Business strategy is a company's high-level plan which enables it to achieve a specific business goal. This plan succeeds when they ensure in the long run there is development and growth in the business, a better business aggressive position, and better money related execution. At the point when the high-level plan or system fails, be that as it may, the firm should either consider alternative technique or get ready to quit the business. Generally, it is an organization's working arrangement for achieving its vision, hitting targets, competing effectively, and improving the use of the budget with its plan of action (Teece, 2010, pp.187). Organizations in various businesses and geographic markets confront broadly different vital difficulties, and officials persistently search for the correct system definition as their business sectors advance.
Generally, there are three levels of business strategy namely corporate, business and functional level strategies as discussed. The corporate level strategy is long-run, activity arranged, incorporated and exhaustive arrangement planned by the best administration. It is utilized to determine business lines, extension, and development, takeovers and mergers, expansion, reconciliation, new zones for speculation and divestment et cetera. The business level strategy is the techniques that identify with a specific business are known as business level strategy. It is produced by the general directors, who change over mission and vision into solid systems. It resembles an outline of the whole business while the practical level technique is Developed by the mainline administrators or bosses, the functional level strategy includes basic leadership at the operational level concerning specific utilitarian zones like advertising, generation, human asset, innovative work, fund thus on. In business, there is dependably a requirement for numerous procedures at different levels as a solitary technique isn't just deficient however inappropriate as well. Therefore, a typical business structure always possesses three levels.
Business strategy has various purposes as discussed here. A business strategy is a well-laid procedure that has a set of goals for your business' future and explains how best to achieve the goals mentioned. Its main aim is to ensure there is coordination between the organization's vision, mission and the plan: The mission (defining your business' inspiration), the vision (describing what you need to achieve) and the plan (outlining how you need to accomplish your definitive goals). A business technique is important to decide the bearing for your association. It centers your endeavors and guarantees that everybody in the business is working towards a shared objective. It additionally encourages you to concur on activities that will add to business growth, align assets for ideal results, prioritize money related needs, build upper hand and draw in with your staff and impart what should be finished.
Another noteworthy motivation behind strategic planning is to enable you to oversee and decrease business dangers. Growing a business is inalienably dangerous. Detailed planning may assist you with removing uncertainty, analyze potential dangers, execute hazard control measures and think about how to limit the effect of dangers. There is an unmistakable connection amongst technique and execution and besides it is conceivable to anticipate future execution of an association by inspecting their published strategy (Teece, 2010, pp.187). Above all, it is evident that there is a contrast between associations that create a business strategy since they think it is the best activity and different associations that deliver a business strategy since they think it is an undertaking which should be performed. The reason for a business strategy is to develop your business, enhance your business or both.
What Is Meant by the Process View of an Organization?
Each organization has an organization diagram which demonstrates every one of the capacities in the organization, and who each capacity reports to in the hierarchical structure. Each organization additionally needs a procedure perspective of the organization to indicate how every one of the procedures integrates. This is the process view of an organization.
To build up this process view of the organization you get that view from building up a grouping system. The advancement of this system requires some serious energy and contribution from numerous individuals in the organization. In the event that this is the start of an organization's procedure endeavors, have administration build up the system as a major aspect of its key part. On the off chance that there is the process going on in progress, the procedure advocate (the individual or gathering who is managing the underlying procedure endeavors) may begin the improvement of the procedure (Teece, 2010, pp.187). As workers in numerous levels of the organization begin to center around forms, it winds up vital for the organization to build up a rundown of its procedures. Rare sorts of people who are more occupied with the procedure endeavors (the Process Advocates) have a tendency to create and refresh the underlying rundown. This rundown begins with the procedures that have been or are being taken a gander at for comprehension and change. To help build up the rundown; you may take a gander at outside sources that have created nonexclusive systems.
Once an organization has arranged and organized its procedures, these procedures keep on being overseen independently, yet in addition as a feature of an arrangement of procedures. The interrelationships between procedures must be unequivocally comprehended, and the association's procedures overseen as a framework. The Process Relationship Map and the characterization structure characterize the picture of how the organization works and the communications that happen over the association. It turns into the dialect individuals in the association used to clarify how they do what they do. It gives the instrument to organize process endeavors and to connect them to the methodology. It gives the lucidity to know where to center.
What Are the Main Factors to Be Considered in the Strategic Analysis of an Organization?
There are three factors to be considered which include; Recognizable proof and assessment of data important to strategy plan, Definition of the external and internal condition to be analyzed lastly a scope of analytical methods that can be utilized in the examination.
In identifying data relevant to strategic plan it makes it easier for analysis. Data are facts which support the planning process. There are four data circles which can give important information which can be used in the planning and eventually in the analysis. The circles include Megatrends (This trends affect most organizations that include growth of millennials), Market (This data shows your current market geographically and the market targeted. This data can be obtained from census and economic development organizations), Industry (This data focuses on industry trends, the sizes of market, the shifts in customer base and hindrances to achieving your mission and fulfilling your mission) and Competition (This data focuses on knowing what your competitors do thus helps in having a complete view of your external factors). With these data in place, you can analyze the organization thus a factor to consider.
Definition of the external and internal condition to be analyzed is also a factor to be considered. This is done by assessing external environmental factors and analyzing the internal factors relevant to the analysis of the organization. Lastly, the scope of analytical methods is a factor to be considered in the strategic analysis they include SWOT, STEEPLE, PORTER'S five forces and PEST.
Analyze IKEA’s Competitive Position Using Porter’s Five Forces
The force of bargaining power of suppliers. The power of bargaining of the suppliers of IKEA is relatively low due to the fact that the suppliers do not have a substantial bargaining power since IKEA has many alternatives across the globe. There are various industries in the world with the potential and enough resources to form a beneficial partnership with IKEA. Despite this fact, IKEA does not form relationships which last for a long period of time. However, it is important to note that despite the fact that production is done in various nations, IKEA has a complete supervision on the operations on all those nations and has a full control and management system in order to maintain their bargaining position with the company suppliers.
IKEA uses a bidding system which makes the suppliers across all the nations feel lucky being related to the IKEA products and services thus they try in their best of ability to win the bid in order to secure an opportunity to supply to the market of the best and leading furniture industry and this, in turn, minimizes and sometimes leaves the supplier with no power at all to bargain. It is important to note that the bargaining power of suppliers increase when the suppliers are not many in number when the supplier's alternative product is depleted when the supplier's products cause very expensive switching cost. IKEA has managed to control its suppliers to avoid the situation where the firm charges the customer's high prices for the products since the suppliers are in a position to bargain their supply cost. In IKEA we can confidently claim that the bargaining power of suppliers is relatively low.
The force of bargaining power of buyers. It is significant to note that normally the power of bargaining of customers in the world furniture retailers like IKEA is relatively high as well as other retailers which have not gone global yet. IKEA is a big firm and the prices charged are affordable and this, in the long run, requires IKEA to have an effective pricing strategy which leaves the customers with significant minimum or at times completely no chance to bargain. Normally IKEA has a standard and affordable approach to pricing which enables IKEA to outdo the other firms which retail in the same products and services. This, in the long run, leaves the customer with no chance or very minimum choice to try substitute products and services offered by other firms. Most firms are at a war price, however, most customers will tend to go for IKEA due to their brand and the convenience of IKEA.IKEA also offers customers discounts and affordable cost products (Peng et al., 2008, pp.930).
Another force is the threats of new entrants. The new entrant in the market affects the market share due to many firms with the same customers. When other brands get into the market they do so in a small volume thus the impact on the business of IKEA is low. It is worth noting that there are many firms in the furniture industry, when other brands get in the market it definitely takes a lot of time and much effort to make the brand grow and take much of the market share. Marketing of these new brands can cost huge sums of money thus requiring major investment (Peng et al., 2008, pp.930). The challenges to the new brands are minimum but for the brand to grow in order to grab a large market share it needs a lot of investment and this major barrier to make it a well-known brand. Due to this threat, IKEA has found a chance to expand and make their brand well known since they have the capability thus taking advantage of the situation making their brand bigger, in the long run, minimizing the threats from new entrants.
The force of threat of substitutes. Essentially there are few products that can meet the demand in the market for furniture compared to what IKEA offers. Therefore this force of threat of substitutes has a low eff...
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