Study notes
- Levels: AS, A Level
- Exam boards: AQA, Edexcel, OCR, IB
A strategic plan is a document that establishes the direction of an organization. It can be a single page or fill up a binder, depending on the size and complexity of the business and work. Strategy is the quintessential PC genre, keeping us buried in maps, army lists and build orders since the earliest days of PC gaming. And it's one of the most diverse, catering to everyone from.
Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”. Find new ideas and classic advice for global leaders from the world's best business and management experts.
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Share by emailBusiness strategy is all about the choices that business make about about how to achieve their objectives.
Johnson and Scholes define strategy as:
'...the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations'.
In other words, strategy is about:
- Where is the business trying to get to in the long-term (strategic direction)
- Which markets should a business compete in and what kind of activities are involved in such markets?
- How the business perform better than its competition in those markets?
- What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete?
- What external, environmental factors affect the businesses' ability to compete?
- What are the values and expectations of the stakeholders who have interest in and power over the business
Strategy at Different Levels of a Business
Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it.
Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a 'mission statement'.
Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.
Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.
How Strategy is Managed - Strategic Management
In its broadest sense, strategic management is about taking 'strategic decisions' - decisions that answer the questions above.
In practice, a thorough strategic management process has three main components, shown in the figure below:
Strategic Analysis
This is all about the analysing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of management tools, including:
PESTLE Analysis - a technique for understanding the 'environment' in which a business operates
Porter's Five Forces Analysis - a technique for identifying the forces which affect the level of competition in an industry
Market Segmentation - a technique which seeks to identify similarities and differences between groups of customers or users
Market Mapping - a way of assessing the competitive position of brands and businesses based around relevant dimensions.
SWOT Analysis - a useful summary technique for summarising the key issues arising from an assessment of a businesses 'internal' position and 'external' environmental influences.
Stakeholder Mapping - where a business identifies the most important stakeholders in terms of their power and influence
Strategy Magazine
Strategic Choice
Strategy Synonym
This process involves understanding the nature of stakeholder expectations (the 'ground rules'), identifying strategic options, and then evaluating and selecting strategic options.
Strategy Implementation
Often the hardest part. When a strategy has been analysed and selected, the task is then to translate it into organisational action.
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Share by emailJim Riley
Strategy
Jim co-founded tutor2u alongside his twin brother Geoff! Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs.
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AQA A Level Business Theories & Models Revision Cards
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