The Overall Business Strategy

Jul 23, 2012

The Overall Business Strategy

The overall business strategy is the means to achieve the overall objective of a long-term, future direction of development and general approach. It is to coordinate sub-strategy global guiding framework, the top management guidance and control of enterprises behavior, Program of Action.

Types of Business Strategy

The overall business strategy includes the following:

1. An operating range of choice
2. The specific advantage of the services for the business scope
3. Strategic passage of time and the possible strategies
4. Pursuit of the target results

The overall business strategy in general can be divided into:

1. Defensive Strategy
2. Hybrid Strategy
3. Offensive Strategy
4. Stable Strategy
5. Growth Strategy
6. Constricted Strategy

There are many types of strategic corporate strategic management to choose from, not only because of the different perspective of business decision-makers, but also because companies have different levels, different intrinsic characteristics and external environment, under different conditions.

Strategic Enterprise Management Course

Course description:

In today?s world, rapid development of the economic globalization, domestic and international political economy, highlights a new trend. How should enterprises deal with the current financial crisis and the change in situation of the stock and property markets? Where are the opportunities of the post-Olympic era? Managers must think ahead of the social cognitive and social development in order to grow.

How should companies meet market competition in order to effortlessly handle business management? The situation calls for the industry elites to transform and enrich their thinking in order to adapt to the unprecedented challenges.

Main elements:

1. Mental models of two managers

Managers? mental models affect different types of strategic decisions that determine the performance of the company.

2. Thinking, action, habits and character
3. Competitive Advantage and Core Competitiveness

Competitive advantage is a series of elements or abilities that make the company have better performance than their competitors.

Core competitiveness is valuable, rare, irreplaceable, and difficult to imitate.

4. Accomplish Strategic Planning Under Existing Circumstances

In the face of today?s volatile economic environment, the use of a variety of analytical tools to solve the problem is an important factor of corporate strategic planning.

5. Competitive Strategy Options

Learn from success and failure of the Chinese and foreign enterprises through strategic case, a clear strategic significance, and a strategic management model applicable to the development of enterprises.

6. Plan Diversification Strategy of Enterprises

Professor Lai Weimin is a famous economist and research director of the Center for Enterprise Business School, Peking University. He is known for his work on the ?Enterprise Strategy Group Leader, China Enterprise Confederation? which he shared with distinguished experts and visiting professor at Tsinghua University. In recent years he has been committed to research and practice in the field of economic management, and participation in the GSP system development, ?Dynamic Economic Models?, ?pharmaceutical version of the ERP development? and a number of provincial and national projects. The recently published ?Pudong Airport and how is it?, shows a post-crisis era of opportunities and strategic options.

Professor Lai Weimin served as a management consultant of many companies; the actual surgeon of corporate strategic planning, marketing planning and institution building. He combines innovative theoretical thinking and practical application with complete metamorphosis management ideas from the abstract to the concrete, from theory to practice.

The Overall Business Strategy Planning

The overall business strategy planning has four steps:

1. Understanding and defining the corporate mission
2. The distinction between strategic business units
3. Analysis of the existing business portfolio and deciding on investment strategies
4. Choosing to enter the new business growth strategy

Clear Corporate Mission

Clear corporate mission is ?what this business is doing and accomplishing?

The following reference factors define corporate mission:

1. History and culture
2. The intentions and ideas of the owners and managers
3. Development and changes of the environment
4. Resources
5. Core competencies and strengths

In order to write a corporate mission statement, companies must consider the following factors:

I. ?Specify areas of activity of the enterprise

1. Product range

2. The scope of the market

3. The longitudinal extent of the geographical scope

II. Main policy

The main policy serves as a guide for employees on how to treat customers, suppliers, distributors, competitors and the general public. It is a common standard used as a reference for the purpose of having various components of the total enterprise acting in unison on the major issues or principles.

III. Corporate vision and direction of development

This provides distinction between strategic business units.

Basic characteristics of the strategic business units:

1. Have their own business
2. Common properties and phase requirements
3. Acquire a certain amount of resources
4. Its competitors

The common operating main line is an intrinsic link between the current product, market and future products. Its purpose for the enterprise is for the effective administration of the business strategy of the management team personnel. This is to distinguish between the main bases of the strategic business unit.

The purpose of the corporate mission and decomposition strategy for the business or a business task is to distinguish different strategic business units. It focuses on the following aspects:

1. Market-oriented vs. product-oriented
2. Practical but has limited coverage to maintain the common main line of business
3. The planning portfolio strategy

The Boston Consulting Group, France (Market Growth ? Market Share Matrix)

Star class:

High market growth and relatively high market share of units, due to rapid development; businesses must invest heavily to support its progress.

Taurus class:

Market growth is low with a relatively high market share. The business can provide more cash or use the support and development of other businesses.

The Problem Class:

High market growth rate with a relatively low market share. ?Companies face an uncertain future; it may be a short time to market business.

Skinny Dog Class:

Low market growth and relatively low market share. The business should no longer be involved.

The four categories of business may be subject to change. ?Based on the above data, the strategy to choose should include:

Expansion strategy ? Star Class

Maintenance strategy ? Taurus Class

Harvesting strategies ? Taurus class business prospects, but applied to Skinny Dog Class, and Problem Class

General Electric Company Law

Analytical methods are provided by the General Electric Company called ? strategic business planning grid, also referred to as ?GE?. In the assessment of businesses, the following factors should be considered:

1. Industry attractiveness
2. The business unit?s business strength and competitiveness

Industry attractiveness depends on the following factors:

• The size of the market
• Market growth
• Margin
• Degree of competitive
• Periodicity
• Seasonal

Expansion of the industry is attractive with economies of scale and units undergoing product cost reduction with its manufacturing and distribution. The learning curve of the unit product cost is possible with the growth of management experience.

A business is subject to the following factors:

1. Relative market share
2. Price competitiveness
3. Product quality
4. Degree of Customer Understanding
5. Marketing efficiency
6. Geographical Advantages

Planning the company?s growth strategy

The investment strategy determines which business units to develop and expand, and which to harvest, and to abandon.

New business systems thinking:

1. Look for development opportunities in existing business within
2. Analyze the possibility of establishing and engaging in some new target business
3. Consider that development has nothing to do with the current business, instead look at new, strong and attractive business opportunities

Three Growth Strategies

Intensive Growth Strategy:

Existing products and existing markets with potential profit can be used. It mainly includes three forms:

1. The market penetration strategy, through a variety of marketing initiatives aimed to attract customers, increase sales of existing products in existing markets.
2. Advertise development strategies to the existing products into new markets
3. Implement a development strategy in present markets by improving existing products, or by adding new products for increased sales

Integration of Growth Strategies:

Enterprise industry?s attractiveness and growth potential can be used in mainly three forms:

1. The Backward Integration Strategy give manufacturers back the control of the supplier for the integration of supply and production, in order to achieve production combination
2. Forward Integration Strategy gives control of the distribution system to the enterprise in order to achieve sales combination
3. Horizontal Integration Strategy merge similar products of competitors with the enterprise

The above three forms can be implemented in the same company.

Multi-Angle Growth Strategy:

Diversification outside the industry, develop and expand their business scope to achieve cross-industry trade. There are three main forms:

1. Concentric Diversification Strategy to existing products as the center outward expansion of business scope, leveraging their existing technology and power, for the development of new products similar to existing products.
2. Horizontal Diversification Strategy for the stability of existing customers, and developing existing products not related to new products.
3. Existing Product Diversification Strategy develop technology-independent new products to attract new customers.

Source: http://www.luchzanirato.com/the-overall-business-strategy/

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