To build a robust business strategy, organizations all must conduct strategy development beginning with a agreed upon set of beliefs around its current situation and existing strategic challenges. The next steps, on a high level, include defining what the future vision of the company is and then going into the details of strategically planning how to get to that state. In order to understand your strategic challenges, you must begin with a comprehensive current state understanding of your situation. It is also important to realize that there is more to strategy than just winning. Strategy is about value innovation, strategy is about competitive selection, and strategy is about speed to market.
Business strategy includes the areas of growth strategy, marketing and brand strategy, sales strategy, as well other areas of strategic thinking. Sales strategy includes distribution strategy, indirect sales strategy, and business development. Marketing strategy includes branding strategy, product launch strategy, and Internet strategy. Business strategy development is many times done within an annual strategic planning session or workshop, typically conducted in a 2 day remote conference space with executives and key personnel, both within and external to the organization. When we speak about growth strategy, we include both organic growth and inorganic growth, namely mergers and acquisitions. Marketing strategy and sales strategy are usually coupled together, but are completely different in nature.
The strategic thinking of modern business organizations has been shaped by military strategists since the beginning of organized warfare. Sun Tzu preached to know and attack the enemys strategy. In Sun Tzus Art of War, he wrote about five core factors in military strategy and each of these factors can be directly translated to terms of business strategy. Sun Tzus teachings around the factor of land, if we were to take that into the context of companies competing today, translates to markets, industry structures, market positions, and competitive forces. Sun Tzu hinted at indirect business strategies when he said winning without fighting is the highest of skill on the battlefield.
Today, there are two primary schools of thought around strategic management. Mintzberg also advocates a transformation of business processes, where management recognizes the need and has the ability to manage complete business operations transformation. Mintzberg opts for an organization, bottom-ups approach to drive the strategy development process that adheres to organizational configuration. In organizational configuration, the organization takes on behaviors based on adoption to business surroundings.
Strategy development has evolved through 5 key phases over the years. A lot of growth strategy is also hinged on ideas in the 1970s, where the core theme was around thinking strategically to beat competition and the business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix were actively used for the first time. Today, the strategic development theme is on integrating strategic planning and execution with a stress on the primary notions of core competencies, strategy planning and execution, and balance scorecard analysis. Strategy development started with a focus on financial planning in the 1950s, moving to long-term planning in the 1960s, to strategic planning in the 1970s and eventually to a focus on strategic management in the present day. Shifts in strategic mindset represent an ever evolving, new thought leaders, and emergence of disruptive technologies and trends.
Joseph Bower believes that the strategic planning and budgeting process is at the heart of the strategy development process. Organizational context is made up of governance and the org structure, basis of performance measures and rewards, and the managers core beliefs and strategic frames. In the Resource Allocation business framework, when market context is discussed, we are analyzing the demands of the existing customers,and technological development. Bower defines strategic intent as the externally observed and communicated official strategy. Bowers set of beliefs is called the Resource Allocation Process RAP framework. Resource allocation based strategy planning and budgeting is a bottoms up driven way to identifying and picking of important business priorities. Capital market context is also analyzed, which is defined as demands and influences of capital providers, including investors.
Strategy Development
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