“Essentially, developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals” Michael E. Porter (1980)
Unlike the day-to-day activities, strategy focuses on a broader spectrum of long term plans of at least a year or more ahead, with many covering a period of three to five years. The plan focuses on the achievement of the organisation’s goals, often with a whole business improvement emphasis. Some examples of strategic goals might include:
Even with clearly planned strategy, unexpected events and crises can cause deviation from the planned outcomes with an emergent approach needing to be applied. As such, it is essential to have effective processes in place to respond to both opportunities and crises, in order to underpin and support formal planning.
Strategy Models
A strategy model identifies the purpose of the organisation and the process that will be followed to achieve this. Strategy models may be:
- Basic – these have fewer components and are unlikely to apply to a whole organisation context e.g. SWOT and PESTLE.
- Complex – these have multiple components and focus on the operation of the organisation as a whole, considering factors such as resource availability, organisational culture and values, e.g. McKinsey’s 7S Framework, Porter’s 5 forces, as well as The Balanced Scorecard.
Strategic Thinking
Strategic thinking is the ability to see the bigger picture and think about the future. Strategic thinkers can identify new solutions for existing problems and identify new ideas. (Walsh, 2014)
It is invaluable for your organisation to encourage strategic thinking for all staff, not just those within senior leadership or management positions. Oestreicher (2017) states Strategic thinking can be developed by encouraging employees to be:
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References
Balanced Scorecard Institute (2017). Balanced Scorecard Basics www.balancedscorecard.org/BSC-Basics/About-the-Balanced-Scorecard
Bryan, L (2008). ‘Enduring Ideas: The 7-S Framework’ McKinsey Quarterly www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/enduring-ideas-the-7-s-framework
Fallon, N (2017). ‘SWOT Analysis: What is it and when to use it?’ Business News Daily www.businessnewsdaily.com/4245-swot-analysis.html
Martin, M (2017). ‘Porter’s Five Forces: Analysing the Competition’ Business News Daily www.businessnewsdaily.com/5446-porters-five-forces html
Oestreicher, C (2017). ‘How to Master Strategic Thinking’ Forbes www.forbes.com/sites/forbescoachescouncil/2017/02/02/how-to-master-strategic-thinking/#5f61a5b811e7
Ohri, A (2016). ‘Top 7 Business Strategy Models’ Decision Stats www.decisionstats.com/2013/12/19/business-strategy-models
Osterwalder, A, Pigneur, Y, Clark, T, & Smith, A (2010). ‘Business model generation: a handbook for visionaries, game changers, and challengers’ John Wiley & Sons
Oxford Learning Lab ‘PESTLE – Macro environmental analysis‘ www.oxlearn.com/arg_Marketing-Resources-PESTLE---Macro-Environmental-Analysis_11_31
Porter, Michael E. (1980). Competitive Strategy. The Free Press
Porter, Michael E. (1985). Competitive Advantage. Free Press.
Tyler, S (2017). ‘The Manager’s Good Study Guide’ The Open University
The Business Model Canvas ‘Strategyzer’ http://strategyzr.s3.amazonaws.com/assets/resources/the-business-model-canvas.pdf
Walsh, P (2014). ‘Are you a strategic thinker?’ Harvard Business Publishing www.harvardbusiness.org/blog/are-you-strategic-thinker-test-yourself
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Further Resources
Further Resources
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