Business strategy Strategy Strategies are medium to longterm

Business strategy

Strategy Strategies are medium to long-term plans for achieving business aims and objectives So. . . Aims/objectives identify where a business wants to be Strategies show it is going to get there

Strategy Strategies consider the: Financial requirements Operational requirements Human resources requirements for achieving the aims and objectives. The external environment must also be taken into account when developing strategies

Strategy at different levels Strategies can be developed for different levels within an organisation: Corporate – for the overall business Divisional – for each area of the business Functional – departmental strategies for success Individual – often identified and developed through an appraisal system

Devising business strategy When devising business strategy firms consider: The current situation – SWOT analysis is useful for this The competitive environment – Porter identified Five Forces for analysing this: Threat of new entrants Bargaining power of buyers Threat of substitutes Bargaining power of suppliers Rivalry among existing firms

Types of strategy Firms can adopt different types of strategy. According to Michael Porter, there are three generic competitive strategies Overall cost leadership - to maintain high returns Differentiation – to produce something unique in the market Focus – on one particular market segment or product