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    6 Business Strategy

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    Paupau
    The document discusses business strategy formulation, including conducting a situation analysis, crafting a mission statement and objectives, devising strategies using Porter's generic strategies and competitive strategies of cost leadership, differentiation and focus. It also examines strategic alliances along a continuum from mutual service consortia to value-chain partnerships as cooperative arrangements between firms for mutual benefit.

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    6 Business Strategy

    Uploaded by

    Paupau
    41 views27 pages
    The document discusses business strategy formulation, including conducting a situation analysis, crafting a mission statement and objectives, devising strategies using Porter's generic strategies and competitive strategies of cost leadership, differentiation and focus. It also examines strategic alliances along a continuum from mutual service consortia to value-chain partnerships as cooperative arrangements between firms for mutual benefit.

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    6 BUSINESS STRATEGY

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    The document discusses business strategy formulation, including conducting a situation analysis, crafting a mission statement and objectives, devising strategies using Porter's generic strategies and competitive strategies of cost leadership, differentiation and focus. It also examines strategic alliances along a continuum from mutual service consortia to value-chain partnerships as cooperative arrangements between firms for mutual benefit.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    41 views27 pages

    6 Business Strategy

    Uploaded by

    Paupau
    The document discusses business strategy formulation, including conducting a situation analysis, crafting a mission statement and objectives, devising strategies using Porter's generic strategies and competitive strategies of cost leadership, differentiation and focus. It also examines strategic alliances along a continuum from mutual service consortia to value-chain partnerships as cooperative arrangements between firms for mutual benefit.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 27
    At a glance
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    The key takeaways are that strategy formulation involves developing a corporation's mission, objectives, strategies and policies through situation analysis. It also involves strategic decision making and crafting a mission statement.

    The steps in the strategic decision-making process include crafting the mission statement, setting objectives, and devising strategies and policies.

    The five common elements of a well-crafted mission statement are that it must be short, simple, provide direction, enable employees to know what the company does and does not do, and be measurable.

    STRATEGY FORMULATION:

    BUSINESS STRATEGY

    Prepared by:
    Wilma G. Nonato, CHP,Ph.D.
    A FRAMEWORK FOR EXAMINING
    BUSINESS STRATEGY

    Strategy Formulation, often referred to as strategic


    planning or long-range planning, is concerned with
    developing a corporation’s mission, objectives,
    strategies, and policies. It begins with situation
    analysis: the process of finding a strategic fit between
    external opportunities and internal strengths while
    working around external threats and internal
    weaknesses.
    STRATEGIC DECISION-MAKING PROCESS
    MISSION AND OBJECTIVES

    One of the first steps in good strategy design should be crafting the mission
    statement for the organization.

    A well-crafted mission statement has five common elements:


    1. It must be short so that every employee can remember the statement.
    2. The design must be simple so that everyone in the company can
    understand what the senior leadership team desires.
    3. It has to provide direction to the activities of company employees.
    4. The statement should enable employees knowing exactly what the
    company does and what it does not do.
    5. The statement should be measurable so that the company can visibly
    see progress.
    BUSINESS STRATEGIES

    Business strategy focuses on improving the


    competitive position of a company’s or
    business unit’s products or services within the
    specific industry or market segment that the
    company or business unit serves.
    The 6 Key Elements Needed to Devise
    Good Business Strategies

    Leadership vision
    Culture
    Strategic Marketing Plan
    Management
    Systems
    Resources
    Michael Porter's Generic Strategies

    Photo source: https://www.mindtools.com/pages/article/newSTR_82.htm


    Image source: https://skytraxratings.com/philippine-airlines-certified-as-a-4-star-airline Image source: https://www.manilatimes.net/2021/12/21/entertainment-lifestyle/life-times/cebu-
    pacific-prepares-for-travel-recovery-with-a330neo-delivery/1826756
    PORTER’S COMPETITIVE STRATEGIES

    ■■ Cost leadership is the ability of a company or a business unit


    to design, produce, and market a comparable product or
    service more efficiently than its competitors.

    Photo source: https://mktoolboxsuite.com/cost-leadership-examples/


    Image source: https://www.amazon.com/BIC-Round-Ballpoint-Medium-60-Count/dp/B001Q4HUNO
    ■■ Differentiation is the ability of a company to provide
    unique and superior value to the buyer. This may include
    areas such as product quality, special features, or after sale
    service.

    Photo source: https://asiatimes.com/2020/03/emirates-to-ground-fleet-amid-covid-19-


    Photo source: https://mktoolboxsuite.com/differentiation-strategy-examples/
    outbreak/
    ■■ Focus is the ability of a company to provide unique and
    superior value to a particular buyer group, segment of the
    market line, or geographic market.

    Photo source: https://slice.seriouseats.com/2012/10/a-pizza-my-mind-i-hate-papa-murphys- photo source: https://www.naturesbasket.co.in/Products/Diet-Coke---Coca-


    take-n-bake.html Cola/6863_0_0_0
    Image source:
    https://www.peakpx.com/en/search?q=rolls+royce+logo Image source: https://www.watchesofswitzerland.com/c/Brands/Omega Image source: https://www.tbvsc.com/la-vallee-village/en/brands/prada
    Image source: https://www.retailtouchpoints.com/features/retail-movers-and-shakers/claire-s-stores-names-party-city-president-as-new-ceo
    STRATEGIC ALLIANCES

    A strategic alliance is a
    long-term cooperative
    arrangement between
    two or more independent
    firms or business units that
    engage in business
    activities for mutual
    economic gain. Photo source: https://cio-wiki.org/wiki/Strategic_Alliance
    Photo source:
    Photo source: https://www.touretown.com/listing/barnes-%26-noble-cafe/32/ https://stores.barnesandnoble.com/store/2159?view=list&month=Month&day=Day&typ
    e=SP
    Image source:: https://www.miamilakesautomall.com/chevy-blog/chevrolet-invites-the-magic-in-as-they-team-up-with-disney-world/
    Image source: https://eu.louisvuitton.com/eng-e1/articles/louis-vuitton-bmw-i-partner-to-create-luggage-of-the-future
    Companies or business units may form a
    strategic alliance for a number of reasons,
    including:
    1.To obtain or learn new capabilities
    2.To obtain access to specific markets
    3.To reduce financial risk
    4.To reduce political risk
    Continuum of Strategic Alliances
    Mutual Service Consortia. A mutual service consortium is a
    partnership of similar companies in similar industries that
    pool their resources to gain a benefit that is too expensive
    to develop alone, such as access to advanced technology.

    Photo source: https://ophtek.com/ibm-ships-malware- Photo source:


    infected-usb-drives-mistake/ Photo source: https://www.forbes.com/companies/siemens/?s
    https://ie.dynabook.com/press/releases/e-generation/ h=7f81e421f654
    Joint Venture. A joint venture is a “cooperative
    business activity, formed by two or more separate
    organizations for strategic purposes, that creates an
    independent business entity and allocates ownership,
    operational responsibilities, and financial risks and
    rewards to each member, while preserving their
    separate identity/autonomy.”
    Photo source: https://www.tonyrobbins.com/business/what-is-a-joint-venture/
    Photo source: https://www.verusglobal.com/project/joint-venture-success/
    Licensing Arrangements. A licensing arrangement is an
    agreement in which the licensing firm grants rights to
    another firm in another country or market to produce
    and/or sell a product.

    Photo source: https://www.mysmartchoice.org/yum-brand-is-going-to-invest-100-million-to-fight-inequality/


    Source: https://www.nestleusa.com/media/pressreleases/nestle-starbucks-close-agreement-perpetual-global-license-consumer-packaged-goods-foodservice
    Value-Chain Partnerships. A value-chain
    partnership is a strong and close alliance in
    which one company or unit forms a long-
    term arrangement with a key supplier or
    distributor for mutual advantage.
    REFERENCES:

    Wheelen, T.L., Hunger, J.D., Hoffman, A.N., & Bamford, C.E. (2018). Strategic
    management and business policy globalization, innovation and
    sustainability. Pearson Education Limited.

    International Institute for Management Development.(2021).


    What is business strategy?
    https://www.imd.org/imd-reflections/reflection-page/business-strategy/

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