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Business Strategy - PowerPoint PPT Presentation


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Business Strategy. Business Strategy. Strategic Analysis. Strategic Analysis. Most businesses will constantly evaluate their position Strategic analysis includes different methods of assessing the current position of the business in the market place Two basic methods: Internal External.

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Presentation Transcript
strategic analysis4
Strategic Analysis
  • Most businesses will constantly evaluate their position
  • Strategic analysis includes different methods of assessing the current position of the business in the market place
  • Two basic methods:
    • Internal
    • External
where is the business now
Where Is The Business Now?
  • Internal Audits – uses data and information generated from within the business

Internal audits may be carried out through recruitment of an outside consultant to look at how the business works and offer an ‘independent’ viewpoint

  • External Audits – uses information and data from outside the business – such information may be outside of the business’s control but has to be factored into decision making
internal audits
Internal Audits
  • Productivity – Human resources/capital
  • Efficiency – Using ratio analysis, investment data, etc.
  • Costs – Wastage? Unnecessary expense, cost cutting opportunities?
  • Internal Data
    • Labour turnover, absenteeism
    • Customer satisfaction surveys
    • Quality procedures – defects, complaints, etc.
    • Cash flow statements – record what is actually happening
    • Sales trends – generate patterns
    • Skills audit – do the skills in existence match those required?
  • SWOT analysis – Strengths and weaknesses can be viewed as internal aspects
  • Core competencies – What is the business good at and recognised for?
external audits
External Audits
  • General business environment – Inflation, competitiveness, unemployment/employment, growth, consumer spending
  • Competitors – What are they doing? What threats do they provide?
  • PEST factors
    • Political – e.g. change of government not only in domestic country but in overseas markets
    • Economic – potential trends in economic growth, inflation, etc.
    • Social – changing nature of social issues – environment, ethical expectations, changed outlook, age structure of population, etc.
    • Technological – rapid changes – firm gets left behind?
external audits8
External Audits
  • The Market
    • Size – growing, stagnantor shrinking?
    • Share – rising, stable or falling?
    • Growth – possible or at the maturity stage?
    • Trends – changing fashions, new market opportunities
    • Changes – new situations that may fundamentally change the market, e.g. technology
    • Mix – 7 Ps
      • Boston Matrix – analysis of products
      • Product Portfolio Analysis – different stages of life cycle?
    • Gaps – where there might exist a market that is not being catered for

Keeping up with the Jones’s – an important part of strategic analysis is knowing what your competitors are doing. Microsoft will be as keen to know what Apple are doing as Apple will be to know what Microsoft are doing!

Copyright: KayPat, http://www.sxc.hu

where will the business go in the next ten years
Where Will The Business Go In The Next Ten Years?
  • How far can the business plan ahead?
  • How valuable are such plans?
  • Strategic intent – provides an outline framework of basic principles and targets to inform operational planning
strategic planning11
Strategic Planning
  • Competitive Advantage –seeking to identify sources of competitive advantage
  • Adding Value – looking at ways to add value
  • Mass or niche markets? – which is the best route?
  • Cost based strategies – focus on reducing costs to compete and grow
  • Market based strategies – focus on satisfying consumer needs as the means to growth
strategic planning12
Strategic Planning
  • Contingency Plan – fallback strategies in case things do not go as planned
  • Growth Plans – how can the business grow in the future? e.g. Tesco may have now got to the stage where it is more difficult to see where future growth is coming from

Tesco’s growth in recent years has been phenomenal both in the UK and abroad. It has expanded into new markets, built dozens of new stores and moved into mini-supermarkets but where does it go from here?

Copyright: Mammuth, http://www.sxc.hu