Problem:
- Business lacks focus
- Spread investment
- Many strategies are either not implemented or implemented to a limited extent
- Cumbersome apparatus, high staff quit – Unreasonable allocation of resources
- Businesses slow response to environmental changes (market trends / technology trends / competitors)
Solution:
- Company strategy identifies business fields in terms of the market, target market segments in relation to decisions: business expansion, investment / divestment, optimal resource allocation …
- Business strategy is how the company dominates market share in the target market or segment based on identifying & building competitive advantages over competitors in the market.
Process:
1. Industry Analysis
- Analyze the market potential level
- Analyze competition level according to Porters’ 5 forces framework model
- Negotiation strength from supplier
- Negotiation strength from customers
- The risk from new competitors entering the market
- Risks from substitute products
- The level of competition among competitors in the market
2. Market Analysis
Market segmentation: market, customer, distribution channel, competitor, technology factor, main competitors
3. Company Resource Analysis:
- Tangible and intangible resources
- Capabilities to execute
- Competitive advantage
- Potential to generate profits from company resources (assets & capabilities)
4. Models for choosing strategy
- GE /McKinsey portfolio planning matrix
- BCG growth-share matrix