Process for Crafting a Strategy
Essay title: Process for Crafting a Strategy
A strategy for a company lays out how a company is going to fulfill short term and long term goals that are hopefully promoting and furthering the company toward their vision. There are five key steps in order to create and execute a strategy successfully. The first step is to decide what the vision of the strategy is and how that will affect the multiple areas of the business including marketing and possibly the actual product. This will give the overall goal of the strategy and hopefully the ultimate result of the company. An example of this is Starbucks. They have multiple goals and outline their goals using their mission statements for the different strategy. The second step is to decide on how this goal will be accomplished. This could be the principles of the mission statement that state what they are going to accomplish and then how they will measure success.
The third step is to create the actual strategy to get to that goal. This is a strategy that hopefully can react as well as be proactive in how they respond to changes in the external and internal environment. The fourth step is actually implementing the strategy and putting the staff and managers on the front lines to achieve the goals of the strategy. This is where the operations side of the business is really put to the test and the planning of the strategy becomes essential. The last step is to determine how the process went and how the implementation of the strategy went throughout the company. This is where management and the authors of the strategy make needed changes throughout their company. Starbucks has a clearly outlined mission statement and principles however they donŠ²Šā¢t have a strong way of measuring their strategy in regards to a couple of their strategies.
PorterŠ²Šā¢s five generic strategies
The five generic strategies are strategies that are enhanced depending on the needs of the company however they are the five standard ways to try and create a competitive edge. The five strategies are being a low cost provider strategy, broad differentiation strategy, best cost strategy, market niche strategy using low cost, or a market niche strategy based on differentiation. These strategies can be found in the text book on page 134 and 135.
The first strategy is to be the lowest provider for a product that is needed and find ways to almost eliminate their costs in order to make a profit. This cost lowering is essentially because otherwise they are unable to make a profit if they sell their product as such a low price. An example of this type of business would be Wal-Mart or a 99 cent store. The second strategy is broad differentiation and it markets and targets customers that are looking for a different specialized product. They will be in the same market as some competitors however they will be looked at as having a higher quality and more expensive product. An example for this is Rolex, Mercedes or Coach.
The third strategy is best cost strategy and it is to market as the provider of quality products at a low price while in the same market as their competitor. An example might be Arco. They have the same product as Chevron or Mobile however they are a lot cheaper in their market.
The fourth and fifth strategy are similar in that businesses with this strategy will market in a niche market however for strategy number four they are marketing based on low cost theory. The difference between this strategy and the first strategy of the low cost provider is that the first strategy is utilizing a customer base that is broad and includes everyone whereas the fourth strategy is only marketing to a smaller more specialized market. An example would be a bakery supplier to a store chain that supplies that chain with a private label. They donŠ²Šā¢t have a lot of marketing costs and are a single niche product. The last strategy is the niche market as well however they make their products different and more specialized than their competitors and therefore are able to sell them at a higher price. Starbucks is an example of this type of strategy.
Upon what criteria and using what process would you evaluate ethical principles and socially responsible management practices?
Overall a company needs to be ethical in their strategies and decision making because it will reflect on their reputation and they will lose profits. It also needs to be ethical for moral reasons as well. The criteria that I would use and the process that I would use to determine if a company is using ethical principles is intertwined so I will suggest in stages what I would do. I believe that it starts first with who the top management and the board of directors hire as their managers