Business Strategy: Achieving Competitive Advantage in Difficult Times

Introduction

The business strategy entails the direction that business is trying to get to in the long-term that allows an organization to gain a competitive advantage in the market through configuring its available resources to survive in challenging business environment. The business aims to meet its needs in the market and fulfill the expectations of its stakeholders. Business organizations have different ways they create and realize their strategies. Thus, it leads to the availability of different models of the process that depends upon an organization's culture, style of leadership or the experience of the business to create successful strategies. Action plan in a business strategy relates to an organization achieving its objectives that are either economic, social or environmental. The following paper will explore the significance of business strategy for an organization and how it impact its operations in an industry.

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Strategic Planning Process

Effective strategic planning is a necessary process to prepare in carrying out an organization mission and vision. The strategic planning process entails the steps that an organization goes through to determine essential factors in its operations. The first is the vision of the business, which is its direction that it aims to follow in a competitive environment. A vision statement highlights the kind of world that the business envisions for the community it is operating. The mission of the business is a description of what the business is going to do and how it will achieve the vision. Thus, the values offer the business an important decision to evaluate the effectiveness of the business strategic plans (Abraham, 2012, p. 59). Subsequently, a business can utilize various ways to create a strategic plan with some being more efficient and effective in comparison to others, which determines whether a business will fail or succeed.

In a strategic planning process, strategic objectives serve as an ambition that an organization aims to accomplish. A business defines its ambition in its vision and mission statements, which are the thrust for the business ultimate goal. Therefore, strategic objectives entail the steps and accomplishments that a business aims to complete to realize its ultimate goal (Talloo, 2007, p. 334). The vision and mission is a description of a business goal while the strategic objective is the choice of ways to reaching the goals. Stakeholder's analysis entails the process to develop a strategic view on the human and organizational landscape that defines the relationship between different stakeholders and the factors they consider essential in the business. Stakeholder analysis is important in developing a strategic planning process as it helps in identifying the interests of stakeholders that might be affected or impact the project. Also, it is important to manage the expectations of the stakeholders to ensure their active involvement in the business is there priority. Also, it gives the business a sense of accountability and enhances its responsibility to achieve its goals and objectives through the effective and efficient strategic planning process.

Corporate Social Responsibility (CSR) as a way to manage values such as reputation or vital honor importance in the juncture that connects business and moral interests. In the strategic planning process, all the involved stakeholders in business have a role in maintaining CSR. Around various communities, there has been arising concern relating to the impacts of business activities. CSR can have either an impact or not in affecting the performance of an enterprise. Thus, in the strategy planning process, top managers take actions that will assist the business to achieve its CSR purpose. Therefore, the business is guided by a commitment to CSR, which acts as a general rule to guide's business actions in terms of ethical grounds.

Environmental Analysis

Once a business has identified its vision and mission, it is essential to assess the currently existing condition of the market. Business conduct its operations in a turbulent environment that is prone to changes. Environmental analysis is a strategic tool that entails identifying all the internal and external factors that will influence the performance of an organization. Environmental analysis entails evaluating the external environment that includes the external stakeholders, the competition and the large environment (Harrison & John, 2010, p. 177). Therefore, accurate evaluation of environmental factors can bring the difference that results in business success or failure. Thus, the moment a business is developing a strategic plan, it is essential to evaluate the environmental factors properly that will have an impact on the business.

In strategic business planning, Porter's five forces model is a critical environmental analysis that the business needs to take into consideration. Porter's is an analysis tool that utilizes five industry forces to evaluate the intensity of competition for a business and the level of profitability it can achieve. The model of five forces was designed by M. Porter to evaluate five key competitive forces that affect an industry (Grant, Hackney & Edgar, 2010, p. 12). The five forces are the threat of new entry, bargaining power of buyers, bargaining power of suppliers, industry rivalry and threat of substitutes in a particular industry. A business that can make sound corporate strategies will shape these forces to its advantages to strengthen its position in the industry.

A business creates an attractive industry with overall profitability potential. Therefore, a business that implements unique strategies, processes and unique selling position will benefit from the Porters five forces model. PESTLE analysis is an environmental analysis necessary for performing a business strategy simulation. A business can rely on a PESTLE analysis to organize factors in an external environment to determine how they influence industries Grant, Hackney & Edgar, 2010, p.13. The names of the six segments of the general environment it represents are political, economic, social, technological, environmental and legal. The tool is critical to analyze external environmental factors that will affect the profitability of a business.

Strategic group analysis is another environmental analysis that the business needs to take into consideration while developing a business strategy simulation. It evaluates other businesses position in the competitive environment together with various underlying factors that determine profitability. The analysis offers the business insight on characterizing strategies that are significant to competitor together with a broad strategic dimension. Therefore, the dimension to differentiate other business into strategic groups opt to be chosen based on the structure of the industry or the level of profitability. In business strategy simulation, industry lifecycle analysis is a critical environmental analysis. The tool is useful to analyze the impact of industry evolution on competitive forces. Five sequential stages represent the life cycle of a business, and there are startup, growth, shakeout, maturity, and decline (Hill & Jones, 2010, p. 57). In business strategy simulation, the stages can last for different amounts of time that can be months or years.

Internal Analysis

An internal analysis entails the exploration of the business competency, competitive viability in the marketplace or its cost position. Analysis obtained is essential as it can be used by a business to develop strategic planning objectives to sustain its growth. Internal analysis aids in strategic decision making that allows the management to conduct strategy formation and execution process (Henry, 2008, p.37). Through conducting an internal analysis, the business can determine how competitive a business is in the industry. A business that has a competitive advantage over its rival will have a high market share mostly if it entails modern proprietary technology or has quality control standards. Thus, the business has established roots of competitive advantage in the industry. Also, the business boosts of distinctive competencies and resources capabilities that allow its control in the market.

Internal analysis entails the generic building blocks of competitive advantage that are critical in strategic management. A business strategy can follow four different building blocks of competitive advantage that are efficiency, quality, innovation and responsiveness to customers. A business that has a trait of these blocks allows the company to reduce the cost of its products or services and improve its profitability. In the internal analysis, value chain analysis is a process in strategic management that allows the business to identify its primary activities that will add value to its final product (Henry, 2008, p.44). The business analyzes these activities to determine ways to lower costs or increase differentiation to raise its profitability. Value chain analysis is an important strategic tool that is used to conduct internal firm activities to recognize its most valuable activities. The strategic management of utilizing value chain analysis is that once a business is capable of producing goods low costs in comparison to the market price of offer superior high-quality products in the market, it will be more profitable.

Strategic Choices

In strategic management of a business, strategic choice refers to the decision that determines the future strategy a business will follow. It entails a decision by the business to select from various models the grand strategy it considers will be better to meet the objectives of the organization (Morden, 2016, p. 367). Strategic planning choices create the corporate strategy the business requires to win against its competitors in the industry it is conducting its operations. In making a strategic choice, there is a need to have a business strategy that will determine the course of action or set of decisions it will take to assist in achieving its different goals and objectives. A business strategy allows the business to gain a competitive advantage in the market to conduct its operations in the market. In making a strategic choice, corporate strategy is the highest strategic plan that a business organization follows to define its global goals and ways it will achieve them in the market. Corporate strategy is an overall business plan, and it entails all specified strategies that are dedicated to specific departments that facilitate the functioning of an organization.

Strategic choice entails international strategies that allow the business to conduct its operations in the international market. Thus, the corporations choose to adopt a single strategy to its entire business that encompasses in many countries simultaneously. The business also makes the strategic choice of entrepreneurship and innovation. Through entrepreneurship and innovation, it offers the business a choice to adopt to strategies that are more effective and have the ability to be competitive in the industry (Morden, 2016, p. 369). Another strategic choice that a business need to makes relates to mergers, acquisition and alliances. It entails a business consolidating two business in an industry with an aim to raise its profitability, market share and impact on the market. The strategic choices will impact the way a business conducts its operations and they are a critical part of the business strategic management.

Conclusion

In conclusion, business strategy is a critical aspect for a business to conduct its operations successfully in the market to ensure it is successful and has been able to achieve its different goals and objectives. A business strategy entails various aspects that combin...