Strategy development has evolved through 5 key phases since the early 1900s. Business strategy development started with a focus on financial planning in the 1950s, moving to sustainable business planning in the 1960s, to strategic planning in the 1970s and eventually to a focus on strategic management in the present day. Today, the strategic development theme is on integrating strategic planning and implementation with a stress on the key concepts of core competencies, strategy planning and execution, and balance scorecard analysis. Shifts in strategic mindset represent a changing landscape, new business leaders, and emergence of disruptive technologies and changes. Much of corporate strategy is also hinged on ideas in the 1970s, where the focus of what business leaders devote their efforts to was around thinking strategically to out maneuver competition and the business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix emerged.
To build a robust corporate strategy, organizations all must perform strategy development that starts with a collective understanding of its business positioning and existing strategic barriers to growth. The next steps, on a high level, include defining what the future vision of the company is and then going into the details of planning how to achieve that state. In order to understand your strategic challenges, you must begin with a complete, end-to-end 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 focus, and strategy is about business agility.
Bower emphasizes the strategic planning and financial budgeting processes are in the focus of strategy development. Capital market context is also looked at, which is defined as demands and influence of providers, such as hedge funds. Bowers school of thought is called the Resource Allocation Process RAP framework. RAP based strategy planning and budgeting is a bottoms up approach to locating and selection of core business priorities. Organizational context is made up of organizational governance and the org structure, basis of performance metrics and incentives, and managements beliefs and strategic mindset. Within the RAP framework, when we look at market context, we are evaluating the demands of those customers that make up the major sources of revenue, as well as technology development. Strategic intent is defined as the externally observed and communicated corporate strategy.
Business strategy includes the topics 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 and sales strategy are usually coupled together, but are completely different in nature. Within growth strategy, we include both normal business growth and inorganic growth, namely mergers and acquisitions. Marketing strategy includes branding strategy, product launch strategy, and Internet strategy. Business strategy development is often conducted during a yearly strategic planning session or workshop, typically conducted in a 2 day off site location with management and key stakeholders, both within and outside the business.
Today, there are two primary schools of thought around strategic management. Henry Mintberg also advocates a transformation of business practices, where management recognizes the need and has the ability to conduct complete business operations transformation. In organizational configuration, the organization engages in behaviors based on adaptation to contexts. Henry Mintzberg proposes for an organization, bottom-ups approach to drive the strategy development process that hinges upon organizational configuration.
The way business leaders evaluate and analyze strategy within that of modern business organizations has been shaped by military strategists since 400BC when Sun Tzu wrote the Art of War. Sun Tzu hinted at indirect strategies when he said winning without fighting is the pinnacle of skill on the battlefield. Sun Tzu wrote the Art of War, which has been adopted into a business strategy book. In Sun Tzus Art of War, he spoke about five fundamental factors in military strategy and each of these factors relates to a popular concept of business strategy. Sun Tzus thoughts around the factor of terrain, if we were to take that into the context of companies competing today, translates to markets, industry structures, market positions, and Porters Five Forces.
Strategy Development
Source: http://blasite.com/2011/09/bain-lessons-strategy-development-without-a-competitive-advantage/
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