3. The process of how strategies become shared among organizational members is not well understood, The key function of strategies and policies is to unify and give direction to plans. The objective of competitive strategy is to win the customers’ heart through satisfying their needs, and finally to outcompete the competitors (or rival companies) and attain competitive advantages. The strategy is a comprehensive concept and, for this reason, it is often used in different ways. In the box labeled SO Alternatives, match internal strengths with external opportunities. Strategic Planning is a very complicated process that demands a systematic approach to identify and analyze factors external to the organization and matching them with the firm’s capabilities. 1 0. Make your goal as specific as possible and express it in positive terms. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. It is a business-unit level strategy, formulated by the senior managers of the unit. They are comprehensive and cover a wide range of organizational activities. Alternative Views of Strategy. They set the boundaries for managerial decision making. For example, a company following a low-cost competitive strategy needs a production strategy that emphasizes reducing the cost of operations and also a human resource strategy that emphasizes retaining the lowest possible number of employees who are highly qualified to work for the organization. The main focus of the business strategy is on product development, innovation, integration (vertical, horizontal), market development, diversification and the like. Use the items you highlighted as a source of potential actions when developing your priorities. The following are some of the most important characteristics of strategic plans: 1. Operating strategy is formulated at the operating units of an organization. And competitive advantage comes from strategies that lead to some uniqueness in the marketplace. Efficiency strategies are integral parts of any business. Such a strategy describes the company’s overall direction in terms of its various businesses and product lines. Someone needs to take the vision and figure out how to accomplish it by breaking it up into strategies and goals. Implement a strategic-performance-management system. Therefore the essence of the policy is discretion strategy. Each business unit or company has its own set of departments, and every department has a functional strategy. 4. Changing an organization is often essential for a company to remain competitive. This strategy emphasizes the strengthening of a company’s competitive position of products or services. The point of matching internal factors with external ones is to identify a fit between organizational strengths and market opportunities. Torrens University Australia. Hence, it is time for a revolution… In this article, the systemic literature review method was used to synthesize the result of multiple investigations and scientific literature. Authorship/Referencing - About the Author(s) The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. A functional strategy refers to a strategy that emphasizes a particular functional area of an organization. That's why setting SMART goals - Specific, Measurable, Achievable, Realistic and Timely - is the first step in making your goal a reality. Strategic Alternatives are developed to sets direction in which human and material resources of business will be applied for a greater chance of achieving selected goals. Course. But by matching up factors from one quadrant with factors in another quadrant, you can start to identify potential actions based on the SWOT anaylsis. Functional strategies are adopted to support a competitive strategy. Use the figure as a reference for the following steps: Pull out your SWOT analysis (if you’ve completed that already). Companies today compete in a variety of industries and markets. Business strategy defines the basis on which firm wilt compete. Ali ateeq. In other words, what opportunities can you take advantage of, based on what you’ve already got to work with? In doing business, companies confront a lot of strategic issues. Firms can formulate and implement strategies from an environmental perspective by taking into considerations the following factors. But if one of them stands alone, it can hardly ensure that an organization will reach its goal. 1. • Aggressive outsourcing and partnering to gain efficiencies. 1. • One ideal competitive position in the industry. Step 1: Formulation: The formulation of the strategies essentially involves the environment within which every company has to survive. 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