First, let’s understand the concept of strategy as a whole. The word "strategy" is often mentioned and used in a very wide range. "Strategy" here refers to the company's strategy. Corporate strategy can be divided into traditional strategy and modern strategy. The difference between the two mainly lies in whether it includes the end point and the way. The traditional strategy includes the way and the end point, emphasizing planning, overall and long-term nature. Modern strategy does not include an end point and emphasizes adaptability, competition and risk.
The company's mission and goals are also concepts that are often paid attention to. What is the company's mission? It is a summary of the company's nature and reason for existence, and includes three aspects: company purpose, company purpose and business philosophy. The purpose of the company is the specific embodiment of the company's mission in for-profit organizations and non-profit organizations. The purpose of the company is the positioning of the enterprise and the scope of business it chooses to engage in. The business philosophy is a high-level summary of the corporate culture, including corporate values, codes of conduct and basic beliefs. .
The company's strategic levels are divided into overall strategy, business unit strategy and functional strategy. The characteristics of strategic management are comprehensive, high-level and dynamic. The management process contains three key elements: strategic analysis, strategic selection and strategy implementation. Strategic analysis mainly includes two aspects: external analysis and internal analysis. External analysis is carried out from several aspects such as macro environment, industrial environment, competitive environment and national competitive advantage analysis. Internal analysis can be carried out from several aspects such as corporate resources and capabilities, value chain analysis, business portfolio, etc. Common analysis tools include Boston Matrix, Universal Matrix, SWOT.
How to choose a company strategy? From an overall strategic perspective, one can choose between a development strategy, a stabilization strategy and a contraction strategy. In terms of business unit strategy, you can choose basic competitive strategy, small and medium-sized enterprise competitive strategy and blue ocean strategy. In terms of functional strategy, it includes marketing, production operations, research and development, human resources and financial strategy. The selection methods can be divided into three methods: top-down, bottom-up and top-down combination. There are also three evaluation criteria for the selection plan: adaptability, acceptability and feasibility.
Modern strategy is adaptable and requires change management. The stages of change management development are divided into four stages: continuous stage, incremental stage, continuous change stage and comprehensive stage. Its types are also divided into four types: technological change, product and service change, structural and system change, and personnel change. Change often encounters obstacles, which come from inconsistencies in cultural concepts and the influence of personal interests. The reasons for resistance to change are divided into physiological changes, environmental changes, and psychological changes. How to overcome the obstacles you face? The strategy is to control the pace and scope of change and adopt dialogue, learning and communication methods.
After understanding what strategy is, let’s next understand the first process in the strategic management process, which is strategic analysis. Here we mainly introduce some analysis methods.
There are four methods for analyzing the external environment of enterprises: macro-environment analysis, industrial environment, competitive environment and national competitive advantage. Macro-environment analysis is analyzed from four aspects: politics and law, economy, society and culture, and technology. The industrial environment analysis is mainly based on the two dimensions of product life cycle and five industry competitiveness. Competitive environment analysis mainly includes competitor capability analysis and industry competitive strategic group analysis. The national competitive advantage analysis tool is the diamond model, which includes four elements: production factors, demand conditions, related and supporting industries, and corporate strategic structure competition.
There are four methods of enterprise internal environment analysis: enterprise resources and capabilities analysis, value chain analysis, business portfolio analysis and SWOT analysis. Enterprise resource and capability analysis is further divided into enterprise resource analysis and enterprise capability analysis. The criteria for judging enterprise resources are scarcity, inimitability, irreplaceability and durability. Among them, inimitability can be divided into physical uniqueness, path dependence, causal ambiguity and economic constraints. Enterprise capabilities refer to the enterprise's R&D, production management, marketing, finance, and organizational management capabilities. The criteria for identifying its core capabilities are whether it is valuable to customers, whether it has advantages over competitors, and whether it is difficult to imitate. Evaluation methods include internal benchmarks, competitive benchmarks, general benchmarks, customer benchmarks and process or activity benchmarks. Enterprise value chain analysis There are two types of activities and basic activities and supporting activities. Basic activities refer to: internal logistics, production operations, external logistics, marketing and services. Support activities refer to procurement management, technology development, human resource management and infrastructure. Enterprise value chain analysis includes three aspects: key activities, the relationship between internal activities, and the relationship between the system as a whole. Business portfolio analysis uses the Boston Matrix, which divides corporate business into four quadrants based on growth rate and market share: star business, problem business, cash flow business and thin dog business. The corresponding strategies are divided into: development, Keep, harvest and abandon strategies. SWOT analysis is divided into four dimensions internally and externally: strengths, weaknesses, opportunities, and threats. The corresponding strategic choices are growth strategy, diversified business strategy, turnaround strategy, and defensive strategy.
After strategic analysis, you need to choose a strategy. This is the third question: How to choose a strategy? Strategic choice is carried out from the strategic level.
The strategies selected from the overall strategic level are: development strategy, stabilization strategy and shrinkage strategy; the strategies selected from the business unit strategic level are: basic competitive strategy, small and medium-sized enterprise competition strategy, blue ocean strategy; the strategies selected from the functional strategy are : Marketing strategy, research and development strategy, production operation strategy, procurement strategy, human resources strategy and financial strategy; the final strategy chosen is the internationalization strategy.
Let’s expand to see what these strategies specifically include? Development strategies mainly include three basic types: integrated strategy, intensive strategy and diversified strategy. There are generally three options for development strategies: external development (mergers and acquisitions), internal development (new establishment) and strategic alliances. Integration is divided into vertical integration and horizontal integration. Intensive strategy is also called Ansoff's "product-market strategy combination", which is divided into four strategies: market penetration, market development, product development, and diversification from existing markets, new markets, existing products, and new products. There are three ways to shrink the strategy: retrenchment and concentration, pivot strategy, and abandonment.
In the business unit strategy level, there are three basic types of competitive strategies: cost leadership strategy, differentiation strategy and concentration strategy. The competition strategy of small and medium-sized enterprises mainly refers to the competition in scattered industries and the competition strategy of emerging industries.
The fourth question is how to implement the strategy? The following issues must be solved: first, establishing an effective organizational structure; second, effective management of personnel and systems; third, coordinating internal relationships; fourth, selecting appropriate coordination and control systems.
The organizational structure of an enterprise is divided into horizontal division of labor structure and vertical division of labor structure. What is the relationship between organizational structure and strategy? Chandler's theory analyzes two aspects: the leading nature of strategy and the lagging nature of structure. The corporate strategies and organizational structures chosen at different stages of development of the enterprise are different. The strategic types of organizations are divided into four types: defensive, pioneering, analytical and reactive.
The quality of strategy implementation is inseparable from corporate culture. Corporate culture represents the internal behavioral guidelines of the enterprise, regulating and restricting corporate managers and employees. Its types can be divided into four types: rights-oriented, role-oriented, task-oriented and people-oriented. From the perspective of strategic stability and cultural consistency, companies can choose from four strategic implementation plans: based on corporate mission, re-formulating strategies, strengthening coordination, and managing according to culture. The main methods for strategic coordination and control include budget control and the balanced scorecard method. The source of the rights of stakeholders in strategic management affects strategic decisions. The strategies for using rights are divided into five types: confrontation, reconciliation, assistance, compromise, and avoidance. Information technology also plays an important role in strategic management, which is reflected in the combination of information technology and competitive strategy, and the combination of information technology and enterprise value network. This forces companies to pay attention to the main aspects of strategic transformation and the difficulties faced by companies in the era of big data.
The final issue is the risks faced by the enterprise and the risk management strategy. What risks does the company face? From the perspective of external risks, they mainly include: political risk, legal risk, social and cultural risk, technical analysis, market risk; from the perspective of internal risks, they include: strategic risk, operational risk, financial risk, etc. There are seven strategic tools for risk management: risk taking, risk avoidance, risk transfer, risk conversion, risk hedging, risk compensation, and risk control. There are four measurement methods: maximum possible loss, probability value, value at risk and expected value. There are five elements to control risks: internal environment, risk assessment, control activities, information communication and internal supervision. Risk management measures are to use financial means to manage risks, including forward contracts, swap transactions, futures and options. Risk management techniques and methods can be divided into qualitative analysis and quantitative analysis. There are four types of qualitative analysis: brainstorming method, Delphi method, flow chart analysis method, risk assessment system diagram method; there are three types of quantitative analysis: Markov analysis method, Sensitivity analysis method, decision tree analysis method; There are four types of combined qualitative and quantitative analysis: failure hazard risk method, scenario analysis method, event tree analysis method, and statistical analysis method.
The above is a summary of the structure and logic of the strategy course. Let us have an overall understanding of what the strategy course covers and what is the relationship between them.