Strategic choices for businesses
- Investment Strategy. Investment strategy contributes to business stability and success of its business engagement. ...
- Ambidextrous strategies. ...
- Marketing Strategy. ...
- Strategic Business operations. ...
- Financial strategies. ...
- Organizational Strategies. ...
- Product and service quality strategies. ...
What are the elements of Strategic Choice process?
- Identify your mission statement.
- Create a vision of the future.
- Develop core values and guiding principles.
- Create long-term goals and smart objectives.
- Establish an action roadmap with timelines.
- Build a communication plan.
- Establish an implementation and monitoring plan.
What is the meaning of Strategic Choice?
Strategic choice simply refers to the strategy chosen out of available alternatives for attaining organizational objectives. It is termed as the most appropriate one that is selected after analysis of various facts by experts.
What is strategic choice approach?
The Strategic Choice Approach (SCA) is a method meant to deal with operational decision in a strategic way and to manage different sources of uncertainty in decision-making processes.
What is strategic choice theory?
Strategic choice theory provided an alternative that emphasized the agency of individuals and groups within organizations to make choices, sometimes serving their own ends, that dynamically influenced the development of those organizations.
What are the four strategic choices?
To avoid this fate, companies should examine their strategic choices through four critical, interdependent lenses—the company's financial performance, market opportunities, competitive advantage, and operating model (exhibit).
What are strategic options examples?
One example of a strategic option is the decision to add a new supply system or to take over a competitor to acquire new technologies or to enter a new geographical area. Due the variety of shapes they can take, strategic options can be classified on the basis of a number of variables.
What are the types of strategic choice?
Porter's generic strategies suggest using three key strategic options: Cost Leadership, Differentiation, and Focus. These three options aim to give an organization a competitive advantage and evolve as a leader.
What are the three strategic options?
According to Porter's Generic Strategies model, there are three basic strategic options available to organizations for gaining competitive advantage. These are: Cost Leadership, Differentiation and Focus.
What is strategic choice?
Strategic choice is the path that is chosen by organization for carrying out its activities in future towards achievement of targets. Process of making strategic choice comprises of 4 steps: – Focusing on strategic alternative, analyzing strategic alternatives, evaluation of strategic alternatives and making a strategic choice.
How is strategic choice made?
Finally, the strategic choice is made after doing an evaluation that gives a clear idea about which one is most appropriate under existing conditions. One or more strategies are selected and a blueprint describing conditions for operation of these strategies is created. In order to deal with unforeseen scenarios, contingency strategies are also formulated.
What are strategic alternatives?
Strategic alternatives at corporate level are Stability, Expansion, Combination and Retrenchment. Whereas at business level they are Cost leadership and Focused Business strategy.
What are objective factors?
Objective factors which are based on analytical methods and are hard facts for facilitating a strategic choice. Subjective factors that are based on one’s personal perception and descriptive factors.
What is strategic choice?
Strategic choice. Strategic choice typically follows strategic analysis and is based upon the following three elements. Generation of strategic options, e.g. growth, acquisition, diversification or concentration. Evaluation of the options to assess their relative merits and feasibility.
What is strategic option generation?
Strategic options generation is the process of establishing a choice of possible future strategies. There are three main areas to consider. Porter describes certain generic competitive strategies (lowest cost or differentiation) that an organisation may pursue for competitive advantage They determine how you compete.
Abstract
During hard economic times, businesses often turn back to obvious strategies given strengthening their survival. However, continuous plans should be adopted by businesses to shield them from unexpected uncertainties that may emerge during hard economic times such as recession.
Current economic conditions
Current economic conditions of businesses can broadly be grouped into two categories. The first category can be associated with macroeconomic recession and the second category is based on environmental thunderbolts, aggression or surprise.
Strategic choices for businesses
Strategic choices to influence businesses and their strategic goals to gain present and future objectives are diverse. First economic recession compels businesses to employ retrenchment strategies to aid in saving operational costs. Retrenchment entails aids in decreasing running costs and divestment of nonessential resources.
Conclusion
Strategic alternatives can aid in driving a business to achieve economic success when created and practiced in tandem with what the business objectives entail.
What is strategic choice?
Strategic choice is therefore, the decision to select from among the grand strategies considered, the strategy which will best meet the enterprise objectives. The decision involves the following four steps – focusing on few alternatives, considering the selection factors, evaluating the alternatives against these criteria and making ...
What is the purpose of evaluation of strategies?
3. Evaluation of strategies – Each factor is evaluated for its capability to help the organization to achieve its objectives. This step involves bringing together analysis carried out on the basis of subjective and objective factors. Successive iterative steps of analyzing different alternatives lie at the heart of such evaluation.
What are objective factors?
Objective factors – These are based on analytical techniques and are hard facts used to facilitate strategic choice. Subjective factors – These are based on one`s personal judgment, collective or descriptive factors. 3. Evaluation of strategies – Each factor is evaluated for its capability to help the organization to achieve its objectives.
Why do companies need to look at more than just financial opportunities when embarking on a new strategy or implementing?
Companies need to look at more than just financial opportunities when embarking on a new strategy or implementing a transformation program. They need to follow a due-diligence process for strategy, in the same way they would dispassionately and holistically vet critical mergers and acquisitions. Such a process can counter innate biases that lead to indecision or incremental rather than bold moves. The four interrelated lenses we’ve described provide a road map for ensuring that a strategy plan is supported by the right investments and change in operating model.
What should strategy teams address after conducting the requisite analyses of markets?
After conducting the requisite analyses of markets, strategy teams should be able to address two key questions: In which market segments will we be able to grow profitably over time? What additional attractive markets should be considered?
Why do executives overemphasize the first two?
Executives tend to overemphasize the first two—viewing choices strictly in the context of financial and market opportunities— because those lenses represent critical inputs into the business case. But knowing what it will take to meet or beat financial expectations and which markets are profitable won’t do much good if the company doesn’t have the assets or capabilities required to win in those markets. Nor will it do much good if the company lacks the people, processes, and organizational structure to implement the proposed strategy successfully.
What is competitive advantage lens?
The competitive-advantage lens can help executives identify whether the company has what it will take to win in current markets and those going forward, or whether a big change is required to capture value. An honest assessment of current capabilities should inform how the company chooses to play in its markets, as well as partnerships or acquisitions that may be necessary.
Why do executives fall short of their investment?
But given time pressures, innate biases, and other factors, executives typically fall short in their consideration of assets, capabilities, and the investments required to compete more effectively against rivals.
How to create value in a company?
To create value, companies must deliver returns above and beyond the cost of capital, or they must deliver returns that exceed those of peers. Thus, executives should also use benchmarks to figure out how the company must perform to move well beyond that threshold—delivering top-quintile returns to shareholders, for instance. An objective look at peers’ performance will help companies develop a meaningful three- to five-year plan for how to earn excess returns. Companies can learn a lot from this benchmarking exercise: perhaps high returns in the past were the result of a run-up in multiples in the market and, hence, expectations, but not actual performance.
Why do companies need a financial lens?
Most companies necessarily initiate their strategy processes with a look at their financial performance. The financial lens can help them incorporate an outside view into these discussions and develop an objective baseline for assessing the feasibility of long-term targets.
What are the factors that affect strategic choice?
Personal factors like own perception, views, interests, preferences, needs, aspirations, personal disposition, ambitions, etc., are important and play a vital role in affecting strategic choice. Even the most attractive alternative might not be selected if it is contrary to the attitude, mindset, needs, desires and personality of the selector/strategist himself.
Who makes the final strategic choice?
Though top management makes the final strategic choice, yet lower-level managers influence the choice process in a significant way, as observed in Bower (1970). Final strategic choice is never based on all strategic alternatives. Subordinates limit the strategic alternatives at different levels by doing a lot of filtering before they go to the top.
Why is availability important in strategic planning?
Availability of information is a crucial factor in the choice of strategy. Managers choose a strategic option on the basis of relevant data and information. The degree of uncertainty and risk depends upon the amount of information that is available to the strategist.
How is choice of strategy influenced by power play?
Choice of strategy is also influenced by the power play among different interest groups. William Guth in his study found that strategic choice is significantly affected by interpersonal relations and power relationship among members of the top management team. Power politics is a crucial factor determining the choice of strategy.
What is strategic alternative?
They must assess a strategy’s compatibility with that culture. Every organisation has its own corporate culture. It is made of a set of shared values, beliefs, attitudes, customs, norms, etc. The successful functioning of an organisation depends on ‘strategy-culture fit’.
How is the attractiveness of a strategic alternative affected by its perceived compatibility with the key stakeholders in a corporation?
The attractiveness of a strategic alternative is affected by its perceived compatibility with the key stakeholders in a corporation’s task environment. Creditors want to be paid on time. Unions exert pressure for comparable wage and employment security. Governments and interest groups demand social responsibility. Shareholders want dividends. All these pressures must be given some consideration in the selection of the best alternative.
Which level of management can greatly influence the choice eventually made by the chief executive?
ii. Lower level managers can greatly influence the choice eventually made by the chief executive.
Abstract
- During hard economic times, businesses often turn back to obvious strategies given strengthening their survival. However, continuous plans should be adopted by businesses to shield them from unexpected uncertainties that may emerge during hard economic times such as recession. This paper discusses strategic choices that a business should strive to institute in it…
Current Economic Conditions
- Current economic conditions of businesses can broadly be grouped into two categories. The first category can be associated with macroeconomic recession and the second category is based on environmental thunderbolts, aggression or surprise. An environmental thunderbolt encompasses secular weakening in resources of a business entity as noted by Peng (2000). These two catego…
Strategic Choices For Businesses
- Strategic choices to influence businesses and their strategic goals to gain present and future objectives are diverse. First economic recession compels businesses to employ retrenchment strategies to aid in saving operational costs. Retrenchment entails aids in decreasing running costs and divestment of nonessential resources. Jansson (2008) states...
Conclusion
- Strategic alternatives can aid in driving a business to achieve economic success when created and practiced in tandem with what the business objectives entail. By applying strategies such as retrenchment, investment, market, organization and product and service quality, businesses can advance and develop by cutting spending, therefore, having economic security should it occur. E…
References
- Abrams, R., and Kleiner, E. (2003) The Successful Business Plan: Secrets & Strategies. Chicago: The Planning Shop. Blanchard, R. (2009) Creating Wealth with a Small Business: Strategies, Tactics and Models for Entrepreneurs. Massachusetts: Ralph Blanchard. Cantwell, J., and Narula, R. (2003) International Business and the Eclectic Paradigm: Developing the OLI Framework.New …