When considering the question of the introduction of a novel business model, in to an established marketplace, consideration must be given to the details of how the introduction will take place, what aims, goals and boundaries the organization will have and how progress towards those aims will be assessed and monitored; that is, a business strategy must be formulated and strategic management processes must be emplaced.
This chapter aims to critically assess academic and professional literature concerned with strategy, strategic management, development, planning and implementation. Consideration will also be given to the theory of business models.
2.1 What is Strategy? What is Strategy Management?
The Oxford English Dictionary defines
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Second, an examination of the organization’s competitive environment, including consideration of why some competitors outperform others.
More recently, Nag, et al, carried out an in-depth study examining the same question. The approach they chose was to survey a range of business professionals, from different business craft groups, as to what they felt Strategy Management meant. In essence, they defined it as an approach to deciding on and achieving a firm’s goals and aims based on assessment of its resources, internal and external environments (Nag, 2007).
2.3 Strategy Development & Planning
2.3.1 Development
As discussed above, the initial step of Strategy Management is to actually develop the Strategy to be used. In this vein, Martin (2010) described a 5-step process, running through the things that need to be considered in the formulation of a business strategy, summarized as below:
1. Set goals / aims and benchmarking processes.
2. Across the potential field available to us, where will we choose to play and not play?
3. Determine market and competitive boundaries.
4. Decide what capabilities are required to progress towards goal.
Today, Strategic Management is something really important for companies in order to remain competitive. It is also important to know the definition of this term in order to well understand it. According to the Contemporary Strategic Management 2nd edition book (Grant, Robert, Bella Butler, Stuart Orr and Peter Murray – 2013), “Strategic Management is the process of thinking strategically, setting objectives for the organisation, planning and implementing the necessary changes, and measuring the outcomes.” By knowing it we can see that strategy management is very important for a company. Indeed, strategy is essential for the surviving of the company but also essential to know how the company allocates its resources and how it will achieve its
Strategy is 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. A strategy is a plan of action designed to achieve a specific goal or series of goals within an organizational framework.
When it comes to a successful company or organization, having a mission, vision and valuable actions end up making an organizations strategic plan. Companies continue to have their corporates in their businesses use tactical strategies and make them into pursuable goals to be reached at the end. While researching for a business to write about I came across a very popular retail store by the name of Kohl’s and will be discussing different areas including the mission and vision statement of each different document that will end up being useful to the company when developing some sort of difference when being compared to other retail stores that will end up making them stand out at the end. Kohl’s
Strategy is about which product or services should be produced and offered to which markets and which the customer needs and wants are met whilst achieving the objectives of the organization while making a profit – how each business aim to achieve its mission within its selected area of activity.
In effect, strategy is the pattern of actions managers employ to achieve strategic and financial performance targets. They suggest that the firm's mission and objectives combine to define "What is a business and what will it be?" and "what to do now" to achieve organization's goals. Therefore a strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. It is also an overriding purpose that can align and mobilize all parts of the organization.
Business Model and Strategic Plan Part 1: Conceptualizing a new product or service division of an existing business
‘The flame of competition has changed from he smokey yellow to intense white heat. For companies to survive and prosper they will have to have a vision, a mission and strategy’ (Johnson, 2001). The use of strategy in this well known quote from the Chief Executive of Lloyds TSB Peter Elwood shows the importance strategic decisions plan in the modern era for organisations. To supplement this, strategy is theoretically defined as ‘the direction and scope of an organisation over the long term, which achieves advantages in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations’ (Johnson et al., 2005). According to this definition, the
Harberber and Rieple (2008) define strategy as a set of intentional or inadvertent set of actions through which an organization develops the required set of resources, efficiently target valuable customers, meet financial targets and competes effectively. These strategic decisions drive the long-term direction of the organization, the scope of its activities, help gain advantage over competitors, and address changes in the business environment.
It is crucial to the vitality of the new division for the Walmart brand be viewed as what the customer expects. Customers are the company and the objectives match their importance. Evaluating market share offers insight to the position of the company. Increase in segment sales such as apparel, home, hardliners, health & wellness, entertainments, and groceries after the new division implementation is a result of success in market share (Soni, 2015). Evaluating customer feedback using the research company Customer Service Scoreboard provides a way to measure the promised vision, mission, and appreciation (CustomerServiceScoreboard.com, 2015). Lastly, customer acceptance assures trust in product offered as valued. Monitoring new sales percentage provides a visual to that trust. Table 2. Customer Success Objectives
Strategic management covers enterprise wide strategy formulation, implementation and evaluation. It emphasizes sustained wellbeing of organizations. Why? According to Thomas and Strickland (1996) strategic management
Practice strong leadership to motivate employees and to propel the strategic systems. (Arthur A. Thompson, Peteraf, Gambel, & Strickland, 2016, pp. 288-90)
The game of strategy is about being different and staying different. How is this achieved? Formulating a business model need not be as complicated as predicting the future market and the actions of competitors. However, as Magretta mentions, strategic thinking is necessarily an
A business model explains the basis of how an association creates, distributes, as well as captures financial, communal, along with other shapes of importances. And also a business model is too implicit as a holistic way towards illumination how firms accomplish commerce .The business model theory is becoming more and more popular inside IS, supervision and plan literature. It is applied within a lot of fields of investigate, including equally traditional plan theory as well as in the developing organization of theory on e-business.
A firm understanding of the principle of supply and demand are extremely important in order to give one the best opportunity to develop a successful business model. The ability to correctly determine the demand for a product is imperative to ensuring one’s product fills a need in the market. Businesses fail everyday because the demand for their product was miscalculated during start-up. On the other hand, there are many businesses that are successful because they have developed a product in demand and respond well to changes in demand due to outside factors. Fresh Healthy Vending provides such a product. With any product, there are things that can change the demand, cause changes in supply, and change the quantity demanded.
Strategic Management can therefore be defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives. This process therefore comprises of three critical tasks and they are as follows: