PEOPLE PERFORMANCE PROFIT
A strategy is a long term plan of action designed to achieve a particular goal, as differentiated from tactics or immediate actions with resources at hand. Strategic management is the process of specifying an organization's objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans.
Strategy will integrate goals, policies, and action sequences (tactics) into a cohesive whole, and must be based on business realities. Strategy must connect with vision, purpose and likely future trends. (From Wikipedia, the free encyclopedia)
Johnson and Scholes (Exploring Corporate Strategy) define business strategy as follows:
"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".
In other words, strategy is about:
Where is the business trying to get to in the long-term (direction)
Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
How can the business perform better than the competition in those markets? (advantage)?
What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?
What external, environmental factors affect the businesses' ability to compete? (environment)?
What are the values and expectations of those who have power in and around the business?
Strategy and strategic planning have the potential to align the people, processes and resources in an organization with a clear, compelling and desired future.In this evolving world of transparency "The World is Flat", it makes much more sense to develop a "why" based strategy or strategic plan leaving flexibility in "how".
As a consumer, I am constantly confronted by organizations who have created processes that frustrate and alienate me rather than make my life simpler and easier. Organizations have become so focused on improving their internal functions that they have ignored both the people who have to make the system work and the people who have to use it.Lots of businesses approach customer satisfaction from the standpoint of the best customer service being where people serve themselves. When it works it can be a terrific experience, but it doesn't always work.
Risk
The bargaining power of customers
buyer concentration to firm concentration ratio
bargaining leverage
buyer volume
buyer switching costs relative to firm switching costs
buyer information availability
ability to backward integrate
availability of existing substitute products
buyer price sensitivity
price of total purchase
The bargaining power of suppliers
- supplier switching costs relative to firm switching costs
degree of differentiation of inputs
presence of substitute inputs
supplier concentration to firm concentration ratio
threat of forward integration by suppliers relative to the threat of backward integration by firms
cost of inputs relative to selling price of the product
importance of volume to supplier
The threat of new entrants
the existence of barriers to entry
economies of product differences
brand equity
switching costs
capital requirements
access to distribution
absolute cost advantages
learning curve advantages
expected retaliation
government policies
The threat of substitute products
buyer propensity to substitute
relative price performance of substitutes
buyer switching costs
perceived level of product differentiation
The intensity of competitive rivalry
power of buyers
power of suppliers
threat of new entrants
threat of substitute products
number of competitors
rate of industry growth
intermittent industry overcapacity
exit barriers
diversity of competitors
informational complexity and asymmetry
brand equity
fixed cost allocation per value added
level of advertising expense
Stage
"Business as usual is deed", next stage is emerging.Together Business Process Management and Service Oriented Architecture facilitate the next phase of business process evolution from merely "automated" to "managed flexibility." Thus business automation will no longer be about hard-coding a function to be repeated infinitely. Automation will be about creating services reusable in many different ways in multiple processes that can be continuously improved. This helps allow enterprises to achieve dramatic improvements in market capture, cost effectiveness and profitability. Many consider the current preponderance of niche marketing, rapid customization of product design and manufacturing through just-in-time systems to be the death-knell of "one-size-fits-all" products and services
Questions to ask:
Who are our competitors?
What threats do they pose?
What is the profile of our competitors?
What are the objectives of our competitors?
What strategies are our competitors pursuing and how successful are these strategies?
What are the strengths and weaknesses of our competitors?
How are our competitors likely to respond to any changes to the way we do business?
Resources
Creativity remain the most relevant resource. Now it is time to use customer creativity. All strategies will follow this pattern, that in fact represent Internet creativity distribution at this moments ("The Horovitz pyramid") and represent a niche market due the fact: this is not a Gauss distribution (normal distribution). This resource is change the evolution shape with high speed, so is just the time to get the connection that we need. Multi Level Marketing was suggested as technique for nice market.
Existing finance funds
Cash balances
Bank overdraft
Bank and other loans
capital
Working capital, already invested in the business
Creditors (suppliers, government)
Ability to raise new funds - Strength and reputation of the management team and the overall business
Strength of relationships with existing investors and lenders
Attractiveness of the market in which the business operates (i.e. is it a market that is attracting investment generally?)
Listing on a quoted Stock Exchange? If not, is this a realistic possibility?
Human Resources
The heart of the issue with Human Resources is the skills-base of the business. What skills does the business already possess? Are they sufficient to meet the needs of the chosen strategy? Could the skills-base be flexed / stretched to meet the new requirements? An audit of human resources would include assessment of the following factors:
Exististaffing resources - Numbers of staff by function, location, grade, experience, qualification, remuneration
Existing rate of staff loss ("natural wastage")
Overall standard of training and specific training standards in key roles
Assessment of key "intangibles" - e.g. morale, business culture
Changes required to resources - What changes to the organisation of the business are included in the strategy (e.g. change of location, new locations, new products)?
What incremental human resources are required?
How should they be sourced? (alternatives include employment, outsourcing, joint ventures etc.)
Physical Resources
The category of physical resources covers wide range of operational resources concerned with the physical capability to deliver a strategy. These include:
Production facilities - Location of existing production facilities; capacity; investment and maintenance requirements.
Current production processes - quality; method & organisation
Extent to which production requirements of the strategy can be delivered by existing facilities
Marketing facilities
Marketing management process
Distribution channels
Information technology
IT systems
Integration with customers and suppliers
Intangible Resources
It is easy to ignore the intangible resources of a business when assessing how to deliver a strategy - but they can be crucial. Intangibles include:
Goodwill - The difference between the value of the tangible assets of the business and the actual value of the business (what someone would be prepared to pay for it)
Reputation - Does the business have a track record of delivering on its strategic objectives? If so, this could help gather the necessary support from employees and suppliers
Brands - Strong brands are often the key factor in whether a growth strategy is a success or failure
Intellectual Property - Key commercial rights protected by patents and trademarks may be an important factor in the strategy.
Create in two years frame a safe smart networks and inside three to four years intelligent networks using the same business DNA patterns as intelligent molecules.
Mintzberg defines a mission as follows:"A mission describes the organisation's basic function in society, in terms of the products and services it produces for its customers".A clear business mission should have each of the following elements:
A Purpose Why does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy the needs of all stakeholders (including employees, and society at large?)
A Strategy and Strategic Scope A mission statement provides the commercial logic for the business and so defines two things:
The products or services it offers (and therefore its competitive position) (What)
The competences through which it tries to succeed and its method of competing (Who)
A Business strategic scope defines the boundaries of its operations. (Where) These are set by management.For example, these boundaries may be set in terms of geography, market, business method, product etc. The decisions management make about strategic scope define the nature of the business.
Policies and Standards of Behaviour A mission needs to be translated into everyday actions. For example, if the business mission includes delivering "outstanding customer service", then policies and standards should be created and monitored that test delivery. These might include monitoring the speed with which telephone calls are answered in the sales call centre, the number of complaints received from customers, or the extent of positive customer feedback via questionnaires.
Values and Culture The values of a business are the basic, often un-stated, beliefs of the people who work in the business. These would include:
Business principles (e.g. social policy, commitments to customers)
Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for the good of the business as a whole? And does the business demonstrate a high level of commitment and loyalty to its staff?)
Guidance on expected behavioura strong sense of mission helps create a work environment where there is a common purpose
What role does the mission statement play in marketing planning? In practice, a strong mission statement can help in three main ways:
It provides an outline of how the marketing plan should seek to fulfil the mission
It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission?
It provides an incentive to implement the marketing plan
The center point for every missions is the fact : we have assumed the obligation to obtain profit otherwise doe's not exit any reason to exist as business. Our basic opinion is that the firm name represent the center of activity area all other lucrative areas will be centered to this.
strategic planning - setting objectives
Objectives set out what the business is trying to achieve.
Objectives can be set at two levels:
Corporate level These are objectives that concern the business or organisation as a whole.
We aim for a return on investment of at least 15%
We aim to achieve an operating profit of over ÂŁ10 million on sales of at least ÂŁ100 million
We aim to increase earnings per share by at least 10% every year for the foreseeable future
Functional level ( specific objectives for marketing activities) :
We aim to build customer database of at least 250,000 households within the next 12 months
We aim to achieve a market share of 10%
We aim to achieve 75% customer awareness of our brand in our target markets
The SMART criteria are summarised below:
Specific - the objective should state exactly what is to be achieved
Measurable - an objective should be capable of measurement so that it is possible to determine whether (or how far) it has been achieved.
Achievable - the objective should be realistic given the circumstances in which it is set and the resources available to the business.
Relevant - objectives should be relevant to the people responsible for achieving them
Time Bound - objectives should be set with a time-frame in mind. These deadlines also need to be realistic. (When)
strategic planning - values and vision
Values provide the justification of behaviour and, therefore, exert significant influence on marketing decisions.
networks s.r.l. - defining our values:
netwoks's activities are underpinned by a set of values that all netwoks people are asked to respect:
- We put customers first
We are professional
We respect each other
We work as one team
We are committed to continuous improvement.
These are supported by our vision of a communications-rich world - a world in which everyone can benefit from the power of communication skills and technology. A society in which individuals, organisations and communities have unlimited access to one another and to a world of knowledge, via a multiplicity of communications technologies including voice, data, mobile, internet - regardless of nationality, culture, class or education. Our job is to facilitate effective communication, irrespective of geography, distance, time or complexity. (Source: BT Group plc web site )
Why are values important? Many Japanese businesses have used the value system to provide the motivation to make them global market leaders. They have created an obsession about winning that is communicated at all levels of the business that has enabled them to take market share from competitors that appeared to be unassailable.For example, at the start of the 1970's Komatsu was less than one third the size of the market leader “ Caterpillar “ and relied on just one line of smaller bulldozers for most of its revenues. By the late 1980's it had passed Caterpillar as the world leader in earth-moving equipment. It had also adopted an aggressive diversification strategy that led it into markets such as industrial robots and semiconductors. If "values" shape the behaviour of a business, what is meant by "vision"?To succeed in the long term, businesses need a vision of how they will change and improve in the future. The vision of the business gives it energy. It helps motivate employees. It helps set the direction of corporate and marketing strategy. What are the components of an effective business vision? Davidson identifies six requirements for success:
Provides future direction
Expresses a consumer benefit
Is realistic
Is motivating
Must be fully communicated
Consistently followed and measured
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