Lecture 1: Business Strategy – Concepts and Trends in its Management

Lecture 1 Business Strategy Concepts and Trends in its Management.doc

Strategic Market Management – Four thrusts:

  1. A structure and methodology for analyzing the EXTERNAL ENVIRONMENT
    • WHY? Because great strategic planning is NOT an extension of last year’s strategic plan. The external analysis leads to the type of breakthrough insight needed for long-term sustainable success.
  2. These sustainable successes are defined as SUSTAINABLE COMPETITIVE ADVANTAGES (SCAs), without which a business will eventually be middle-of-the-pack, treading water, or dying/ dead.
  3. Investment decision: where to invest or disinvest capital for growth (acquisition; merger; vertical integration; diversification, etc.) or retrenchment.
  4. Implementation.

Changes in the world of planning:

  1. Knowledge management: access to data and information; informatics; empirical research
  2. External market (customer) orientation
  3. Time compression
  4. Globalism
  5. Revised demographics: Hispanics (U.S.); creative class (globally)

More than detecting and reacting to change, good strategic planning anticipates or even creates changes to the market forces that drive the enterprise.

What is a strategy?

War
Sports

FORMAL DEFINITION:

  1. The product market in which the business is to compete
  2. The level of investment

    • Invest to grow
    • Invest to maintain existing market position/ share
    • Milk the Business
  3. The functional area strategies needed to compete in the selected product market

    • Product line strategy
    • Marketing strategy
    • HR strategy
    • Distribution strategy
  4. Underlying competency or asset (SCA) that will give competitiveness

For multi-business unit enterprises

  1. Allocation of assets across business units (Dell; Sears; GM)
  2. Synergy across business units (ESPN, Disney; ABC)


Pg. 6: Six elements condensed:

STRATEGIC THRUSTS

KEYS:

–           Differentiation vs. Low Cost


OTHERS:

–           Focus

–           Preemptive mover

–           Synergy


BUT THE KEY OF THESE THRUSTS IS that they exemplify the SCAs behind the enterprise’s success.

BOTTOM LINE: WHY SMM?

To stay focuses on strategies and a strategic outlook, especially in a rapidly changing business environment

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