Define and prove about Business Strategy.
Strategy: It is simply called as Long - term planning for a particular thing. It may be any thing business, electronics, games etc. This particular strategy is analyzed and implemented in the business to improve the company turnover. It is just implemented to achieve the maximum benefits. Strategy is not only used for this mainly it is used to design our business according to the market levels and the requirements of the particular product.
We cannot achieve the highest position in the business in one single step or either cannot achieve it in single step. It is a step by step process where each and every step should be planned in such a way that it gives us the required fruit to improve our business. Such planning like thinking and designing the future of the business is known as Strategy. Strategy thinks before and applies next to achieve the best. Each and every work needs strategy.
There is a well known saying that "All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved" by Tina Brown. It means that every one sees what is the last end result of our business but what is the exact step or the strategy involved in achieving this fruit.
Different places where strategy is applied:
I need to say this is the practical question where it is hard to answer this question. Because in each and every point there is some sort of strategy applied to it with out which it is difficult to achieve the best fruit of success.
- Strategy is applied to know the present situation in the market and design our business
- It is applied in long - term to achieve the best fruits
- It is applied at various levels of our business to gain the success
- It is applied in terms of planning, decision making, thoughts and reviews of our business
Different types of strategies:
As I said you that there are various places where we apply the strategy in the same way there are different types of strategies because each and every time we cannot apply the same strategy in accordance to the situation we have to plan and apply the strategy to get the success. They are:-
- SWOT analysis
- PESTEL analysis
- Scenario planning
- Five forces analysis
- Market segmentation
- Competitor analysis
- Boston Box matrix
- Directional policy analysis
- CSF analysis
These are nothing but the various analyses which are applied known as strategies to achieve success in the business. Let us discuss some of these analysis in which they can be applied to the business.
This analysis is used when starting the business. It is used in both Internal and External factors. Internal factors are like strengths and weakness where as external factors are like opportunities and threats.
SWOT is nothing but Strengths, Weakness, Opportunities and Threats of a particular organization. Let me tell you about this swot analysis using simple figures I and II.Strengths:
- The organization is Special in that particular product
- The best service in the market
- The quality of the product is excellent
- Each and every aspect which adds a value to the organization.
- Lack of Experience
- Lack of good service
- The quality of the product is not good
- Location i.e., where the business is situated
- Invested by ineffective competitor
- Moving to good place to get better profits
- A good competitor in to the market
- The competitors have good access than us
This is one of the most important analysis which is must and should before any organization starts its marketing. See, marketing is the only thing where we can succeed only when the organization has a wide variety of circle and well known in the people. For which there are certain factors they are compulsion to the organizational environment.
Such factors are as follows:
- Political Factors
- Economical Factors
- Socio cultural Factors
- Technological Factors
This is the main and important factor in the strategy planning. Many people think that going on with their own business and their own strategies forgetting about the competitors. We have to analyze the market strategies and the level of the competitors, so that we could easily plan about our organization next steps and strategy. The organization should upgrade each and every moment to achieve the targets, for which we have to not only analyze our strategy but also our competitors so that we could easily understand where we stand in the market. If the competitor is more advantageous then the raw material would be cheaper than we could get it. If a firm practices to analyze the competitor regularly then the firm improvements would be better than ever. If we can analyze the strength of the competitor it would be easy for the firm to grow and achieve the targets easily.
Analyzing with competitor means we have to select a competitor according to our status and position in the market and then act according to it. While analyzing the competitor we have see these things:
- What are plans and strategies which are used by the competitor
- For a particular action what is the reaction of the competitor
- How can we attract the competitor for our own advantage?
The normal knowledge about the competitor is not enough for us to decide about the competitor. The systematic and rigorous planning about the competitor is required for us to analyze the competitor.
Competitor Analysis Frame work:
Now let us see the Analysis made by Michael Porter about the competitors:
There are four main things which we have to analyze about the competitor they are:-
- Their objectives
- Their assumptions
- Their Actions and Strategies
- Their Compatibilities
Their objectives and assumptions are utilized to run the competitor where as their strategies and compatibilities are utilized are what they are doing and what they can do. This particular thing can be shown with a figure:
Prof AzmiScenario planning, also calledscenario thinkingorscenario analysis is astrategic planningmethod that some organizations use to make flexible long-term plans.
Royal Dutch Shell, one of the first and leading adopters, defines scenarios as follows: Scenarios are carefully crafted stories about the future embodying a wide variety of ideas and integrating them in a way that is communicable and useful.
This is nothing but planning about the future of the organization or firm based on the current available themes and prospective in the firm.
Typically, the scenario planning process is as follows:
- Recognize the members who will contribute a huge number of views.
- Share knowledge to the participants how big shifts coming in society, economics, politics, technology, etc.
- These all views put together connected in patterns
- Group draws a list of priorities (the best ideas)
- Draw the scratch pictures of the future based on these priorities
- Recognizing early warning signals which are indicative for a particular scenario
- Monitor, evaluate and review scenarios
Five forces analysis:
A formal industry analysis such as Michael Porter's Five Forces Model is more in depth than simply looking for trends and general industry information. It can also help you better develop successful marketing strategies. In this model it is obviously simple that there are five forces which are acting on the single firm with which if all these forces are acted together then the firm is in advantage.
Porter explains that in any industry there are five forces that influence what happens within the industry:
- Potential Companies
The other firms which offer the same product in the market with the price more than us or with the price less than us both are the competitors for us in the market.
These are nothing but the off - line competitors which are about to enter in to the market for the entry into the market to sell the same product at very cheaper price or else through online.
The other means of the product in the market which is exactly equal in services, quality and other resources in the market.
Suppliers are those who supply the raw materials to the firm for preparing the finished goods.
One who buys the finished goods from the market are the customers.
Boston Box matrix:
The Growth-Share-Matrix - commonly known as Boston Box - was developed by the Boston Consulting Group (BCG) in the seventies. It is a tool of portfolio management. It evaluates the products of the firm according to their share in the market with respect to their market shares. According to which it can reveal the clear and deep perception of the situation.
The Boston Box model will mostly depend on these premises:
- The profits generated from a particular product are in its function of a market share. These two correlate directly.
- We can increase the revenue only through investments. According to this box the investments are mainly expenses for marketing, distribution and product development.
- The expensed depends on the general market growth for that particular product.
- High market shares are required for the additional investments.
- It is clearly said that no business can grow infinitely
Many companies will have more than one Influencing project at a time, these all the projects are to be solved and executed at a time which calls for the scarcity of the raw requirements of the projects. It's a tough task to share the resources between these two projects exactly. Then the Boston box provides the asses to these things easily and accessible to all the projects.
Following an elating period of 'star' growth in the early 1970s, the centre party in British Politics reached the 'steady ship' in the mid 1970s but was quickly followed by a 'brick wall' in the late 1970s as the party vote declined. At this point the product was re-invented: the 1981 launch of the all new Social Democratic Party saw a 'question mark' quickly rise like a phoenix from the ashes through the 'star' stage to reach the 'steady ship' again. In order to continue growing in influence an influencing group must innovate.
Directional policy analysis:
We can simply say that this Directional Policy Analysis is a framework to review the performance and potential of each and every product and to decide which products to:
- Increase the market share
- To maintain the present market share in the market
- How to invest/sell the last potential sales in the market
- Whether to complete or else to quite the firm immediately
Plan and define the steps to agree the markets in which the company is competing its business. This should be highly and exactly informed to the external affairs or customers. For example in the railway industry of British market it is named as Transport. When transport means the car/truck. It is nothing but to know the market before entering in to the market.
Decide Market Attractive factors:
For each and every product released in the market are to be attracted by the customers relatively in the over all market. Then check whether where we are lagging behind which factors to attract the customers.