“Mission leads to strategies leads to structure”
Michael Porter: “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. The essence of strategy is choosing to perform activities differently than rivals do.”
“Competitive strategy is about being different”
Stephen Haines, one of the world’s top strategy gurus, defines strategies as: “Strategies” are considered the primary means (methods, approaches, or groups of actions) that focus your organization toward your desired ends (outcomes, results, or vision, mission, and positioning).”
“Primary means that focus your organization toward your desired ends”
Peter Drucker describes strategy as an “analytical thinking and commitment of resources to action.”
“Analytical thinking and commitment of resources to action”
Boston Consulting Group says, “the goal of strategy is the pursuit of sustainable competitive advantage.
What is Business Strategy?
DEFINITIONS
Strategic Planning
Strategic planning is the process of
conducting research, defining strategies, and developing business models
and plans to achieve the organization’s vision. Strategic planning is
dynamic and assumes that the organization needs to respond to a changing
environment.
Business Model
A business model describes how the
organization will implement the strategy. A business model explains most
importantly how the organization will create and deliver substantive
value to the customers. The model includes a review of the key aspects
of the organization such as its vision, values, offerings, strategies,
structures, processes and policies.
Innovation
Innovation is doing something different
or new to improve outcomes. Innovation in organizations encompasses the
end-to-end cycle from R&D invention to sales.
Invention
An invention is the development of something that has not before existed.
Long-Range Planning
Long-range planning is the process of development of a plan to accomplish goals over a period of several years.
Strategy
Strategy is how an organization intends
to reach its objectives. Business strategies are developed to
differentiate the business from its competition. The most effective
strategies are often those where the organization’s talent and passion
merge with viable economic opportunities.
Strategic Innovation
“Strategic Innovation is the creation of
growth strategies, new product categories, services or business models
that change the game and generate significant new value for consumers,
customers and the corporation.” (By Derrick Palmer & Soren Kaplan at
Innovation Point)
Strategic Management
Strategic management involves:
- Identify objectives for the organization
- Defining strategies that will give the organization a competitive advantage
- Managing the organization on a day-to-day basis to achieve the objectives
Strategic Plan
A strategic plan is a set of decisions
that outline what the organization will do, why it will do it, what its
priorities are, and how it will move forward to achieve the desired
future.
Strategic Thinking
Strategic thinking means asking, “Are we
doing the right thing?” It involves looking for best ways to help the
organization succeed.
Structure
The plan to carry out primary tasks and duties.
SWOT Analysis
SWOT analysis is a strategic planning
method used to evaluate the Strengths, Weaknesses, Opportunities, and
Threats involved in an organization or project.
System
The processes, procedures, policies and technology to carry out activities of the organization
Tag: What is Business Strategy?
________________________________________________________________Who was Alfred Sloan?
Alfred
Sloan is referred to as the “Father of the Modern Corporation.” Alfred
loved academics. He was one of the youngest to enter MIT and he
graduated in three years with an electrical engineering degree. After
graduating, he went to work for a floundering ball-bearing manufacturing
company. The company was on the verge of bankruptcy. Alfred’s mind was
constantly going as he sought new ideas to improve the company. He
convinced his father to purchase the company. Within six months of the
purchase, he turned the company around. He then ran the business for 17
years, when he convinced General Motors to purchase it.Alfred became a senior manager at GM. After spending five years studying GM carefully, he developed a proposal to revamp the company. His proposal was to decentralize GM into largely self-autonomous divisions. He believed that top management should not interfere too much with the operations of the various businesses. Alfred became the chairman and by 1923 he became president of GM. He developed additional models and methods. In 1923, the firm had 20% of the U.S. auto market. By 1931, GM surpassed Ford in capturing market share.
Who was Peter Drucker?
He
was a management consultant, writer and a teacher. His impact was
widespread and deep. Early in his academic career, he spent two years
analyzing General Motors (GM). He was paid by GM, was able to accompany
the CEO Alfred Sloan to meetings, and was able to look at everything at
GM. This experience lead to his book “Concept of the Corporation” which
quickly became a best seller both in the U.S. and Japan. Peter’s
objective was to really understand what makes a company tick.Until Peter’s book the philosophy of management was “top down.” In other words, leaders made decisions and people simply executed. GM had enjoyed tremendous success under Alfred Sloan, and Peter was anxious to find out why. He was intrigued with human interactions, decision making, internal politics, structure, flows, and autonomy. Drucker suggested that GM continue to focus on decentralization. In other words, GM should continue to create and empower divisions.
Alfred was excited about Drucker’s work until he published his book. While it praised GM for its management approaches, Alfred took his book as a negative critique of his leadership and GM.
David Willden
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