To develop a rigorous business strategy, organizations all must perform business strategy development that starts with a agreed upon set of beliefs around its current situation and existing strategic barriers to growth. The next steps include depicting what the desired vision of the organization is and then going into the details of strategically planning how to get to that state. To properly gauge and analyze your strategic challenges, you must begin with a comprehensive current state understanding of your situation. It is also important to realize that there is more to strategy than just winning. Business strategy is about value innovation, strategy is about focus, and strategy is about speed . Strategy development process has evolved through 5 key stages since the early 1900s.
Strategy development started with a focus on financial planning in the 1950s, moving to sustainable business planning in the 1960s, to strategic planning in the 1970s and ultimately to a focus on strategic management in the present day. Changes to strategic mindset represent an ever evolving, emerging business leaders, and emergence of disruptive technologies and changes. A lot of business strategy is also hinged on ideas in the 1970s, where the focus was around thinking strategically to out maneuver competition and the business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix were actively used for the first time. In the current day, the strategic development theme is on integrating strategic planning and execution with a stress on the primary notions of core competencies, strategy planning and execution, and balance scorecard analysis.
Within the strategy development process, it is noteworthy to point out that your company should conduct rigorous business market analysis. There are also several market place analysis characteristics, including market place sizing, pricing changes, product development, market place characteristics, market force structure, and historical trends. Understanding how to do a market analysis involves the elements of supply analysis and demand analysis, which includes segmentation and segment analysis, understanding consumer buying behavior, and historical analysis. Proper business market analysis involves defining the market scale and the study scale, understanding the core business issues, and planning effectively. Remember that you should evaluate what makes a market unique, such as a high degree of government regulations, existence of competitive fragmentation, and importance of R&D. There are a number of market environment evaluation drivers, including ones that are socio-demographic, economic, political, technological, and current trends.
A great tool used in strategic planning is scenario planning analysis. Scenario planning techniques is also called scenario thinking and scenario analysis. Oftentimes, the scenario planning process is performed in a workshop environment, where key stakeholders, c-level members, subject matter experts, and third party consultants, are gathered in a 3 day off-site location to decide on various future state scenarios. An important task in the scenario planning framework is choosing the primary axes of uncertainty within the context of a scenario map. Scenario planning is used to help businesses plan for and make flexible long term organizational restructuring plans.
The strategic thinking of modern business organizations has been shaped by militant strategists since 400BC when Sun Tzu wrote the Art of War. Sun Tzu spoke about indirect corporate strategies when Sun Tzu asserted that winning without fighting is the pinnacle of skill on the battlefield. Sun Tzu wrote the Art of War, which has been adopted into a business strategy book. In Sun Tzus Art of War, he spoke about several fundamental factors in military strategy and each of these factors can be directly translated to terms of business strategy. Sun Tzus thoughts about the factor of terrain, if we were to take that into the context of companies competing today, translates to markets, industry structures, value propositions, and industry forces.
Today, there are two pillars around strategic management. Mintzberg also advocates a transformation of business practices, where management recognizes the need and has the ability to manage complete business operations optimization. Joseph Bower believes that the strategic planning and financial budgeting process is in the focus of strategy development. Bower defines strategic intent as the observable and communicated corporate strategy. Bowers school of thought is called the Resource Allocation Process RAP framework. Capital market context is also looked at, which includes demands and influences of sources of capital, such as investment banks. RAP based strategy planning and budgeting is a bottoms up driven way to identification and picking of core business opportunities. In the Resource Allocation business framework, when market context is discussed, we are evaluating the demands of the primary customer base,in addition to technological development. Mintzberg proposes 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. Organizational context is made up of governance and the organizational structure, definition of performance measures and incentives, and managements beliefs and strategic frames.
LearnPPT is a great online resource for learning and refining business strategy development knowledge. The site contains a wealth of PowerPoint presentations breaking down various business strategy frameworks and ideologies. In its ever growing collection include corporate strategy toolkits, business analysis documents, Excel-based financial models, and business presentation diagrams such as sales funnel PPT templates. Their corporate strategy and presentation materials have been used widely across the world in over 40 countries in international Fortune 500 corporations. LearnPPT asserts that all products have been developed by former strategy and management consultants from big name consulting firms, like McKinsey and Bain. You can find many documents covering supporting business units, such as governance, supply chain management, and IT.
Strategy Development Strategies
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