[Link]
uk
Business Strategy
by
Prof. B. Manchanda
Copyright 2007 – Biz/ed
[Link]
Business Strategy
Copyright 2007 – Biz/ed
[Link]
Strategic Analysis
Copyright 2007 – Biz/ed
[Link]
Strategic Analysis
• Most businesses will constantly evaluate
their position
• Strategic analysis includes different
methods of assessing
the current position of the business
in the market place
• Two basic methods:
– Internal
– External
Copyright 2007 – Biz/ed
[Link]
Where Is The Business Now?
• Internal Audits – uses data and information
generated from within the business
Internal audits may be carried out through
recruitment of an outside consultant to look at
how the business works and offer an
‘independent’ viewpoint
• External Audits – uses information and data
from outside the business – such information
may be outside of the business’s control but
has to be factored into decision making
Copyright 2007 – Biz/ed
[Link]
Internal Audits
• Productivity – Human resources/capital
• Efficiency – Using ratio analysis, investment data, etc.
• Costs – Wastage? Unnecessary expense, cost cutting opportunities?
• Internal Data
– Labour turnover, absenteeism
– Customer satisfaction surveys
– Quality procedures – defects, complaints, etc.
– Cash flow statements – record what is actually happening
– Sales trends – generate patterns
– Skills audit – do the skills in existence match those required?
• SWOT analysis – Strengths and weaknesses can be viewed as
internal aspects
• Core competencies – What is the business good at and recognised
for?
Copyright 2007 – Biz/ed
[Link]
External Audits
• General business environment – Inflation,
competitiveness, unemployment/employment, growth,
consumer spending
• Competitors – What are they doing?
What threats do they provide?
• PEST factors
– Political – e.g. change of government not only
in domestic country but in overseas markets
– Economic – potential trends in economic growth,
inflation, etc.
– Social – changing nature of social issues – environment,
ethical expectations, changed outlook, age structure
of population, etc.
– Technological – rapid changes – firm gets left behind?
Copyright 2007 – Biz/ed
[Link]
External Audits
• The Market
– Size – growing, stagnant
or shrinking?
– Share – rising, stable
or falling?
– Growth – possible
or at the maturity stage?
– Trends – changing fashions,
new market opportunities
– Changes – new situations that
may fundamentally change
the market, e.g. technology
– Mix – 7 Ps
• Boston Matrix – analysis
Keeping up with the Jones’s – an important part of of products
strategic analysis is knowing what your • Product Portfolio Analysis –
competitors are doing. Microsoft will be as keen to different stages of life cycle?
know what Apple are doing as Apple will be to
– Gaps – where there might exist
know what Microsoft are doing!
a market that is not being
Copyright: KayPat, [Link] catered for
Copyright 2007 – Biz/ed
[Link]
Strategic Planning
Copyright 2007 – Biz/ed
[Link]
Where Will The Business Go
In The Next Ten Years?
• How far can the business
plan ahead?
• How valuable are such plans?
• Strategic intent – provides
an outline framework of basic
principles and targets
to inform operational planning
Copyright 2007 – Biz/ed
[Link]
Strategic Planning
• Competitive Advantage –seeking to identify
sources of competitive advantage
• Adding Value – looking at ways to add value
• Mass or niche markets? – which is the best
route?
• Cost based strategies – focus on reducing
costs to compete and grow
• Market based strategies – focus on
satisfying consumer needs as the means
to growth
Copyright 2007 – Biz/ed
[Link]
Strategic Planning
• Contingency Plan –
fallback strategies in
case things do not go
as planned
• Growth Plans – how
can the business grow
in the future? e.g.
Tesco may have now
got to the stage where
Reliance’s growth in recent years has been
it is more difficult to
phenomenal both in India and abroad. Reliance see where future
Fresh has expanded into new markets, built dozens
of new stores and moved into mini-supermarkets but growth is coming from
where does it go from here?
Copyright 2007 – Biz/ed
