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Essay: Essay notes: What needs to be considered when planning a business strategy?

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  • Published: 4 October 2015*
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  • Words: 570 (approx)
  • Number of pages: 3 (approx)

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The organisation has to know what they want to achieve with their business. Besides that, the organisation also has to know what the external and internal influences can be and have to know in which phase they are. Which goal wants the company achieve?
Learning Goals
1. What is the goal of the company?
To get an insight how the company consider responses to their environment (Markus & Dam, 2012).
2. What can influence the business strategy (internal and external)
New entrants
The price can increase, but the turnover decrease. This may cause in the strategy of a company, because they may have to change the barriers.
Buyers try to reduce the price. If they have a strong influence, it is possible that the turnover is low.
When the price of substitutes product increase, the company change also the price of their own products.
The suppliers have a huge influence on the strategy of the company. If they increase the price of their products, than it is almost predictable that the company also increase their prices.
The influence of competitors depends on how many market competitors are there, the costs and the market growth.
(Markus & Dam, 2012)
3. Define business strategy
It is a planning that describes what an organisation has to do to achieve its aims (Markus & Dam, 2012).
4. What are the different kinds of strategy?
The strategy depends on three categories

  • On the market share
    On the influence of the environment
  • On the expansion

Market share:
The organisations can be described as Market leaders, Challengers, Followers and Specialists. Each of these kind of organisations have its own strategies.
The market leaders have these strategies

  • Position strengthening – low prices or good advertising
  • Attacking the flanks – focusing on the protection
  • Enhancing mobility ‘ create more products

Challengers have these strategies

  • Head-on attacks – use the same products as the market leader
  • Attack from the flanks – use their own strong products
  • Hedge the market – use better products and better advertising
  • Indirect path – build a new market with new products
  • Guerrilla path – user lower prices to abolish the balance of the market leader

Followers has three strategies:

  • Use the same strategy as the market leader
  • Use the same strategy as the market leader but at some points differentiation
  • Imitating the strategy at the administrative part, but in other zones, use their own strategy

Specialist are a part of the market:

  • Focus on the geographical part
  • Focus on the product part

Companies that are operating in an environment that can change can use 4 strategies

  • Immunisation – companies have to protect themselves through expansion.
  • Adaptation – be flexible for changes
  • Manipulation – win their market place back
  • Innovation

Companies that want to grow can use the expansion strategies:

  • Market penetration – growth in their own market with existing products
  • Product development – growth in their own market with new products
  • Market development – enter a new market with their existing products
  • Diversification – enter a new market with new products.
    (Markus & van Dam, 2012).

5. How is the business strategy implemented in a company?
The implantation of a strategy is done by a planning cycle. This process has 3 steps

  • Strategic planning – a plan, in short timeframes, that provides the result of the strategy.
  • Operational planning – a plan that describe the activities that contribute to the achievement of the goals.
  • Function-specific planning – this is a system that provides feedback and reports.

(Markus & van Dam, 2012)
Marcus, J., & van Dam, N. (2012). Organisation & Management: An International Approach
(2nd ed.). Groningen: Wolters-Noordhoff.

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