BMAN73561 International Business Strategy
This template can be used to structure your answer to LO4 which requires you to produce a strategic plan.
One way to think about strategic planning is that it identifies any gaps between a current state and desired future state, and then dictates how to close those gaps – how to get you from where you are now to where you want to be. To that end, various factors are taken into consideration in order to formulate an effective plan:
Executive Summary – A concise, carefully worded summary of the key points of the plan. This enables interested parties – employees, investors or other readers to quickly understand and assess the plan. Often written after the main components of the plan have been defined.
Organizational Structure – Include this information if it’s relevant to evaluate how your business or organization operates and is structured – from governing body to staffing.
Mission Statement – A mission statement describes the purpose of a business or organization, why and how it operates. This is distinct from a vision statement.
Vision – A vision statement is an aspirational ambition that concisely describes what a company wants to achieve or become in three to five years.
Values – These are the principles that an organization stands for and abides by. Many businesses create core value statements to guide company culture and Corporate Social Responsibility policy.
Macro environmental analysis – PESTLE + SWOT (focus especially on opportunities and threats posed by the macro environment. Remember most companies cannot change the macro environment but they can and must decide how to respond to it.
Internal analysis of organisational strengths and weaknesses: SWOT Analysis – A SWOT analysis provides a foundation for developing strategy by assessing the strengths and weaknesses within an organization as well as external opportunities and threats. VRIO analysis, and the McKinsey 7 S framework can also be applied to assess internal capabilities.
Competitor analysis – Apply Porter’s Five Forces Analysis and Porter’s ‘Generic Strategies’.
Market analysis – Using a choice of tools, e.g., Ansoff Matrix, Bowman’s Strategy Clock.
Portfolio Analysis – e.g. using the BCG matrix to identify ‘Rising Stars’, ‘Dogs’ and ‘Cash Cows’
SMART Strategic Objectives – Strategic goals should be broken down into SMART objectives which specify who is responsible for implementing the objective and a timeline for starting and ending the action. Objectives are frequently expressed in: financial terms (e.g. desired profit levels) market terms (e.g. desired market share) and increasingly social terms (e.g. corporate social responsibility targets).
Resource Implications: You do not need to produce a detailed budget but you must identify resourcing changes that are required to implement your objectives, e.g. borrowing more money to expand; getting rid of staff if you are retrenching, recruiting more staff if you are growing; additional marketing funding to promote a new product or service.
Evaluating and monitoring the plan – Methods for evaluation should be spelled out in the strategic plan. This could include tracking key performance indicators (KPIs) and documenting the progress of action steps on an ongoing basis. You can use the SAF model to evaluate your strategic plan: is it:
Suitability: Suitability Is Probably The Most Important Factor In The SAF Strategy Model, As An Option’s Suitability Is The Key To Whether Or Not The Strategy Will Do What The Company Wants It To Do. In Order To Assess The Suitability Of A Strategy The Business Should Be Asking Questions Such As “Does The Strategy Use The Company’s Strengths Effectively?”, “Does The Strategy Overcome The Difficulties Which Were Identified In The Analysis?” And “Does The Strategy Fall In Line With The Goals The Business Wants To Achieve?”
Appropriate: The acceptability aspect of a SAF strategy model is all about measuring the return, risk and stakeholder reactions resulting from a particular strategy. Returns will be measured based on the benefits that stakeholders expect from the strategy and could be financial as well as non-financial, depending on what the stakeholders decide. Returns calculations can be performed by any number of methods such as cost-benefit analysis, profitability analysis, real-options analysis and shareholder value analysis.
Feasible: The feasibility aspect of the SAF strategy model is really the make or break of any strategy. Whether or not the business has the resources, aptitude and abilities to actually implement the strategy is key to its success, therefore financial feasibility needs to be assessed by forecasting and analysing cash-flows, performing break-even analysis and a number of other financial tests. An easy way to remember everything you need to assess for feasibility is to use the M-word model: machinery, management, money, manpower, markets, materials and make-up.