First, the nature and type of strategy
What is the strategy: business development plan
Three levels of corporate strategy:
- The company's overall strategy: also known as business strategy, is the guiding ideology of the overall operation of the business
- Business-level strategy: also known as competitive strategy, business level strategy, SBU strategy to guide specific strategic business units.
- Functional strategy: also known as functional departments strategy, strategic planning research and development, production, finance, labor and other sectors; short-term strategic planning department
Features Strategic Enterprise Management
- Integrity: the entire company
- Long-term: the long-term strategy
- Authority: the Executive Floor
- Environmental adaptability: the actual
Strategic management process
1, to determine the company's mission: to answer why the business exists and why competition
2, a clear corporate goals and objectives: enterprise-ready answer in the short term and in the long-term task to be accomplished
3, Enterprise Strategy Conditions: corporate strategic environment analysis, internal analysis conditions
4, the development of strategic plan
5, strategic OPTION: The Selection process between multiple programs
6, the implementation of the revised strategy: the strategy into action and correct
Second, corporate strategic environmental analysis
Business environment components:
- Micro-environment: their own, suppliers, customers, competitors, etc.
- Macro-environment: demographic environment, economic environment, the natural environment, political environment,
Industry environment determines the characteristics of enterprises to participate in the field of competition, development of the industry restricts the development of enterprises
Industry environmental analysis of contents:
- Characteristics of the industry - agriculture? industry?
- Life Cycle Industry - start? mature?
- The development of the industry - demands? policy?
- Competitive structure of the industry - customers? Peers?
Industry life cycle:
- In period (the introduction period, start-up): high risk, return negative, a small number of enterprises
- Growing: high risk, revenue growth, increase the number of firms
- Maturity: low risk, high return, the number of enterprises
- Recession: no risk, lower income, reducing the number of enterprises
Michael Porter's five forces of competition, said: potential entrants (threat of potential entrants), customers (customer bargaining power), suppliers (suppliers bargaining power), substitute (or the threat of substitute services) , the industry competitors.
Third, corporate resources and capacity analysis
Core Competency: to develop and cultivate core competence become the focus of the Strategic Enterprise Management
What are the core competencies : core competence is a unique enterprise to support the ability of long-term competitive advantage.
Core competence elements:
- Staff knowledge and skills
- Technical systems - Over the years, through technical knowledge gathered from the system
- Management systems - control systems use knowledge and creation of knowledge
- Values and code of conduct - is a form of corporate culture
Characteristics of core competence: heterogeneity, difficult imitation, dynamic, scalable, non-trading and valuable creativity
The core product is the carrier of core competence, core competence is the root; core product is the trunk; each strategic business unit (SBU) is a branch; the final product is the leaves
Source core competencies
- First, the company has the resources - tangible and intangible assets.
- Second, enterprises cohesive ability - coordination of resources and skills to create value
How to determine the value of corporate resources : scarcity, durability, substitutability
Fourth, the analysis and formulation of business strategy
The main contents and methods of strategic analysis
Market analysis perspective, competitive advantage, competitor analysis, industry analysis
******************** market analysis perspective ***************************
Market segmentation: Market segmentation, is an enterprise in accordance with (some) "variable segment" The whole market is subdivided into different sub-markets products and marketing mix of a number of needs, such as the male market, the white-collar market, first-tier cities, Technology enthusiasts
********************* Competitive Advantage **************************
Enterprise value activities can be divided into basic activities and support activities
Strategic choice: enterprise development strategy, stable strategy, crunch-type strategy, portfolio strategy
*********** developing enterprise strategy ********************
Focus on developmental strategy ( "dot" type of strategy): to concentrate all resources of the enterprise, faster than the growth rate of the past to increase sales of existing products or services, profit or market share.
Vertical integration strategy ( "line" type of strategy): to expand the company's existing operations in the two possible directions. Such as expanding manufacturers, retailers
Horizontal integration strategy ( "line" type of strategy): by purchase, merger or joint competitive relationship with their companies.
Concentric diversification strategy ( "face" type of strategy): to increase business with existing products or services similar to the new product or service
Composite diversification strategy ( "face" type of strategy): new products or services and increase the organization's existing product or services very different.
Boston matrix classification of strategic business units:
V. Analysis and Selection Competitive Strategy
Porter's three competitive strategy:
- The total cost leadership strategy: a low cost industry leading position in the
- Differentiation strategy: the company is unique in the industry
- Key strategy: a main market segments or a special product
******************** total cost leadership strategy ***********************
***************************** differentiation strategy ****************** *****************
****************************** key strategic ****************** *************
Main attack a particular market segment or a particular product. Applicable:
1, it has a completely different user groups, or those users have different needs, or use of the product in different ways.
2, in the same target market segments, the other competitors do not intend to focus on the implementation of the strategy.
3, the company's resources do not allow it to pursue a wide range of market segments.
4, various industry segments sectors are very different in terms of size, growth rate, profitability, and causes a breakdown of some sectors more attractive than other sectors.
For example, the United States Armstrong Rubber Company specializes in tourism concentrate on automotive and farm equipment with high-quality tires.
Value Innovation strategy logic: value innovation strategy is based on a strategic analysis of customer value
