Understanding Business Strategy

• Strategy is a plan to achieve a desired future state or solve a problem.
• Strategy involves actions to meet objectives for a sustainable competitive edge.

Key Characteristics of Strategy

• Requires significant, often irreversible resource allocation.
• Defines a company's overall direction and viability.
• Helps shape goals and set operational boundaries.
• Addresses uncertainty, risk, and unpredictability.
• Needs creativity, initiative, and critical thinking.

Strategic Management

• Defining objectives, analyzing the environment and executing strategies all falls under strategic management.
• Strategic management aims to improve competitiveness and lower long-term risks.

Importance of Strategic Planning

• Provides consistency in a company's operations.
• Encourages a proactive management style.
• Clarifies the vision and objectives for the business.
• Identifies and minimizes potential risks and maximizes opportunities.

Limitations of Strategic Planning

• Plans can quickly become obsolete because of changing conditions.
• Plans may struggle with uncertainty, and unpredictability..
• Demands adaptability and creativity.

Strategic Management Process

• Involves analysis of internal and external environments.
• Requires strategy formulation by setting goals and action plans.
• Involves implementing the strategy by allocating resources.
• Evaluation of strategy includes monitoring and adjustments.

Benefits of Strategic Management

• Improves an organization's long-term competitiveness.
• Lowers business and financial risks.
• increases ability to make lasting profits.
• Increase strategic and operational flexibility.
• Consistency of action and proactive management fall under strategic management.
• Problem identification and awareness to changes play crucial roles.
• Aims for competitive advantage through integrated and systemic approaches.
• Data is identified and evaluated, to achieve enhanced performance.

Strategy Evolution

• Strategy should evolve due to changing markets, technologies, and competitors.
• Static strategies may not adapt to threats and new opportunities.
• Companies must adapt their strategies to stay competitive.
• Tesla adapts to new competitors and changing customer preferences.
• The business environment has complexity, dynamic change, and unpredictability.
• It is crucial to stay ahead of trends and customer expectations.
• Economic conditions change, so strategic objectives and approaches must change.
• Adapt to ensure business survival and competitive edge.
• Regularly monitoring for potential problems and making timely adjustments are important.

Mission

• Answers what the company does and why it exists.
• Mission Statement explains the organization’s activities.
  • What the business will do?
  • With whom it wants to be compared?
• “Bringing the best user experience through innovative products” is an example for Apple
• Coca-Cola’s mission aims to inspire moments of optimism by making a difference everywhere.

Vision

• Describes the company's desired future state and aspirations.
• Encompasses the company's goals.
  • “Where would we like to see us”
• Vision is built upon the market, customers, and environmental conditions.
• Achievability relies on developing the resources and skills to implement it.
• Product quality and consistency are essential.
• "To provide access to the world's information in one click" is the mission statement of Google.

Values

• Values entails the ethical standards and norms that guide behavior.
• Companies can use functional, emotional, or self-expression values.
• "Respect, Integrity, Accountability" is used as the values for Microsoft
• Important modern market values consists of wellbeing, sustainability, and social responsibility.
• A strategic basis for planning and decision-making is the values and mission.

External Environment

• Political, economic, social, technological, environmental, and legal factors (PESTEL) make up the external environment.
• Regulations, consumer behavior, and competitor's strategies require ongoing strategic modification​.
• The external environment poses challenges for survival/growth.
• The rise of electric vehicles affects oil demand, as an example.

PESTEL

• PESTEL offers a basis for competitive analysis.
• The environmental factors that affect profitability are examined.

Strategic Groups

• In strategic groups, the members of the group all use similar key strategies.
• Most industries are made up of strategic groups

Environmental Evolution and Alternative Scenarios

• Organizations have to be ready and create plans for change.
• Possible opportunities and threats can be identified through preparation and planning. Creating alternative scenarios is is critical to robust strategic planning.
• In scenario planning, possible future states are developed.
• Exploring potential results in ways that are not immediately obvious may foster opportunities.
• Timely change, as well as less drastic change, need to be anticipated

Industry Life Cycle

• The industry life cycle is the stages of market penetration.
• The stages are product development, and introduction.
• Building marketplace share is crucial for Growth.
• Efficiency must be maximized and defended the market position for Maturity stage.
• Managing cost falls under Decline stage.
• Each stage has various competitive environments.
• Primary strategic goals vary among stages.
• The cost and income structure will change among the stages
• Each phase will affect how the marketing program adapts.

Strategy Among The Competitive

• Competitive dynamics require the analysis of industry structure.
• Recognizing the forces that affect profitability will improve possible strategies.

Sustainable Competitive Advantage

• Outperforming the competitors requires a sustainable competitive advantage.
• Organized resources are vital for having a valuable (VRIO) framework.
• To perform at a higher level than competitors, resources, and capabilities are critical.
• The VRIO framework lists how resources and skills will lead to competitive advantage.
• Being valuable, rare, inimitable, and organized to capture value are the overall goals.

SWOT

• Strengths, weaknesses, opportunities and threats are all components of planning using SWOT.
• Strengths include internal qualities which enhance competitiveness.
• Weaknesses include limitations which reduce competitiveness.
• Opportunities involves external factors the organization can capitalize on.
• Threats are exterior challenges that can harm the organization.
• Example: Apple's SWOT includes a strength in brand loyalty, and a weakness in high production costs.
• External analysis gives way for potential opportunities and threats.
• SWOT builds strategic scenarios, identifies strategic gaps, and implements strategies.

SWOT Synthesis

• Synthesizing insights involves the internal analysis.
• Analysis of external opportunities are useful for insights.