Business Strategy Flashcards
(30 cards)
What is Business Strategy?
The strategic initiatives a company pursues to create value for the organisation and its stakeholders to gain a competitive edge in the market.
Define Strategic Management
Strategic Management is the analysis of the current business position, setting long term objectives and deciding and implementing the strategies to achieve them
What is the need for strategic management?
- Plan for the future
- Respond to the dynamic business environment
- Create effective and informed long term decisions through clear objectives
Define Strategic Implementation
Strategic Implementation is the process of planning, allocating and controlling resources to support the chosen strategy
What is Blue Ocean Strategy?
One that exploits uncontested market space through product differentiation and low costs
What are 3 Advantages of Blue Ocean Strategy?
- Establishes a brand image through creation of a USP
- Exploits all economies of scale - profitability, growth oppurtunities
- Minimises price wars - focus is on business objectives
What are 3 Disadvantages of Blue Ocean Strategy?
- Significant costs through market research and investments in innovation
- Difficult and Time-Consuming to identify Blue Oceans as many markets are saturated
- Potential misalignment from core competencies - the business can stray away from strengths
What are 3 Evaluation Points to Consider for Blue Ocean Strategy?
- Does the business have enough financials and resources?
- Are the core competencies of the business relevant? This is important for competition to be sustained in the long term
- Does the business have the culture and the motiviation?
What is Scenario Planning?
Indentification of possible future business situations and how the organisation may respond to them.
* Important for businesses in fast moving industries
What are 3 Advantages of Scenario Planning?
- Enhances decision making as managers adopt a flexible approach - more informed planning
- A range of strategies can be developed which can help prepardness
- Managers consider main risks that can directly affect the business
What are 3 Disadvantages of Scenario Planning?
- Time consuming and costly to develop - needs expert managers and PEST analysis
- Less effective if only short term risks are considered
- Does not gurantee accurate predictions
What are 3 Evaluation Points for Scenario Planning?
- Is the business able to complement it with PEST and SWOT analysis?
- Are managers too reliant on the plan?
- Are managers trained and skilled enough to draw up strong, flexible plans?
What is SWOT anaylsis?
A form of strategic analysis that identifies and evaluates an organisations internal strengths, weaknesses, oppurtunities and threats
What are 3 advantages of SWOT analysis?
- Identifies competitive advantages - which helps develop core competencies
- Informed decision making through highlighting prominent areas
- Cost effective and easy to understand
What are 3 disadvantages of SWOT analysis?
- Limited complexitiy - in the aspect of dynamic organisations with multiple influencing variables
- Can lack detail as it is a broad overview
- Can outdate quickly
What are 3 Evaluation Points of SWOT Analysis?
- How well drawn up is the analysis? Is it subjective? Is it reliable?
- Qualitative and Quantitative information can be beneficial
- Is it being used as a management guide for future strategies or implications rather than actions?
What is PEST Analysis?
A strategic analysis of a firms external environment, including political, economical, social and technological factors
What are 3 advantages of PEST analysis?
- Risk management as it offers a structured framework accounting for external aspects
- Enhances understanding of market dynamics
- Identifies new oppurtunities or threats [ex. spot areas for growth]
What are 3 disadvantages of PEST analysis?
- Static Nature
- Lack of detailed solutions as it only identifies areas that impact the business
- Too broad or general, could be impacted by biases
What are 3 Evaluation Points of PEST analysis?
- Are managers pairing it with other tools for more informed decision making?
- Does the business have the ability to constantly update the framework?
- Are managers skilled and unbiased to analyse in depth?
What is Porters Five Forces?
A technique for analysing competitive forces in an industry - it includes barriers to entry, buyer power, supplier power and threat of substitutes
What are 3 advantages of PFFs? analysis?
- Reduces risks which can improve the resilience of strategic management decisions
- Provides a holistic view of macro and micro factors
- Can identify areas of competitive advantages
What are 3 disadvantages of PFFs analysis?
- Time consuming and complex - requires resources and expertise
- Static in nature
- Ignores internal factors
What are 3 Evaluation points of PFFs analysis?
- Are managers updating the framework?
- Is the business considering the nature of the industry while basing the decisions
- Does the businesses have the time and expertise?
