Strategic planning is an organization’s process of understanding its strategy and making decisions on where to allocate the companies resources in order to peruse the strategy. Using strategic planning can help organizations with many things like improving organizational performance, build teamwork, expertise and foresee future problems and opportunities. If strategic planning were to be used successfully it could benefit public agencies, departments, and major organizational divisions. The strategy is used to carry out the organization’s comprehensive goals. Nature of Formalized Strategic Planning The nature of strategic planning is to understand how a company will work over a period of years in order to work from where it is to where it wants to be by deciding the companies’ institutional directions, intended results, how the results will be carried out to be accomplished and how success can be measured and evaluated, having a strategic plan means the company will be able to Continue reading
Business Strategies
Business Expansion – Reasons and Forms
Reasons for Business Expansion Growth is always essential for the existence of a business concern. A concern is bound to die if it does not try to expand its activities. There may be a number of reasons which are responsible for the expansion of business concern. Predominant reasons for expansion are economic but there may be some other reasons too. Following are the reasons for business expansion. Existence: The existence of the concern depends upon its ability to expand. In a competitive world only the fittest survives. The firm need to control its costs and improve its efficiency so that it may be achieved if the activities of the firm are expansion is essential for the existence of the firm otherwise it may result into failure and may be out of business. Advantages of large scale: A large scale business enjoys a number of economics in production, finance, marketing and Continue reading
Case Study: Pfizer’s Strategy Analysis
Business-Level Strategy Pfizer, Inc. has chosen the value creation alternative of differentiation. Differentiation forces Pfizer to increase costs, resulting in an increase in product price, and most importantly an increase in customer perceived value. Pfizer’s differentiation can be achieved by producing high-quality, innovative drugs which require extensive research and development as well as patent protection. For example, Pfizer spent approximately eight billion dollars on 100 research and development projects in 2018. Furthermore, Pfizer, Inc.’s business-level strategy is known as broad differentiation. This strategy enables Pfizer to serve a large market while still creating value through its differentiation. A key tradeoff associated with a differentiation strategy, although creating a high perceived value of the brand, is the implementation of a high-cost structure. A high-cost structure demands that consumers pay premium prices for its products, which can be unattractive to some. It is near impossible to provide a low-cost yet differentiated product Continue reading
Case Study: Euro Disney Failure – Failed Americanism?
Many of Businesses in America make detailed assumptions about the potential of expand their business to other countries and structural models of organizing which can be easily failed to consider the cultural differences. One of the examples of the outcome to intercultural business is Disney Corporation’s European venture. Due to lack of cultural information of France as well as Europe, further on their inability to forecast problems, Disney acquired a huge debt. False assumptions led to a great loss of time, money and even reputation for corporation itself. Instead of analyzing and learning from its potential visitors, Disney chose to make assumptions about the preference of Europeans, which turned out that most of those assumptions were wrong. Euro Disney Disaster Until 1992, the Walt Disney Company had experienced nothing but success in the theme park business. Its first park, Disneyland, opened in Anaheim, California, in 1955. Its theme song, “It’s Continue reading
Risks of Generic Competitive Strategies
Fundamentally, the risks in pursuing the Porters generic competitive strategies are two: first, failing to attain or sustain the strategy; second, for the value of the strategic advantage provided by the strategy to erode with industry evolution. More narrowly, the three strategies are predicated on erecting differing kinds of defenses against the competitive forces, and not surprisingly they involve differing types of risks. It is important to make these risks explicit in order to improve the firm’s choice among the three alternatives. Risks of Overall Cost Leadership Strategy Cost leadership imposes severe burdens on the firm to keep up its position, which means reinvesting in modern equipment, ruthlessly scrapping obsolete assets, avoiding product line proliferation and being alert for technological improvements. Cost declines with cumulative volume are by no means automatic, nor is reaping all available economies of scale achievable without significant attention. Cost leadership strategy is vulnerable to the Continue reading
TOWS Matrix – Threats Opportunities Weaknesses Strengths Matrix
SWOT Analysis is a commonly used strategic management framework which scans internal strengths and internal weaknesses of a product or service industry and highlights the opportunities and threats of the external environment. This will help to focus on the strengths, minimize weaknesses and take the greatest possible advantage of opportunities available by overcoming threats. SWOT Analysis becomes a useless exercise if it is not extended to TOWS Analysis where the strengths are used to capitalize on opportunities and to counter threats and, the weaknesses are minimized using opportunities and both weaknesses and threats are avoided. Read More: SWOT Analysis — A Strategic Planning Tool Weihrich developed TOWS Matrix in 1982, as the next step of SWOT Analysis in developing alternative strategies. TOWS Matrix is a conceptual framework for identifying and analyzing the threats (T) and opportunities (O) in the external environment and assessing the organization’s weaknesses (W) and strengths (S). Continue reading