Business Strategy and Strategic Management

• Business
• Secondary Education

Business Strategy and Strategic Management

Learning Objectives

• Understand the concept of business strategy and its significance in achieving business objectives
• Comprehend the process of strategic management and its stages
• Distinguish between strategic and tactical decisions

What do you already know about business strategy and strategic management?

Business strategy asks the big questions, such as, ‘Which markets and products do we want to be in?’ It also makes the big decisions, such as, ‘Can we expand from manufacturing operations into retailing?’ All businesses need strategies to provide integration, direction and focus.

Definitions

• Business Strategy: A plan and set of policies aimed at achieving business objectives
• Tactical Decisions: A short to medium term decision that is reversible and is made by less senior managers

Introduction to Business Strategy

• Business strategy is a plan and set of policies aimed at achieving business objectives
• Influenced by resources available, business strengths, competitive environment, and business objectives

Business Strategy: Resources available

• Business resources are finite.
• Limited resources force a business to choose which strategies to proceed with, and which to drop or scale back. 
• For example, the strategy of launching a new product nationwide may have to be scaled back because of lack of resources.

Business Strategy: Business Strengths

• If a business has proven capabilities in certain areas, it might try to apply these strengths when developing future strategies. 
• A long-term plan takes a business away from a proven area of operation may require business skills and experience that it does not have. The expansion of the business may be best achieved if some underperforming areas (or non-core businesses) are sold off. The business will then focus on its current successes to achieve growth. 

Establishing Business Strategy

• Strategic management is a process that involves strategic analysis, strategic choice, and strategic implementation
• Strategic analysis assesses the current position of the company
• Strategic choice involves making long-term decisions
• Strategic implementation is about allocating resources to put decisions into effect

Strategic Management: Meaning and Purpose

• Strategic management is crucial for planning for the future
• Responding to the changing business environment
• Making effective long-term decisions

Strategy and Tactics

• Difference lies in scope, reversibility, decision-makers, and impact
• Strategic decisions are long-term and made by directors or senior managers
• Tactical decisions are short to medium term and made by less senior managers

Definition List

• Strategic Management: A process that involves strategic analysis, strategic choice, and strategic implementation

The Need for Strategic Management

• Planning for the future
• Responding to the changing business environment
• Making effective long-term decisions

What should a business do if it lacks resources?

1. Develop new strengths
2. Sell off underperforming areas
3. Scale back strategies
4. Expand the business

What did Pepsi do after purchasing Quaker Oats?

1. Sold off the breakfast cereal division
2. Launched a new product nationwide
3. Scaled back their strategies
4. Focused on soft drinks

What influenced Esso's strategy change in selling petrol?

1. Competitors' actions
2. Expansion of the business
3. Limited resources
4. Price reductions by supermarkets

What might a business prioritize if it aims for the triple bottom line approach?

1. Increasing returns to shareholders
2. Clear social responsibility objective
3. Extensive research and development
4. Maximizing returns to shareholders

What is the main purpose of strategic analysis?

1. Assessing the current position of the company
2. Allocating resources for implementation
3. Setting long-term objectives
4. Evaluating the success of strategies

What is the main purpose of strategic choice?

1. Allocating resources for implementation
2. Taking important long-term decisions
3. Assessing the current position of the company
4. Evaluating the success of strategies

What is the main purpose of strategic implementation?

1. Allocating sufficient resources to put decisions into effect
2. Taking important long-term decisions
3. Evaluating the success of strategies
4. Assessing the current position of the company

What are the three key questions of strategic analysis?

1. What are the objectives of the business?
2. How might the business be affected?
3. Where is the business now?
4. How could the business respond to likely changes?

What is the main difference between strategic and tactical decisions?

1. Strategic decisions involve all major departments, while tactical decisions impact only one department
2. Strategic decisions are reversible, while tactical decisions are difficult to reverse
3. Strategic decisions are long term, while tactical decisions are short to medium term
4. Strategic decisions are taken by less senior managers, while tactical decisions are taken by directors and/or senior managers

Write down 3 things you learned in this lesson.

Have students enter three things they learned in this lesson. With this they can indicate their own learning efficiency of this lesson.

Write down 2 things you want to know more about.

Here, students enter two things they would like to know more about. This not only increases involvement, but also gives them more ownership.

Ask 1 question about something you haven't quite understood yet.

The students indicate here (in question form) with which part of the material they still have difficulty. For the teacher, this not only provides insight into the extent to which the students understand/master the material, but also a good starting point for the next lesson.