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strategy is very industry specific.
Strategy is about trade-offs: will you choose a "Low Cost strategy"? or a "product differentiation strategy"? Strategy is about matching a companies resources and capabilities with the opportunities and threats in the marketplace. In the end, strategy is about creating sustainable Competitive Advantage
Strategy is different than the goal, or mission statement. While the goal of a firm may be to "make money", or to "create value for its shareholder", the strategy is about how a company will go about achieving its goals. While A business plan may be the first step for a startup: it lays out how you plan on obtaining sustainable competitive advantages and net present value in its expected future cash flows. But long term strategy is more. The key to success in business is creating value for a customer, and differentiating yourself from your competition. Strategy is about how to accomplish these two goals. Its how a company matches their capabilities with the opportunities in the marketplace. Its about how a company will compete, and which opportunities it will (and will not) go after.
Getting the right global business is not an easy process, nor is it a static one. It is a process that requires constant attention to global trends, and changes in the competitive landscape. For international business expansion, key strategy issues may involve "which international expansion method will work best for my company?", and "which international markets should I be investing in today for profits tomorrow?". These are not easy answers to come by, so we are calling on the international community of strategic advisers to help out. Please feel free to add your insights to our global strategy wiki.
It defines where the organization is going now, describing why this organization exists. To be effective, a strategy statement should only have three essential parts:
When crafting the strategy statement for a firm, there will likely be trade-offs between market share and profitablity. Do you seek the most marke share? (if so, you may suffer a lower profit margin). Or do you seek higher profit margins (and risk capturing a lower market share)? According to Michael Porter, it is this trade-off that defines the "fundamental strategy" of a firm.
The strategy component of competing internationally is very interesting. Some of the key issues are:
1. How does a local company compete against large multinatinal
2. How can foreigners compete in emerging markets against entrenched local companies (with subsidies, government protection, etc).
3. How do you choose the right markets to compete in?
4. How to you make sure the interests of all suppliers are aligned with your own?
see more in our international strategy section and supply chain discussion
define, size, and prioritize the stages in which they need to engage the market in order to enable them to really focus on their financial, human and management resources. Starbucks, for example, pursued a textbook approach to strategy; growing from a strong core defended by a powerful brand, Value Chain control, and scale, into adjacent markets, like food, music, and events. All of which led it directly and deeply into strategy decay – by robbing it of purpose, vision, and empathy. see more in international expansion
Google's move to grab wireless spectrum and open it up for free access is straight out of the textbook : commoditizing complements to shift value away from them to your own product.
Microsoft, perhaps the ultimate hardball player, focused on ownership of a standard at all costs – and is now struggling to compete in an industry whose fabric has been riven by open standards and open code: its own domination games have returned, like the ghost of strategy past, to haunt it.
Value Chain Analysis: R&D -> Design of Products -> Production -> Marketing -> Distribution -> Customer Service
How do companies add value? they add value through their R&D, design of products, production, marketing, distribution, and customer service. Managers in all of these value chain departments add value. Each of them are customers of the cost accountant.
How do managers implement strategy? by making planning decisions and control decisions.
New ways to manage and organize production and consumption lets today’s new market leaders perceive, think, judge, and execute (vastly) more efficiently, effectively, and productively than the norm, leading directly to new sources of advantage. A good example, is Zara and their unique operating model of "fast fashion" see Operations
When discussing strategy, it is essential to first understand where you sit in the product life cycle. Then, use the BCG Matrix...The BCG matrix method is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. To ensure long-term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash. It has 2 dimensions: market share and market growth. The basic idea behind it is that the bigger the market share a product has or the faster the product's market grows the better it is for the company.
Developed by Michael Porter, this analysis summarizes basic strategies in simple summaries: see 5 forces analysis
PESTE analysis PEST analysis
* without a strong financial base, its impossible to achieve the long term strategic objectives, but
* short term pressures for meeting next quarters performance measures often distracts managers from thinking strategically long term.
* this is often the justification for Private Equity rather than publically traded companies on stock markets.
* the long term goal should be to build a strong competitive position that will benefit shareholders in the long run, even if that means missing short term financial goals.
How will google keep its edge in Innovation as it grows? How important is Human Resources to the strategy of the firm?
Google facing employee overload — Google may be overstocking itself with new employees. Jordan Rohan, an RBC Capital Markets analyst, told News.com, “Half the company has been hired in the last 12 months. That’s chaotic. The new employees find it difficult to figure out how to get things done.” Facing an employee glut, Google may not have the corporate expertise to structure the next for their new worker bees.
Simultaneously, Google is undergoing a talent drain, with some of its best and brightest striking out on their own. (The most recent: Salman Ullah.) Even John Doerr, an original Google investor and board member, is worried that the company’s culture may not survive the changes. Larger, more lumbering and less talented by the day: Is Google finally ready to become a regular corporation?
http://www.answers.com/topic/strategy
turn strategy into action - an "action plan". need input from customers, and estimates about how competitors will react. Chose right managers to implement. Make sure there is enough cash.
cost accounting provides the details necessary for a manager to determine the sources of their competitive advantage. For example, a cost accountant will provide the managers with data to show the cost and price levels that a company can charge relative to their competitors. The analysis can be used to decide whether a company can add premium features to a product, and charge premium prices. They also help to determine who are the most important customers, and how sensitive they are to price increases, and to help managers analyze competitors products in the marketplace. They help managers to determine whether or not they have adequate cash to fund the new strategy, or if they need to go through fund raising efforts. This area of cost accounting is often referred to as "strategic cost management".
In this section, I will lay out my thoughts about a viable Furniture company strategy
For more information about the hospitality industry strategy, I would recommend you to free download "Hospitality 2010" report by Deloitte that covers 4 key Hospitality industry trends. (Brand, Emerging Markets, Human Assets, Technology) :
The resource-based theory of the firm has recently been the object of much attention (Amit and Schoemaker, 1993; Barney, 1991; Conner, 1991; Grant, 1991; Hansen and ernerfelt, 1989; Nelson, 1991; Nelson and Winter, 1982; Penrose, 1959; Wernerfelt, 1984). In a resource-based perspective, attention is focused on resources, organizational capabilities, the accumulation process and the resulting sustainable competitive advantage. The more the resources are idiosyncratic, i.e. firm-specific, the less they can be acquired from the market. This leads to the building of internal capabilities which bring about creasing degrees of heterogenity among firms. Together, resources and capabilities create strategic assets (Amit and Shoemaker, 1993) which are firm-specific and thus difficult to trade on the market and to imitate.