Business Strategy

A business strategy is the process that identifies the product market, the level of investment, the functional area strategies needed to compete in the selected product market and the strategic assets that underlie the strategy and provide the sustainable competitive advantage (SCA).

In the Multiple Businesses business strategy may include the development of synergistic effects across the businesses—the creation of value by having business units that support and com­plement each other and the allocation of resources over the business units.

Differentiation versus Low-Cost Strategies

A differentiation strategy is one in which the product offering is differentiated from the competition by providing value to the customer, perhaps by enhancing the performance, quality, prestige, features, service backup, reliability, or con­venience of the product.

A low-cost strategy is based on achieving a sustainable cost advan­tage in some important element of the product or service.

I think the differentiation strategy is more efficient in the high sector of the society and it loses its efficient by moving down to reach the low sector.

But the low cost strategy is more efficient in the low sector of the society and it loses its efficient by moving up to reach the high sector.

Focus strategy

It is involves focusing the business on either a relatively small buyer group or a restricted portion of the product line.

Preemptive move

You take "first-mover advantages", so competitors must be inhibited or prevented from duplicating or countering it

Synergy

It is linked to another business within the same firm or division. The two businesses may be able to share a sales force, office, or warehouse and thus reduce costs or investment.

A STRATEGIC BUSINESS UNIT

SBU is any organizational unit that has a defined business strategy and a manager with sales and profit responsibility. The concept was formulated by firms as a way to help develop an entrepreneurial thrust in a diversified firm by making business units more autonomous and strategy development less centralized.

Strategic Market Management

Process of developing and implementing strategies:

·        Budgeting: The basic assumption is that the past will repeat itself.

·        Long-Range Planning: Past trends will continue

·        Strategic Planning: New trends and discontinuities are predictable

·        Strategic Market Management: Planning cycles are inadequate to deal with rapid changes

Now we are going to talk about the strategic market management which contains several distinct characteristics and trends.

External, Market Orientation

Organizations need to be oriented externally—toward customers, competitors, the market, and the market's environment.

Proactive Strategies

A proactive strategy attempts to influence events in the environment rather than simply react to environmental forces as they occur

Importance of the Information System

The determination of what information is needed, how it can be obtained efficiently and effectively, and how it should best be analyzed, processed, and stored can be 1cey to an effective strategy development process.

On-Line Analysis and Decision Making

It is the system must be structured enough to provide assistance in an inherently complex decision context, sensitive enough to detect the need to precipitate a strategic choice, and flexible enough to be applied in a variety of situations.

Entrepreneurial Thrust

There is a need for the development of organizational forms and strategic market management support systems that allow the firm to be responsive to opportunities

Implementation

Implementation of strategy is critical. There needs to be concern about whether the strategy fits the organization—its structure, systems, people, and culture—or whether the organization can be changed to make the strategy fit

Global Realities

Global markets are ex­tremely relevant to many businesses, and it is a rare firm that is not affected by competitors either based in or with operations in other countries.

Marketing

Marketing is by its very nature concerned with the interaction between the firm and the marketplace. 

Tools and concepts such as product positioning, the product life cycle, brand equity, brand loyalty, and customer-need analysis all have the potential to improve strategic decision making.

Organizational Behavior

It is the link between strategy and other elements of the organization, such as systems and the management of people.

Finance and Accounting

It is a rich research tradition relating to diversification efforts, acquisitions, and mergers.

Finance has also con­tributed to an understanding of the concept of risk and its management.

Economics

The concept of transaction costs has been developed and applied to the issue of vertical integration. Economists have contributed to the experience curve concept, which has considerable strategic implications.