Business Tactics are specific operating plans which are part of and fit into the larger strategic plan. In warfare, tactics are plans made to fight and win battles. Strategy is the larger set of plans to win wars. Similarly business tactics can be viewed as short term plans to achieve smaller goals – also called targets- and are part of a larger strategic plan to achieve long term goals. A useful way of viewing tactics is to consider them as linking elements between strategy formulation and strategy implementation. There are two types of primary tactics viz. Timing Tactics and Market Location Tactics. Timing refers to the order in which a firm makes market moves in relation to its competitors. A firm may choose to be first in the market with a product or new features to an existing product. This is known as a first mover tactic. Usually a firm Continue reading
Strategic Management
Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually initiate by the board of directors and executed by the firm’s Chief Executive Officer (CEO) and executive team.
Advantages and Disadvantages of Mergers and Acquisitions
In 21st century businesses are the game of growth. Every business want the optimum market share (growth) over their competitors, so companies are trying to get optimum growth by using the most common shortcut i.e. Merger and Acquisition (M&A). The growth main motive is financial stability of a business and also the shareholders wealth maximization and main coalition’s personal motivations. Mergers and acquisitions (M&A) provides a business with a potentially bigger market share and it opens the business up to a more diversified market. In these days it is the most commonly use methods for the growth of companies. Merger and Acquisition (M&A) basically makes a business bigger, increase its production and gives it more financial strength to become stronger against their competitor on the same market. Mergers and acquisitions have obtained quality throughout the world within the current economic conditions attributable to globalization, advancements of new technology and augmented Continue reading
Business Growth Strategies
A growth strategy means increasing the level of the organization’s operations. This includes such popular measures as more revenues, more employees, and more of the market share. Growth can be achieved through direct expansion, a merger with similar firms, or diversification. Firms like Wal-Mart and McDonald’s have pursued a growth strategy by way of direct expansion. When Texaco absorbed Gulf Oil, it chose the merger route to growth. When Philip Morris bought General Foods, it was using diversification to achieve growth. Business growth strategies seek greater size and the expansion of current operations. Wal-Mart is pursuing a highly aggressive growth strategy. Its competitor, Target, is doing the same. These strategies are popular in part because growth is necessary for long-run survival in some industries. Many managers also equate growth with effectiveness, although this is not necessarily true. There are different ways to pursue growth. Some organizations try to grow internally Continue reading
Leveraged and Management Buyouts
There are various options available for the revival of a ‘sick company. One is buyout of such a company by its employees. This option has distinct advantages over Government intervention and other conventional remedies. Buyout by employees provides a strong incentive to the employees in the form of personal stake in the company. The employees become the owners of the company by virtue of the shares that are issued and allotted to them. Moreover, continuity of job is the greatest motivating force which keeps them on their toes to ensure that the buyout succeeds. Such a buyout saves mass unemployment and unrest among the working class. Relations between the worker management and the employees are expected to be cordial without any break, strike or other such disturbing developments. Hence chances of success are more. However, such a buyout can be successful only if necessary financial support is extended by the Continue reading
Value Net Framework
The Value Net Framework, also known as Coopetition Framework is an analytical strategy tool developed by Adam Brandenburger and Gary Nalebuff in 1996, combining strategy and game theory, in order to describe and analyze the behavior of multiple players within a given industry or market. The Value Net Framework is an alternative to Porter’s Five Forces framework, extends the five forces framework more general by examining the role of complementors. The frameworks fundamental idea is that cooperation and competition coexist. Cooperation and competition are both necessary and desirable when doing business. Cooperation is required to increase benefits to all players (focus on market growth), and competition is needed to divide the existing benefits among these players (focus on market share). Co-opetition Co-opetition is a neologism representing the ambivalence of competition and cooperation in business relationships. Co-opetition is part competition and part cooperation. It describes the fact that in today’s business Continue reading
Organizational Reflection
A successful organization can be described as thinking and seeing organization. Such organizations are characterized by high levels of information flow and awareness among all its members. The availability of information improves the awareness and understanding of organizational weaknesses, strengths, threats and opportunities. The organization members are also able to understand the history and strategic future plans for their organization as well as full awareness of the resources within the organization and the changing competitor environment. On the other hand, a thinking organization is an understanding organization that has a well stipulated vision, mission, objectives and the business environment that are well understood by all the stakeholders. Many organizational businesses collapse because they lack both foresight and hind sight necessary for understanding the current position of the organization. In ensuring an organization adopts the thinking and seeing style, reflection must become a part of the organizational practices and culture. Reflection Continue reading