PHAR 4105 Community Pharmacy Practice: Business Strategy

Strategy Formulation and Implementation

• Business strategy is a general direction set for the company and its components to achieve a desired state in the future.

Purpose of Business Strategy

• Achieving effectiveness and meeting challenges and threats
• Perceiving and utilizing opportunities
• Mobilizing resources and securing an advantageous position
• Directing efforts and gaining command over the situation

Strategic Management

• The process of evaluation, planning, and implementation to maintain or improve competitive advantage
• Evaluating external and internal environments
• Developing business models, corporate direction, competitive tactics, and international strategy
• Implementing requires leadership to build the organizational structure, develop management culture, control strategic processes, and steer the organization through corporate governance

Strategic Management Process

• Environmental scanning to collect information for strategic purposes
• SWOT analysis to identify strengths, weaknesses, opportunities, and threats
• PEST analysis to identify external factors affecting the organization

Strategy Formation

• Choosing the most appropriate course of action for realizing organizational goals and objectives
• Examining resources, providing a financial plan, and establishing an action plan to increase profits

Mission and Vision

• Mission: the organization's business, objectives, and how to achieve them
• Vision: where the organization aspires to go and how it will reach its objectives

Steps of Strategy Formation

• Factors affecting organizational goals, strengths, and limitations
• External opportunities and threats

Levels of Strategy

• Corporate Level: long-range, action-oriented, integrated, and comprehensive plan
• Business Level: relates to a particular business and developed by general managers
• Functional Level Strategy: involves decision-making at the operational level concerning specific functional areas

Corporate Level Strategies

• Stability: keeping operations within normal parameters to increase profit and minimize risk
• Expansion: expanding the company's business operations to achieve long-term goals
• Retrenchment: reducing the size and scope of the company's operations to cut costs and improve efficiency
• Combination: simultaneously implementing two or more strategies

Porter's Five Forces

• A model that identifies and analyzes five competitive forces that shape every industry
• Helps determine an industry's weaknesses and strengths

Business Level Strategies

• Depends on the organization's mission and vision

Strategy Implementation

• The process of turning plans into action to reach a desired outcome
• Implementation is vital to success

Strategic Evaluation

• The process of assessing the effectiveness and efficiency of a strategic plan or initiative
• Set critical feedback mechanism to determine whether the strategy has achieved its intended objectives

Strategic vs Operational Decisions

• Strategic decisions are long-term, related to overall planning, and concern the organization's growth
• Operational decisions are short-term, based on daily needs, and related to production and factory growth
• Administrative decisions are medium-term, based on strategic and operational decisions, and concern the working of employees in an organization

Advantages of Strategic Management

• Provides a framework for decision-making
• Supports understanding and buy-in
• Provides an organizational perspective
• Enables measurement of progress

Disadvantages of Strategic Management

• Accurate anticipation of the future may be difficult
• Impedes flexibility
• Can be expensive
• Long-term benefit vs immediate results is difficult to balance

This quiz covers the basics of business strategy and strategic management, including the purpose of business strategy, steps in strategic management, and differentiating between strategic and operational decisions.