As a business advisor to business and organisations across the United Kingdom I have been asked to provide key theories that define business strategy.
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HND Year 2 Business Strategy To: Lecturer David Walsh From: Asad Iqbal Date: 9th March 2005 Subject: Theories of Business Strategy Introduction As a business advisor to business and organisations across the United Kingdom I have been asked to provide key theories that define business strategy. Main Body 1. The Definitions Of Business Strategy There are many definitions to strategy below are some of them George Steiner, a professor of management says * Strategy is that which top management does that is of great importance to the organization. * Strategy refers to basic directional decisions, that is, to purposes and missions. * Strategy consists of the important actions necessary to realize these directions. * Strategy answers the question: What should the organization be doing? * Strategy answers the question: What are the ends we seek and how should we achieve them? B.H. Liddell Hart states the definitions of strategy is "the art of the employment of battles as a means to gain the object of war" Henry Mintzberg, in his 1994 book, The Rise and Fall of Strategic Planning , points out that people use "strategy" in several different ways, the most common being these four: * Strategy is a plan, a "how," a means of getting from here to there. * Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a "high end" strategy. * Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets. * Strategy is perspective, that is, vision and direction. Strategy According to Michael Porter In a 1996 Harvard Business Review article  and in an earlier book , Porter argues that competitive strategy is "about being different." He adds, "It means deliberately choosing a different set of activities to deliver a unique mix of value." In short, Porter argues that strategy is about competitive position, about differentiating yourself in the eyes of the customer, about adding value through a mix of activities different from those used by competitors. ...read more.
* International markets - overseas buyers including any of the above categories. 4. Competitors For Superdrug to be successful they need to satisfy consumer's needs and wants better than their competitors. Therefore it is important to monitor the trends and behaviour of your competitors. Identifying customers' perceptions of your competitors and their strengths and weaknesses is important. 5. The organisation's publics A public is any group that has an actual or potential interest in, or impact on, Superdrugs ability to achieve its objectives. These could be financial, media, government, and citizen-action, local, general or internal publics. Increased attention from these groups may require you to make changes in your marketing strategy. Source: Kotler, Adam, Brown and Armstrong (2003). Principles of marketing, 2nd Edition, Prentice-Hall In the SWOT we mentioned then Strength, Weaknesses, Opportunities, and Threats of Superdrug: Strengths - * Superdrug have loyalty scheme * Superdrug only leading specialise in body care products * Superdrug is the best known retail name in the UK * Superdrug is a market leaders * Superdrug are more competitive in price * Superdrug operates over 700 stores in high street and shopping mall locations throughout the UK. Weaknesses- * Undifferentiated Products or services (i.e. in relation to your competitors) * High price needed * High cost structure or high expenditure * Too many brands, * Too much competitors * Low budget Opportunities * Lower cost * Cheaper workforce * Larger market * A developing market * Takeovers Mergers, joint ventures or strategic alliances * Moving into new market segments that offer improved profits * Customer needs not fully fulfilled Threats * National laws and directives * Competition from existing/new competitors * The cost of developing R&D against other competitors * EU laws * Competitors have more access to channels of distribution * New regulations In the PESTEL analysis or ENVIRONMENTAL AUDIT /Macro-environment which consisted of Political, Economical, Social, Technological, Environmental, Legal. ...read more.
Below are several factors that cause implementation problems 1. Plans are made by those who do not have a thorough understanding of the difficulties that those responsible for the implementation of the plan will face. 2. The performance of those who implement plans is often considered in terms of short term success (rather than long term goals). 3. New plans may be met with disbelief. Staff may resist adopting new plans when they believe that the 'old way of doing things' was comfortable and acceptable. (like the adoption of mobile phones in the early days i.e. introduction of the product) 4. The plan may not provide details of how to achieve the goals of the plan. Time tables must be developed and individuals must feel responsible for exact tasks as well as being given the training required to undertake the tasks. 5. The plan may be too pushy and it may be too difficult to achieve the goals as set out. Many people designing plans do not want to accept reality if it is not constructive and/or does not support their case. Strategic Implementation Control Procedures Strategic Implementation Control the process of measuring and evaluating the results of business strategies and plans and, if needed, taking corrective action to ensure that strategic objectives are attained. There are three types of strategic control: Annual plan control - ensures that Superdrug PLC achieves the sales, profits and other goals set out in its annual plan. This can be controlled through sales analysis, market share analysis, expense-to-sales analysis and customer attitude tracking. (Through the clubcards) Profitability control - measures the profitability of various products, fields, customer groups, channels and order sizes. This enables Superdrug PLC to decide which of its products and practices should be given increased resources and which should be downsized. Strategic control - critically reviews the overall effectiveness of Superdrugs PLC business strategies and programs. This is usually done through a marketing audit which is performed by an independent auditor and comprehensively examines all the major strategic areas in a business. ...read more.
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