To develop a rigorous corporate strategy, businesses must perform business strategy development that starts with a clear set of beliefs around its current situation and existing strategic barriers to growth. The next steps include forming what the future state vision of the organization is and then going into the details of planning how to get to that state. In order to understand your strategic challenges, you must begin with a complete, end-to-end understanding of your situation. Strategy is about value creation, strategy is about selectivity, and strategy is about flexibility. Business strategy development has evolved through 5 key phases over the years.
Strategy development started with a focus on financial planning in the 1950s, moving to long-term corporate planning in the 1960s, to strategic planning in the 1970s and eventually 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 corporate strategy is also hinged on ideas in the 1970s, where the core theme 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. In the current day, the strategic development theme is on integrating strategic planning and implementation with a stress on the key concepts of core competencies, strategy planning and execution, and balance scorecard analysis.
In the strategy development process, it is always critical to conduct rigorous market analysis. There are also a number of market place analysis factors, including market development, pricing changes, product development, market place characteristics, market force structure, and current trends. Understanding what is a market analysis involves supply analysis and demand analysis, the latter of which includes segmentation and segment analysis, understanding consumer buying behavior, and industry analysis. Proper market analysis example involves creating the market scope and the study scale, understanding the core business issues, and planning effectively. It is important to understand what makes a market unique, such as a high degree of government regulations, high competitive fragmentation, and importance of R&D. There are several market environment evaluation factors, 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 is also called scenario thinking and scenario planning analysis. Oftentimes, the scenario planning process is performed in a workshop environment, where decision makers, executives, subject matter experts, and third partyadvisors, are gathered in a 3 day off-site conference to decide on various future state situations. An important task in the scenario planning framework is choosing the primary axes of uncertainty after building a 2-axis scenario map. It is used to help businesses plan for and make flexible future estate strategic plans.
The way business leaders evaluate and analyze strategy within that of modern business organizations has been shaped by militant strategists since the beginning of organized warfare. Sun Tzu spoke about indirect strategies when Sun Tzu asserted winning without fighting is the highest of skill on the battleground. Sun Tzu preached to know and attack the enemys strategy. In Sun Tzus Art of War, he wrote about several core 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, in todays business landscape, translates to markets, industry structures, market positions, and Porters Five Forces.
In current thinking, there are two pillars around strategy management. Mintzberg also advocates a transformation of business processes, where management recognizes the need and has the ability to manage organizational business operational transformation. Bower places the emphasis of the strategic planning and financial budgeting process is in the focus of strategy development. Bower defines strategic intent as the observable and communicated primary strategy. This is called the Resource Allocation Process RAP business framework. Capital market context is also analyzed, which is defined as demands and influences of providers, like funds. Resource allocation based strategy planning and budgeting is a bottoms up driven way to locating and picking of important business initiatives. In the RAP business framework, when we look at market context, we are analyzing the demands of the primary customer base, as well as technology development. Henry Mintzberg proposes for an organization, bottom-ups strategy to drive business strategy development that hinges upon organizational configuration. In organizational configuration, the organization engages in behaviors based on adaptation to contexts. Organizational context is comprised of organizational governance and the organizational structure, basis of performance metrics and rewards, and managements beliefs and strategic mindset.
The online destination LearnPPT is a great website for understanding and improving your business strategy development fundamentals. The site houses a wealth of PowerPoint presentations outlining different types of business strategy frameworks and notions. In its increasing collection include growth strategy presentations, market analysis documents, Excel-based financial analysis models, and business presentation templates such as Crawl Walk Run templates. Their business strategy and presentation materials have been used globally in over 50+ countries in global Fortune 100 companies. The business states that all presentations were developed by former strategy and management consultants from established consulting firms, such as McKinsey and BCG. There are many PowerPoints covering supporting functional areas, such as governance, supply chain management, as well as IT.
Strategy Development
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