For-Profit Organization (Business) Strategy

A For-Profit Organization (Business) Strategy is an organizational strategy for a business organization.

• Context:
  • It can (typically) define its Value Proposition (a valuable market position).
  • It can (typically) define the intended Customer Segments.
  • It can (typically) define the required Business Capabilities
  • It can (typically) define the required Business Resources
  • It can (typically) define the required Business Partnerships.
  • It can (typically) define how Value will be captured via the Revenue Model and Cost Structure.
  • It can (often) identify Competitors.
  • It can (often) be an input to Business Strategy Execution.
  • ...
  • It can range from being a Differentiated Business Strategy to being an Undifferentiated Business Strategy based on the degree of uniqueness in its market positioning, value proposition and activities relative to competitors.
  • It can range from being an Innovative Business Strategy to being an Imitative Business Strategy based on the extent to which it pioneers entirely new offerings, experiences and business models versus incrementally improving on existing ones.
  • It can range from being a Proactive Business Strategy to being a Reactive Business Strategy based on whether it anticipates and leads market shifts or adapts in response to them.
  • It can range from being an Effective Business Strategy to being an Ineffective Business Strategy based on its likelihood of achieving sustainable competitive advantage and intended performance goals.
  • It can range from being a Long-term Business Strategy to being a Short-term Business Strategy based on its time horizon and orientation towards near-term versus long-term objectives.
  • It can range from being a Broad Business Strategy to being a Narrow Business Strategy based on the scope of its target market and diversity of segments/product lines covered.
  • It can range from being a High-risk Business Strategy to being a Low-risk Business Strategy based on the size of bets made and uncertainty of outcomes.
  • It can range from being a Cost Leadership Business Strategy to being a Differentiation Business Strategy based on its emphasis on price and cost control versus proprietary value creation levers.
  • It can range from being an External Business Strategy to being an Internal Business Strategy based on its focus on market positioning versus operational excellence.
  • It can range from being a Complex Business Strategy to being a Simple Business Strategy based on the intricacy of strategic logic and number of interdependent components involved.
  • It can range from being an Idealistic Business Strategy to being a Pragmatic Business Strategy based on whether it is guided by ambitious vision or constraints of practical execution.
  • ...
  • It can enable the ranking of Organizational Initiatives and choosing "what not to do."
  • It can be “an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.” (Lafley & Martin, 2013).
  • …
• Example(s):
  • Product and Innovation Strategies:
    • a Product-Company Business Strategy, such as Apple's product business strategy, which focuses on delivering exceptional user experiences via tightly integrated Apple hardware, Apple software, and Apple services.
    • an AI Strategy, such as Google's AI strategy, which emphasizes AI-first business development and investment in machine learning research to expand AI capabilities.
    • a Long-Term Product Strategy, such as Intel's long-term product strategy, which emphasizes continuous innovation and development of cutting-edge semiconductor technology to maintain its competitive advantage.
    • a Product-Led Growth Strategy, such as Dropbox's product-led growth strategy, which leverages a high-quality user experience and a freemium model to drive organic customer acquisition.
    • a Differentiation Business Strategy, such as Tesla's differentiation strategy, which focuses on technological innovation, unique design, and sustainable energy solutions.
    • ...
  • Market Disruption Strategies:
    • a Services-Company Business Strategy, such as Uber's business strategy, which disrupted traditional transportation by using a shared-economy model and app-based ride-hailing.
    • a Disintermediation Strategy, such as Dell's disintermediation strategy, which uses a direct-to-customer sales model and build-to-order manufacturing to eliminate intermediaries.
    • a Digital Transformation Strategy, such as General Electric's digital transformation strategy, which focuses on the Industrial Internet of Things (IIoT) and predictive maintenance for operational efficiency.
    • ...
  • Marketing and Sales Strategies:
    • a Go-to-Market Strategy, such as Slack's go-to-market strategy, which focuses on a freemium model to encourage widespread team communication adoption.
    • a Marketing Strategy, such as a Content Marketing Strategy, where value-driven content creation is used to engage a specific target audience.
    • a Sales Strategy, such as Salesforce's sales strategy, which emphasizes a customer-centric approach through extensive use of customer data, personalized outreach, and relationship management.
    • a Pricing Strategy, such as a Penetration Pricing Strategy, where a low initial price is set to rapidly attract customers and gain market share.
    • a Distribution Strategy, such as an Exclusive Distribution Strategy, where a company limits distribution to a few selected retail outlets to create a premium brand image.
    • ...
  • Operational and Growth Strategies:
    • a Data Strategy, such as Netflix's data strategy, which leverages big data analytics to optimize content recommendation and enhance user engagement.
    • an Outsourcing Business Strategy, such as IBM's outsourcing strategy, which involves outsourcing non-core business processes to external service providers.
    • a Cost Structure Strategy, such as a Fixed Cost Structure Strategy, which emphasizes maintaining a stable base of fixed costs to ensure predictable financial planning.
    • a Mergers and Acquisitions (M&A) Strategy, such as Disney's M&A strategy, which strategically acquires media assets and franchises to expand its content library.
    • a Scenario-Based Planning Strategy, such as Shell's scenario planning strategy, which uses diverse future scenarios to guide long-term decision-making.
  • …
• Counter-Example(s):
  • a Business Tactic or a Business Plan.
  • a External Environmental Challenge.
  • A Marketing Tactic, like a short-term promotional campaign.
  • A Corporate Strategy that covers multiple business units.
• See: Strategic Planning, Strategy Formulation, Strategy Execution, Competitive Strategy, Business Model, SWOT Analysis, Strategic Management, Factors of Production, Core Competence, Product Roadmap.

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References

2022

• (Wikipedia, 2022) ⇒ https://en.wikipedia.org/wiki/Strategic_management Retrieved:2022-8-14.
  • In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessment of the internal and external environments in which the organization operate. Strategic management provides overall direction to an enterprise and involves specifying the organization's objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision-making in the context of complex environments and competitive dynamics. Strategic management is not static in nature; the models can include a feedback loop to monitor execution and to inform the next round of planning. Michael Porter identifies three principles underlying strategy:
    • creating a “unique and valuable [market] position”
    • making trade-offs by choosing "what not to do"
    • creating "fit" by aligning company activities with one another to support the chosen strategy

      Corporate strategy involves answering a key question from a portfolio perspective: "What business should we be in?" Business strategy involves answering the question: "How shall we compete in this business?"

Management theory and practice often make a distinction between strategic management and operational management, with operational management concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization's strategy.

2016

• (Ignatius, 2016) ⇒ Adi Ignatius. (2016). “We Need to Intensify Our Sense of Urgency: An Interview with Meg Whitman". In: Harvard Business Review.
  • QUOTE: I learned how to do strategy for nine years at Bain, and it has stood me in good stead, because there’s a formula for it. It’s all about who your customers are, who your competitors are, what cost structure you need, and what things you are not going to do. That is the most difficult decision for companies, because we all have eyes that are bigger than our stomachs.

2013

• (Lafley & Martin, 2013) ⇒ A.G. Lafley and Roger L. Martin. (2013). “Playing to Win: How strategy really works." In: Harvard Business Press.
  • BOOK OVERVIEW: Playing to Win outlines the strategic approach Lafley, in close partnership with strategic adviser Roger Martin, used to double P&G’s sales, quadruple its profits, and increase its market value by more than $100 billion when Lafley was first CEO (he led the company from 2000 to 2009). The book shows leaders in any type of organization how to guide everyday actions with larger strategic goals built around the clear, essential elements that determine business success where to play and how to win.
  • QUOTE: ... strategy is about making specific choices to win in the marketplace. According to Mike Porter, author of Competitive Strategy, perhaps the most widely respected book on strategy ever written, a firm creates a sustainable competitive advantage over its rivals by “deliberately choosing a different set of activities to deliver unique value.”1 Strategy therefore requires making explicit choices—to do some things and not others—and building a business around those choices.2 In short, strategy is choice. More specifically, strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition. ...

2010

• (Teece, 2010) ⇒ [[DJ Teece [[(2010). “Business Models, Business Strategy and Innovation." In: Long Range Planning.
  • QUOTE: "The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory."

2006

• (Forecast2020, 2006) ⇒ Economist Intelligence Unit. (2006). “Forecast 2020." (website)

2004

• (Stalk et al., 2004) ⇒ George Stalk, Robert Lachenauer, and John Butman. (2004). “Hardball: Are You Playing to Play Or Playing to Win?”. Harvard Business Press,
  • BOOK OVERVIEW: Great companies stumble and fall when they lose it. Highfliers crash when a competitor notices they don't have it. Start-ups shut down if they can't develop it. “It" is a strategy so powerful and an execution-driven mindset so relentless that companies use it to gain more than just competitive advantage--they achieve an industry dominance that is virtually unassailable and that competitors often try to explain away as unfair. In their "hardball manifesto," authors George Stalk and Rob Lachenauer of the leading strategy consulting firm The Boston Consulting Group show how hardball competitors can build or maintain an enviable competitive edge by pursuing one or more of the classic "hardball strategies": unleash massive and overwhelming force, exploit anomalies, devastate profit sanctuaries, raise competitors' costs, and break compromises. Based on 25 years of experience advising and observing a range of companies, the authors argue that hardball competitors can gain extreme competitive advantage--neutralizing, marginalizing, or even destroying competitors--without violating their contracts with customers or employees and without breaking the rules. A clear-eyed paean to the timeless strategies that have driven the world's winning companies, Hardball Strategy redefines and reinterprets the meaning of competition for a new generation of business players. George Stalk and Rob Lachenauer are directors of The Boston Consulting Group. Stalk is the author of Competing Against Time, the classic work on time-based competition.

1998

• (Rumelt, 1998) ⇒ RP Rumelt (1998). “Evaluating business strategy." In: Mintzberg H, Quinn JB, Ghoshal S., The Strategy ...
  • QUOTE: ... business strategy is optimal or even to guarantee that it will work. One can, nevertheless, test it for critical flaws. Of the many tests which could be justifiably applied to a business strategy ..."

1989

• (Shapiro, 1989) ⇒ C Shapiro (1989). “The Theory of Business Strategy." In: The Rand journal of economics.
  • QUOTE: "The diversity of predictions in different game-theoretic models reflects our broadening understanding of business strategy. With our new game-theoretic tools, we can carefully analyze a ..."

1984

• (Aaker, 1984) ⇒ DA Aaker (1984). “How to select a business strategy." In: California management review.
  • QUOTE: "A business strategy has two core elements. The first is the product-market investment decision which includes the product-market scope of the business strategy, its investment intensity..."

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