One of the greatest challenges that managers face today is whether to think so far ahead and plan for the future or to focus on the present and just act intuitively as the circumstances demand.However,the only way managers can be able to achieve more and build is to have a strategic plan (Wallace,1998)
A strategic plan can been defined simply as plan of achieving both long term and short term goals, Thus to formulate a strategy it is important it is important to find out what are the goals, objectives and vision of the organization and then to figure out how these can be achieved. This allows someone to craft a relevant strategy that can help in achieving the stated goals and objectives. Some of the techniques that can help in strategy formulation for a company include; Porter’s four competitive strategy, diversification and synergy and BCG matrix.
BCG matrix espouses an organization structure is made along the lines of various divisions that are autonomous, consisting of the same products lines and activities and these facilitates allocation of a company’s resources. The first step in BCG matrix is to identify and classify various strategic business units (SBU’s). An SBU can be a product line, an individual brand that can be planned for independently and has a separate mission. All SBU’s are looked at basing on two dimensions; market share and growth, this helps to determine which businesses should be helped to grow and which ones should be abandoned.
Porter’s four competitive strategy is about doing things differently or doing different things from your rivals (Porter, 1985).The purpose is to have a competitive advantage over your rivals. He outlines four generic strategies that can achieve this; overall price leadership that entails providing services at the lowest price, differentiation is another strategy that entails offering something different to your rivals that can justify higher prices such as superior quality and special features. The third market strategy is cost focus strategy that keeps the cost a product low and targets a narrow market.Laslty, focused-differentiation offers unique and superior products compared to rivals and also targets a narrow market.
Diversification and synergy has the motive of spreading the risk into various sectors and harnessing the profitability from all these sectors. A company that chooses this strategy seeks to have a competitive edge over their rivals. I believe that the best strategy for a manager to choose is Porter’s four competitive strategy because it helps a company to attract customers but at the same hold on to what it does but shielding off competitive forces.
Strategic positioning is to keep a distinctive image and to remain different from your rivals so as to have a sustainable competitive advantage of them (Williams, 2009) some of the principles of strategic positioning include; trade-offs, letting go of something products to specialize in others. Second is a distinctive value chain where a company does different activities or similar activities in a different way than its rivals. Lastly, a company must deliver a unique value different from what is offered by competitors.
They are five steps in strategic management process. First you must establish the vision and vision of an organization. Secondly, environmental scanning and this involves looking at both internal and external factors that might influence an organization. Strategy formulation is another process that entails choosing from many strategies the one that can best help in achieving organizational goals and objectives. The fourth step is strategy implementation that is in simple terms putting the chosen strategy to work and finally is strategy evaluation and this is the process of looking at the performance of the organization and how the new strategy has been of help with a view of taking corrective steps(Williams,2009). This process helps an organization to be a success because it identifies areas of weaknesses to improve and strengths to major in so as to have a competitive advantage.
Porter, M. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press ;.
Wallace, M. (1998). Fire department strategic planning: Creating future excellence. Saddle Brook, NJ: Fire Engineering.
Williams, K. (2009). Strategic management. New York, N.Y: DK Pub.
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