Tzu�s Art of War, he spoke about five core factors in military strategy and each of these factors can be directly translated to terms of business strategy. Sun Tzu�s thoughts about the factor of terrain, in today�s business landscape, translates to markets, industry structures, market positions, and competitive forces.

In the strategy development process, it is always critical to conduct rigorous business market analysis. There are also several market place analysis factors, including market size development, pricing changes, research and development, market place characteristics, market force structure, and current trends. Understanding how to do a market analysis involves both supply analysis and demand analysis, the latter of which includes segmentation and segment analysis, understanding consumer buying behavior, and historical analysis. There are a number of market ecosystem-based evaluation factors, including ones that are socio-demographic, economic, political, technological, and current trends. It is important to understand what makes a market unique, such as a high degree of government regulations, existence of competitive fragmentation, and importance of R&D. Proper market analysis involves defining the market and the study scale, understanding the core industry issues, and planning for the future.

This approach is sometimes linked to building a pricing strategy ppt for a new product or service. Penetration pricing involves bringing a product or service below entry price , often lower than existing competing products available in the market. Price skimming involves introducing the new product or service at a high price point relative to the rest of the market. However, building a pricing strategy powerpoint focuses one main question initially: whether to skim the market or penetrate the market.Strategy Development\nRelated Sites : strategy development


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