Strategy development has evolved through 5 key phases over the years. Strategy development started with a focus on financial planning in the 1950s, moving to sustainable planning in the 1960s, to strategic planning in the 1970s and ultimately to a focus on strategic management in the present day. Today, the strategic development theme is on integrating strategic planning and execution with a stress on the key concepts of core competencies, strategy planning and execution, and balance scorecard analysis. Shifts in strategic mindset represent a changing landscape, new business leaders, and emergence of disruptive technologies and trends. A lot of competitive strategy is also hinged on ideas in the 1970s, where the core theme was around thinking strategically to beat competition and the business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix emerged.
To build a robust business strategy, businesses must conduct strategy development beginning with a clear understanding of its current situation and identified strategic challenges. The next steps, on a high level, include defining what the future vision of the organization is and then going into the details of strategically planning how to get to that state. In order to understand your strategic challenges, you must begin with a complete, end-to-end understanding of your situation. It is also important to realize that there is more to strategy than just winning. Strategy is about value innovation, strategy is about selectivity, and strategy is about speed .
Bower believes that the strategic planning and budgeting processes are at the heart of the strategy development process. Capital market context is also looked at, which is defined as demands and influence of providers, such as investment firms. This framework is called the Resource Allocation Process RAP framework. RAP based strategy planning and budgeting is a bottoms up approach to locating and selection of important business priorities. Organizational context is composed of organizational governance and the organizational structure, definition of performance metrics and rewards, and the managers beliefs and cognitive frames. Within the Resource Allocation framework, when market context is discussed, we are evaluating the demands of the primary customer base,and technological development. Strategic intent is defined as the observable and communicated primary strategy.
Business strategy includes the areas of corporate strategy, marketing and brand strategy, sales strategy, as well other areas of strategic thinking. Sales strategy includes channel strategy, direct sales strategy, and business development. Marketing strategy and sales strategy are many times coupled together, but are completely different in actuality. Within growth strategy, we include both natural growth and inorganic growth, namely M&A. Marketing strategy includes advertising strategy, go-to-market strategy, and SEO strategy. Business strategy development is many times done within a yearly strategic planning session or workshop, usually conducted in a 3-5 day remote conference space with management and key personnel, both inside and external to the company.
Today, there are Mintzberg and Bower present contrasting and complementary ideas around strategic management. Henry Mintberg also advocates a transformation of business practices, where management recognizes the need and has the ability to manage complete business operations transformation. In organizational configuration, the organization engages in behaviors based on adaptation to contexts. Henry Mintzberg opts for an organization, bottom-ups process to drive the strategy development process that hinges upon organizational configuration.
The way business leaders evaluate and analyze strategy within that of modern business organizations has been shaped by military strategists since the beginning of organized warfare. Sun Tzu spoke about indirect business strategies when he said winning without fighting is the highest of skill on the battlefield. Sun Tzu preached to know and attack the enemys strategy. In Sun Tzus Art of War, he spoke about several core factors in military strategy and each of these factors relates to a popular concept of business strategy. Sun Tzus thoughts about the factor of land topography, in todays business landscape, translates to markets, industry structures, value propositions, and competitive forces.
Strategy Development
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