strategic business plan

strategic business plan

Developing a Strategic Business Plan

1. Introduction

The falling cost of hardware, software, and data acquisition has propelled the use of information technology to improve organizational performance. The increased use of information technology generated a need to utilize it effectively and develop competitive advantages through its application. Practitioners and researchers have developed and investigated methods for gaining competitive advantages using information technology ranging from developing information systems, reengineering business processes, and developing new business strategies. My research involves developing a method for utilizing information technology to develop a business strategy that will produce a significant competitive advantage. I aim to demonstrate that utilizing information technology to develop an information system that supports a specific business strategy provides a more focused approach and can produce superior results than developing information systems without a clear strategy in mind. The increased use of information technology and the increasing density of electronic markets has led to a need for companies to develop strategies to be able to achieve and sustain competitive advantages. IT spending has increased from $71 billion in 1985 to $300 billion in 1995, and is projected to reach $1.5 trillion in 2004. This drastic increase shows the growing importance of IT in today’s business world. It has become a necessity as opposed to a strategic weapon used by companies to survive and compete in today’s market. But simply implementing IT does not ensure that a company will be able to achieve a competitive advantage. War games and various simulations have demonstrated that a company must have a strategy and be able to use IT to support that strategy in order to achieve a sustainable competitive advantage over its rivals.

2. Setting Business Goals

Some guidelines for identifying your company’s initial goals. This word is used most frequently when the company is preparing to do strategic planning for the coming year or the next few years. The first time that the top managers will use the list of goals will be in setting the strategic direction for the company. Each of the goals should be used as the primary focus of a strategic management of planning conference. At that conference, each manager who is responsible to make contributions to that particular area will be asked to propose 4 to 5 possible strategic projects, which if successfully accomplished, would result in the attainment of the goal. By using projects and implementation of the strategy toward the goal, this is a way an intended strategy to be used ahead the company. Remember that you must understand first about how to set correct, possible, and realistic goals. This can be realized if everyone involved in the making of the mission statement and goals. Because nothing is more important than to have people participate in a plan that will affect their collective futures, you should see high-quality interaction among various groups grist for achieving a common direction. All these changes can be done by identifying single goals that are called by the simplest desired result.

3. Analyzing the Market

Defining the market begins the strategic analysis of where the company currently is or may be in the future. The purpose of the market analysis is to get a clear understanding of the market the business is considering entering. This step identifies the current and potential future size of the market both in volume of sales and money. It is also concerned with the competition and potential competition. This is because one of the business objectives for entering a new market is to increase market share. The best way to grow is taking it from a competitor. Understanding that market and the strategies used by existing firms can help identify potential market gaps that the newcomers can exploit. A market analysis also provides a clear understanding of what specific products are purchased in a market. This is important when we take into consideration who is likely to buy our product and what they look for from it. In essence, focusing on the firm’s target market. It is important to get a situational understanding of the market considering normal cyclical changes in sales, high and low growth periods, and the possibility of any market disruptions that may cause a change in market behavior. The best way to represent all these elements is through the use of a SWOT analysis of the market. This may seem similar to the analysis of a specific firm but is slightly varied considering this information applies to any firm operating in that market. An extensive analysis will help identify where the greatest opportunities and threats lie and what weaknesses and strengths the market contains offer to any firm. An efficient market analysis can save time and money investing in a market that is completely void of any opportunity, or inversely see high potential and decide to enter a market despite industry threats and high competition.

4. Creating a Competitive Strategy

A competitive strategy explains the basis on which a business will compete in the future. Corporate and SBU level strategies are the same. The competitive strategy provides the framework for identifying which the business will operate in and out point of the business world. The competitive strategy consists of the business mission, objectives for the mission, the business portfolio, and the methods of businesses marketing activities. This is the logic of why one approach will lead the company to success and another will complete failure. This strategy requires the company to operate in an in and out marketplace and function around strong and weak competitors. This is what differentiates it from the company’s generic strategy where it will simply engage in its current activity regarding how the company currently competes. The competitive strategy consists of all the moves and changes made on the business of industry. Often the purpose is to outperform competitors in the industry by employing a strategy around differentiation that will lead to competitive advantage. Though competitors may easily imitate or duplicate a company, it can gain sustainable competitive advantage if it’s implemented in a way that these very competitors can’t catch up to or they themselves lack the resources to simulate. The company would take into account its core competencies, which are capabilities and resources that are important in determining the competitive alternative of an enterprise. At the micro level, a company can build competitively to gain an advantage in a business area. This is compared to involving a strategy involving an SBU competing within the overall corporation. An SBU can use functional marketing and brand building to develop strategic assets allowing it to move into a higher business. The final aim of the competitive strategy is to build a wall around the position of the company to defend it and better its rivals in the long term.

5. Implementing and Evaluating the Plan

Formulating and implementing a well-conceived strategy can be the most gratifying part of strategic management. But all too often the best laid plans go to waste. Research has shown that two thirds to three quarters of large organizations struggle to turn strategies into results. Implementing a strategy to achieve a sustainable competitive advantage is often a dynamic and iterative process. The dynamic and iterative nature of strategy implementation means it is not always clear what has caused success or failure. Assuming everyone knows exactly what has occurred is unrealistic. Usually, the process does not take the clean straight path that was anticipated. It is thought of in terms of emergent strategy and the process that a plan will go through to implementation is just as important as the strategy itself. This is due to setting clear measurable objectives and finding out the best means of achieving the objective is both part of the planning and the action itself. So we must consider the plan as the actions. It is possible to consider the action failed without having achieved the desired outcome. In the same respect, it is possible to complete an action successfully but for it to have been the wrong thing to do. This is due to the various constraints on organizations and the environment, which is still just as apt for what is known as strategic marketing. On many occasions, multiple outcomes will be generated from a single action. The effectiveness of this action can only be judged in terms of whether the desired outcome was achieved.