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Online Business Strategy

It is need of every business to follow a particular strategic plan for getting the desirable outcome for which the business set-up has established. This is the need of every business whether a business is still just starting out or has already founded a strong foundation, it always needs some form of guidelines to be followed as how it should be conducted in order to further strengthen its performance. The need to follow a strategic plan becomes more important for the companies who are promoting their business using Online mode of advertising. Online business in other words can be termed as E-commerce.

E-commerce: Electronic commerce is the paperless exchange of business information using electronic data interchange (EDI), e-mail, electronic bulletin boards, fax transmissions, and electronic funds transfer. It refers to Internet shopping, online stock and bond transactions, the downloading and selling of “soft merchandise” (software, documents, graphics, music, etc.), and business-to-business transactions.

The Internet is a reasonable alternative to all of those means of communication. Any place and any way that your business communicates with its customers, you should think about how you could have done it online. That is the power of e-commerce.

Strategy: A course of action, including the specification of resources required, to achieve a specific objective. The term was originally used in the context of warfare to describe the overall planning of a campaign as opposed to tactics, which enable the achievement of specific short-term objectives. The overall strategy of an organization is known as corporate strategy.

Online Business Strategy: Internet marketing, also referred to as online marketing or Emarketing, is the marketing of products or services over the Internet. Internet marketing is the process of growing and promoting an organization using online media. An Internet marketing strategy includes all aspects of online advertising online activity that promotes a company online, including websites, blog sites, article and press releases, online market research, email marketing, and advertising (ppc / banners etc.)

A long-term approach to implementing a firm’s business plans to achieve its business objectives using internet as media is called as online business strategy. A business strategy is an  overall longer-term policy for a firm that coordinates the separate functional areas of a business. It defines the business objectives, analyses the internal and external environments, and determines the direction of the firm. Each firm operates in a competitive environment and seeks to formulate a strategy that will provide it with an advantage over its rivals: design, quality, innovation, and branding are examples of ways in which it can make itself above from its competitors in the same field.

Following are some of the Decisions one has to make while opting for Online Marketing Strategy
1 Target Market Strategies: The very first decision in online business is the evaluation and selection of appropriate segment of market where the company wants to sell its products and services. In an Internet context, organisations typically target those customer groupings with the highest propensity to access, choose and buy online. Segments for targeting online are selected which are most attractive in terms of growth and profitability. This may mean finding ways to further penetrate your current markets and gaining additional market share from competitors. You may need to look to other geographical areas that need your products or services, or perhaps you need to tap into a new demographic.
2Positioning & Differentiation Strategies: In an online context, retailers can position their products relative to competitor offerings according to four main variables: product quality, service quality, price and fulfillment time. They suggest it is useful to review these as an equation of how they combine to influence customer perceptions of value or brand. More focus put on these factors should result in more sales of the products and hence more are the profits.

3 Market & Product Development Strategies: E-commerce also offers opportunities to expand the scope of a business into new markets and products. The Ansoff matrix is still useful as a means for marketers to discuss market and product development using electronic technologies. It highlights these options.

(a) Market Penetration: Digital channels can be used to sell more existing products into existing markets. This is a relatively conservative use of the Internet.

(b) Market Development: Here online channels are used to sell into new markets, taking advantage of the low cost of advertising internationally without the necessity for a supporting sales infrastructure.

(c) Product Development: New digital products or services can be developed that can be delivered by the Internet. The new products can also be developed on the basis of feedback of the consumers so as to formulate the product as per the specifications demanded by the consumer. Growth strategies in business often are a result of new products and services. If you find that your current offerings have reached a plateau of sales, look into developing new products or expand your service offerings. Consider products or services that complement your current ones, allowing you to generate more sales from your existing customer base.

4 Organizational Restructuring: Organisational structure decisions form two main questions. First, is how should internal structures be changed to deliver e-marketing and second how should the structure of links with other organisations be changed to achieve e-marketing objectives? Such decisions should balance the benefits of the changes against the disruption to business operations caused by the changes.

5 Enhance Productivity: It may be time to acquire additional financial capital and expand your productivity to meet your small business growth strategies. Look for small business loans, grants, and other investors who can contribute capital to help you acquire additional equipment, space, and even staff to help your productivity soar. Be sure you have a solid marketing plan as part of your small business growth strategy to sell your additional products.

Tips for Using Online Business Strategy Effectively

In an online business the firm owners have to follow some tips, using these tips they can be able to generate more sales online, using internet. The virtual entrepreneur must be able to relate to customers and potential customers without ever meeting them face to face. This means the website must emanate a degree of trust and reliability all on its own.

Providing a valid e-mail address so that the consumers and potential consumers can post their queries at any time to get appropriate answers for their queries. This may enhance more reliability.

Providing the photograph of the site owner may also enhance the reliability. It provides a sense of belongingness between consumers and the owner of the website.
If anyone is  running an online business website adding a blog alongside the site can be a great idea. Not only will your website benefit from better SEO due to the regular updating and indexing of the content on the blog but your writing can help to bring you closer to your target audience. You can blog about issues related to your business and use the blog as a means to answer queries or speak about popular topics that affect your industry.

Customer testimonials can help to generate the trust of others who are considering buying your product or service, but they can also be overdone to look like a hard sell spamming technique. If they are used sparingly and chosen wisely though they can create a great effect.

Business Trends and Message Types

Business communication has evolved greatly throughout centuries and continues to change at fast speeds. Relaying messages in a professional setting are vital to the production and life of an organization. Business communication plays a role in day-to-day activities at work, business trends may be observed, and message types may vary as a result from business communication trends.

            Communication can be verbal, non-verbal, and written. Verbal communication in a business setting is the most personal as it displays inflections, dialects, and diction. Verbal communication is the first communication form of each day for me at the office. When I enter into the five story corporate building in the a.m., potential communication is always anticipated. Elevator talk, passive greetings, and non-verbal communication are displayed within the business building. One entered into the office, a greeting is made to the corporate secretary as I walk to my executive office with a view. Late emails are answered and voicemails are returned after checking the fax machine for submissions while sipping on a cup of Starbucks coffee. My day has begun. Business communication plays a vital role in my day-to day activities at work. Within the first fifteen minutes of my work day, I have potentially communicated verbally, non- verbally, through the telephone, fax, and through electronic mail (email). Business communication allows me to manage my work day more efficiently. Faxed statements from local entities prevent lengthy wait times for postal mail shipments. Email allows me to send documents, receive documents, and relay messages at the click of a button. Additionally email can send bulk memos to inform a large audience of procedural updates and other applicable data.  Once an email is started, a simple reply is required to continue communicating. The telephone is a wonderful way to speak with clients, candidates, and other business to business (b2b) entities. The efficiency of business communications is the greatest asset.

            Business trends are generally regional and standardized. When technology is released, most business entities adapt. In business, I have noticed a growing use for PDA cellular devices and laptop computers for sales representatives in most major industries. For the small business, fax machines are becoming optional with the ability and growing demand for scanners and email attachments. Interoffice mail is also a new trend for modern corporations where individual postage is not necessary and mailstops replace the physical address on a package. Other business communication trends are in relation to the business-client relationship. The social networking trend has dominated the business industry as millions of businesses and business persons create an online profile in hopes of building their brand and offering heightened presence. The original trend was business cards, then a website, now a social networking profile. Business cards have also changed faces as the standard business card is seemingly frowned upon and must be updated with innovative design and unique construction including materials.  Business marketing is the primary source for business communication while building a brand and has also evolved. Today, vehicles can be wrapped in an advertisement to be viewed during normal driving situations. Direct mail campaigns are also a growing trend by comparison to the 1950′s where junk mail was simply unheard of.   

            “The four levels of information richness in business communication are as follows: face-to-face communication, spoken communication electronically transmitted (telephone or voicemail), personally addressed written communication (personal messages), and impersonal written communication (impersonal messages)” (Consador, 2010). The aforementioned levels are also message types that result from business trends in which most all business communications will result. For example, the trend of PDA cellular devices as a form of business communication will result in telephone communication, email, instant message, or text message.

            To communicate within business, it is important to observe ethical standards. Corporations and other business industry organizations compete for highest profits or largest market shares which has weighed management down with a heavy burden to meet or exceed financial projections implemented by an organization’s intelligence. When a manager operates with the trait of applying clear goals and direction, success may abound through the clarity of expectations. Clear goals and direction is always communicated and therefore highly regarded to the success of the organization itself. Communication is how business transpires. Effective management occurs when management and their subordinates operate within productive communication relationships that produce a desired or exceeded outcome.

Consador, Kat. (2010). Four Types of Business Communication. Retrieved December 13, 2010    from,

 

 
 
 
 
 
 
 
 

Careers with a Business Administration Degree

Are you a natural leader and a gifted communicator? Do you have excellent analytical and logical ability? Are you a people’s person with above average interpersonal skills? Have you won awards or accolades for your organizational expertise? If your answer to all the above questions is a resounding yes, then you may be the ideal candidate for a Business Administration degree.

While traditionally a Business Administration degree was the exclusive reserve of the creme-de-le-creme of the corporate world, that’s no longer the case.

The biggest indicator of the fact that business education is no longer the right of a privileged few is the availability of this degree at Bachelor’s level. The assumption is that the prospect may not have the relevant experience or exposure to the industry but has the drive to learn and make it big in the business world!

A Bachelor’s of Business Administration degree is a typical four-year program that will prepare graduates for entry-level managerial roles in various business fields depending on their interest and area of specialization. Here’s an overview of some of the possible careers with a Business Administration degree:

Sales and Marketing: Although often spoken in the same breath, sales and marketing are actually two divergent fields of business. Broadly speaking, the primary objective of a sales manager is to sell a product or service to the target consumer. Developing sales strategy, training and mentoring sales reps, and setting and reviewing sales targets are some important duties of a sales manager.

The core job of a marketing manager, on the other hand, is to drive the strategy for first identifying what people need, working with the product development team to develop the product with desired features, pricing it correctly, and then promoting the product (or service) amongst its target audience.

Human Resources: This branch of business is focused on the most valuable asset of an organization, namely, its people. Human resources management involves recruitment and management of an organization’s employees and includes activities such as staffing, establishing company policies, managing employee benefits and compensation, dealing with performance issues, working on employee training, benefits, and motivation programs, etc. Administration skills combined with a “people’s” personality can make one an excellent human resources professional.

Financial Services: One of the most lucrative careers with a business administration degree is that of a financial manager. According to the Department of Labor, the duties of a financial manager include overseeing the preparation of financial reports, directing investment activities, and implementing cash management strategies. With a background in finance, you can find a broad range of employment opportunities in financial institutions like banks, insurance companies, credit unions, small businesses and large corporate houses, and state and federal agencies.

Accounting: Another career option you can explore with a Bachelor’s of Business Administration degree is that of a management accountant. Management or corporate accountants are the custodians of an organization’s financial health. Budgeting, cost accounting, asset management, financial reporting, financial planning, and tax planning are some of the responsibilities of a management accountant.

Real Estate: If you like to walk the road less traveled, real estate or property management is an interesting field of business you can explore. As a real estate manager, your clients will rely on you to manage the operations of a property and monitor its life-cycle from acquisition and utilization to maintenance and disposition. If you want to become a real estate manager, make sure your business administration program allows you to specialize in property management.

Health Services: Health service management is probably amongst the most rewarding careers with a Business Administration degree. The job of a health service manager is to take care of the administrative and business aspects of a healthcare unit to ensure the smooth delivery of primary patient care. Although a degree in healthcare administration ties in more closely with this field, those who have Business Administration degree with a concentration in healthcare administration may also qualify for the job of a health services manager.

While all these careers may be open to you with a Bachelor’s of Business Administration degree, what can really propel you on to high profile business positions is an MBA degree. A Bachelor’s degree will provide you with a perfect start, while a Master’s degree will ensure that you always stay ahead in the race!

Developing International Management Skills

Some years ago I was working on a project for my company on how to develop international managers and I thought I would start by asking companies who had been doing it for years.

I went to Paris to meet with the French HR Director of a multinational oil exploration company and asked him what was the “secret” of building a truly international management group?

He told me “No secret, there are just 2 simple steps.

First – you recruit people around the world in proportion to your business, if 10% of your business is in Nigeria, 10% of your managers should be Nigerian .

Second – You mix them up. If they never leave their homes they never become international managers, send them on visits, expatriate assignments, put them in international teams and projects so they mix with their colleagues and learn.”

”What next” I asked

”Nothing” he replied “If you do these 2 things, in no more than 50 years you will have an international management group.”

It as still one of the best answers I ever got to my question – though my boss was not happy when I told him it could take 50 years!

His basic message was a good one – recruit for diversity to match your environment and build experience and common ways of working to get things done.

It takes time to develop a truly global mindset and management capability and, for companies relatively new to working internationally it can be a whole management generation before people with this capability work their way through to the top of the organization in sufficient numbers to really make a difference.

I think we can accelerate the process with the right international management training and exposure to international experiences – but a lot of management training continues to carry a very mono-cultural view of the world (usually Anglo-Saxon management theories.

What is different about international management – we talk about DCCT – distance, cultures, timezones and technology

National cultural differences are often the first thing that people notice but rarely the toughest one to solve, with the right mindset we can learn to enjoy and manage cultural differences quite quickly.

Distance is a bigger barrier – people are much more comfortable with face-to-face contact and the lack of this can have major consequences for trust and management styles

Timezones are a fact – there is no right time for a global conference call, we just have to be aware and adapt our practices to recognize this.

Technology is both an enabler and a barrier; it makes international management possible but can often get in the way of communication and effectiveness (think of all those unnecessary emails and conference calls).

An additional barrier is the sheer business complexity of large multi-site organizations – the subject of my book Speed Lead – faster, simper ways to manage people, projects and teams in complex companies

When we talk to managers about developing these skills they are often skeptical about the investment of time in training. When we ask them how they learned to work internationally they often tell long stories of the mistakes they made and the time it took to recover and put things right.

Our question is always – can you afford the time and cost of letting everyone in your organization learn by expensive trial and error?

Selecting & Developing the International Manager

The key question though is, ‘How does an organisation identify and develop its international managers for the future?’

This article looks at some of the issues involved in the selection & development of the global manager

Whether working in a ‘Global’ or ‘Transnational’ organisation, or simply one that exports to its customers from its home country, the successful international manager needs to have developed the competencies and personal attributes necessary to allow him or her to work effectively in an international and cross-cultural environment.

An environment in which they will be expected to interact, manage, negotiate, live and work effectively as individuals and in teams with people whose values, beliefs, languages, customs and business practices are different from their own, and in relationships where misunderstandings can lead to costly mistakes and even business failures.

Increasingly, organisations are looking for ways to develop their managers to handle this important dimension, and many are attempting to fill Board and other senior appointments with people who have a proven track record in successfully managing an international business.

The considerable costs that can be incurred when an international assignment fails means that organisations do need to develop professional and focused processes for ensuring that only the best people are selected and developed for such roles. Seldom is it possible to find a perfect match. A professional approach to the selection and development of international managers, however, can help avoid the problems that invariably arise from appointing people who subsequently become the ‘Missionaries’, ‘Mercenaries’ and ‘Misfits’ amongst international assignees, and who can do so much harm to the business.

The first step in this process should be to identify not the people but the competencies, motivation and personal attributes required for success. International assignments are so often filled as a ‘knee-jerk reaction’ with the most ‘technically’ competent and readily available person, and frequently someone who, until that point in time, had never really considered an overseas assignment as part of their career. Experience shows, however, that ‘technical’ competence, whilst important, does not of itself produce an effective international manager.

There is also the danger that, in their eagerness to take an international assignment or perhaps the fear of possible harm to their careers of being seen to refuse one, people will not think through the personal implications for themselves or for their partners or families. To compound this problem, organisations frequently offer inflated international remuneration and benefits packages to help ‘convince’ the individual that this is the right career move for them and leave them to sort out any ‘personal difficulties’.

Planned process

What needs to be done, therefore, is for the organisation to clearly define their criteria for success at international, managerial, functional and personal levels and then select and develop potential international managers against these.

Whilst there are international competency models that have been developed to help in the selection and assessment process, it is essential that the one which is eventually used by the organisation reflects both the specific or various cultural needs of its markets and the organisation’s culture, which sometimes can be in conflict. In identifying the personal attributes needed, it is also important not to assume that there is a single attribute (or personality) profile for all markets. For example, the person who is ideally suited, in terms of their motivation and personality, to work in one market, say the USA, may find it very difficult to work in another, say Germany or Venezuela.

Avoiding over-reaction

This assessment process should not be left until a vacancy arises. It should be ongoing and one through which people who are considered as high performers with international potential are identified as early as possible in their careers and then given the appropriate opportunities to develop their experience and skills in that direction. These should include opportunities to develop their experience and skills in that direction including the opportunity to regularly discuss their aspirations for an international career and, if appropriate, their family’s level of support.

Consideration should also be given to planned exposure to the international side of the business through projects that require them to visit and work for short periods in the organisation’s overseas operations, or with its customers. This would allow in-market senior managers to assess and provide feedback on how effectively, or otherwise, the person is able to work with the local team and in the different cultural environment.

Allow an informed decision

A further part of the process should be to give individuals the opportunity, with their partners if this is appropriate, to attend relevant country briefings and cross-cultural awareness workshops. This can help them more fully appreciate the opportunities and challenges of an international career and allow them to take an informed and objective view of what they might be letting themselves in for. In this way, there can be a process of self-selection which helps ensure that the people who eventually are offered and accept an international assignment, and their families are fully committed to it. Once committed in principle, the process might then include the use of international focused development assessment centres in which the in-company assessors themselves have a proven international track record and who can become mentors to people once they take up an assignment.

Having identified people with potential as international managers, and who are able and willing to take up international assignments, appropriate formal training should become an integral part of the process. Ideally this will include advanced management and functional skills training, and country briefings covering in some detail the historical, political, economic, social and business environments of the market(s) the individual will visit or be asked to move to. Also required will be cross-cultural awareness training to help them appreciate the values, beliefs and practices of the other cultures and how their own culture may be seen by people from the host culture.

Where appropriate, language training is also very important and should not be left until the person has to take up their appointment. Experience in this area shows that most people become so deeply involved with the operational task from the outset of the assignment that they can seldom find the time to acquire more than a basic social vocabulary in the other language.

In summary, a key strategic imperative in managing an international business must be to develop effective international managers. People who have the knowledge, skills, experience, motivation, personal attributes and cultural sensitivity that will allow them to create a sustainable competitive advantage through the ways in which they are able to interact and operate with people from other cultures.

The bottom line for any organisation, therefore, must be to identify, assess, select, develop and train their international managers against clearly defined criteria that reflect their markets and which fully support the international management needs of their overall business vision and strategy.

How To Audit Your Business Strategy

Why conduct a business strategy audit?

Nearly all the major initiatives undertaken by corporate executives today are called “strategic”. With everything having high strategic importance, it is becoming increasingly difficult to distinguish between the many priorities and imperatives that are initiated in organisations. When everything is clearly strategic, often nothing strategic is clear. When everything is designated as a high priority, there are, in reality, no priorities at all.

However, when the overall strategic direction is clearly understood by everyone in your organisation, the following benefits occur:

organisational capabilities will be aligned to support the achievement of your strategy resources will be allocated to different business processes in priority order – according to the importance of that process and its contribution to competitive advantage your company or organisation can excel in the market place or in its business/commercial sector.

 

The purpose of a strategy audit is to arm managers with the tools, information, and commitment to evaluate the degree of advantage and focus provided by their current strategies. An audit produces the data needed to determine whether a change in strategy is necessary and exactly what changes should be made.

Defining a Strategy Audit

A strategy audit involves assessing the actual direction of a business and comparing that course to the direction required to succeed in a changing environment. A company\’s actual direction is the sum of what it does and does not do, how well the organisation is internally aligned to support the strategy, and how viable the strategy is when compared to external market, competitor and financial realities. These two categories, the internal assessment and the external or environmental assessment, make up the major elements of a strategy audit.

The outline that follows is derived from The Business Strategy Audit (see References). It\’s intended to give you a clear idea of how to set about conducting a self-assessment audit in your own organisation, without the need for any additional training or external consultancy support. But note that this outline does not include the range of Questionnaires and Checklists and the detailed guidance to be found in the full, 124-page Audit.

Part 1 ~ The External Environmental Assessment

A conventional corporate mission is to provide distinct products and services to customers at a value superior to that offered by competitors. Without a strategy, valuable resources will be diluted, the work of employees will be unfocused, and distinctiveness will not be achieved. The external environment assessment provides any business with a critical external link between its competitors, customers, and the products/services it offers.

The fundamental reason for examining an organisation\’s environment in the process of clarifying strategy can be summarised thus:

Ensure that the company is meeting the needs evident in the environment Prevent others from meeting those needs in a better way Create or identify ways to meet future or emerging needs.

 

The success or failure of a company often depends on its ability to monitor changes in the environment and meet the needs of its customers and prospective customers.

An organisation\’s business environment is never static. What is viewed as uniqueness or distinctiveness today will be viewed as commonplace tomorrow as new competitors enter the industry or change the environment by modifying the rules by which companies compete. Consequently, an effective strategy will do more than help a company to stay in the game. It will help it to establish new rules for the game that favour that company. Successful companies do more than simply understand their environments. They also influence and shape the circumstances around them. Companies that fail to influence their environments automatically concede the opportunity to do so to their competitors.

Steps in conducting an environmental assessment

Step 1: Understand the external environment at a macro level

The first step in the environmental assessment is to develop a basic understanding of the trends and issues that will significantly change, influence, and affect the industry. The overall industry understanding comes from looking at the elements that influence the environment.

These elements include:

Capital markets Industry capacity Technological factors Pressure from substitutes Threat of new entrants Economic factors Political factors Regulatory factors Geographic factors Social factors

 

A useful framework to understand these issues comes from answering the following questions. They should be posed directly when used in an interview, and indirectly when analysing data:

What is the long-term viability of the industry as a whole, and how do capital markets react to new developments? What trends could change the rules of the game? Who are the industry leaders? What are they doing? Why? What are the key success factors in the industry? What developments could allow a company to change the rules of the game? Five years from now, how will winners in the industry look and act? What is the reward (and/or cost) of being a winner/loser within the industry? Where has the industry come from?

 

Step 2: Understand the industry/sector components in detail

Industry/sector components are normally broken down as follows: competitors, customers and stakeholders. Questions that should normally be asked of each key competitor include:

BUSINESS REVIEW

Strategy Issues:

What is the strategy of each competitor? Where do they appear to be heading? What is their business emphasis? Do they compete on quality, cost, speed or service? Are they niche or global players?

 

Capabilities:

What do they do better than anyone else? Where are they weaker than others? Where are they the same as others?

 

Business Objectives:

Who are their primary customers? What types of business do they not do or say no to? Who are their major partners? Why are they partnering? What do they gain from it? What are they doing that is new or interesting?

 

FINANCIAL REVIEW

Financial Strength – Internal:

How much cash does each competitor generate annually? What are the drivers behind their financial success (from a cash perspective)? How do they allocate resources (funds)? How fast are they growing and in what areas?

 

Strength as Perceived by Capital Markets:

Are competitors resource constrained or do they have strong financial backing? Is this perception consistent with the internal analysis? Why or why not? How has the company performed in the financial markets? Why? What constraints/opportunities do they have with respect to financial markets? Why?

 

ORGANISATION REVIEW

Top Management:

Has management kept the company at the forefront of the industry? Why or why not? Are the key players seen to be moving the company forward?

 

Organisation:

Is the company centralised or decentralised? Does the corporate parent act as a holding company or as an active manager? Is the organisation perceived as being lean and able to get things done?

 

People:

How many people are employed? Is the company over-or under-staffed? Are people managed to achieve mainly business objectives, human objectives or some of both? How does this affect the company? What skills are emphasised during recruitment?

 

Culture:

Is the culture results-oriented? Bureaucratic? Flexible?

 

Similar lists of questions should be developed for customers and stakeholders (or see the full Audit for ready-made questionnaires).

Step 3: Integrate the components into an environmental picture

Once the findings of the stakeholder analysis, customer analysis and competitor analysis (above) have been collected, audit team members should step back and integrate the data. Integrating the different components will help the team to understand the overall environment in which the business operates.

This integration should take place at two levels: assessing where the industry is heading and the likely impact of that direction on the company, and combining the organisational assessment with the environmental assessment.

The Business Strategy Audit offers a detailed framework for analysing this data. In brief, it should highlight significant changes in the environment, and the impact of those changes on the company\’s competitive position within the industry. It should address the fundamental question of how the company can influence its environment in the future, and what the business will need to look like if it is to thrive in the future.

In addition, the analysis should highlight the requirements and capabilities that are needed within the company to meet external demands. These requirements and needs should then be matched up with the current capabilities outlined in the organisation assessment. This will enable the team to determine the overall alignment of the company\’s strategy to its environment.

Part 2 ~ The Organisational Assessment

Once the company\’s environment has been examined and analyzed, managers should consider the qualities and characteristics of the organisation itself that influence what can be accomplished in terms of strategy. This section is about organisational assessment. The steps shown here will provide insights into the effectiveness of the company\’s current strategy, and provide guidelines for increasing strategic effectiveness.

Strategy Clarification. Strategy clarification helps the leadership team determine what business they are in, the direction of the business, and framework or criteria for making strategic decisions in the future. If people at any level of a business are unclear about any of these three areas, it is difficult for them to focus their attention, cooperate with other teams, and organise their efforts to gain competitive advantage in the marketplace. Viability and Robustness. Measuring viability and robustness helps a leadership team test strategies and ideas against future world scenarios to determine whether the strategies can be achieved and sustained. By looking at both market and financial viability and robustness in different scenarios, a management team can see what will create advantage in the future and what key measures need to be implemented to monitor changes in business conditions. Business Processes. The term business process refers to the overall work flow within a company and includes elements such as product design, manufacturing, and delivery. A good process analysis will help a leadership team to see what must be done given the company\’s strategy, and how those processes can be improved. Capabilities. Capabilities are bundles of separate skills required to deliver the products or services that give a business competitive advantage. There are two parts of a capability assessment. First, the capabilities needed to execute the strategy must be determined. Second, the current level of ability in terms of those capabilities must be assessed. Without knowing what capabilities should be focused on and improved, competitive advantage will be difficult to achieve. Organisation Design and Resourcing. This part of the analysis looks at alignment issues between the environment, the strategy, the skills required to achieve that strategy, and the organisation structure. During this step, a management team can design an organisation that aligns systems in a way that will allow them to execute a strategy. Unless the systems within a business are aligned to improve effectiveness or efficiency, strategy statements are merely plaques on the wall that are seldom realised. Culture. Culture refers to the set of shared values that influence behaviour and direction over time. The style of management and the beliefs and assumptions commonly held by people in the organisation must be determined in order to ensure alignment and execution of the strategy.

 

Having completed each of these assessments, they must be integrated by the audit team. In this process, audit team members should attempt to answer one fundamental question: Is our strategy in alignment with the external environment?

To answer this broad question, the following issues should be addressed:

Do our capabilities match our customer requirements? Do we offer something required by our customers that is better than the offerings of our competitors? How are customer demands changing? How are competitors changing? How are our internal capabilities evolving to keep pace with those changes?

 

Depending on the answers to these questions, the team can implement the changes dictated by the audit. In making these changes, three issues should be considered:

Structure follows strategy – This means that current organisational boundaries and structures should not be allowed to determine the selection of a competitive strategy. Rather, the environmental and organisational assessments that you have just conducted should determine and drive strategy selection.

Plans for change must be widely owned – Those people ultimately responsible for implementing strategy (typically front-line employees) should be consulted for their ideas about what changes should be made and how they should be made. Otherwise, very little change is likely to happen.

Implementation should start with what is core to gaining advantage – In other words, start with core business processes, \’pick the low hanging fruit\’ first, make those changes that will make the most visible difference.

In addition, it may be useful to know that the following are the most common mistakes made by teams conducting business strategy audits:

Expecting all data to be equally useful Do nothing with the audit findings Failing to link other support systems (rewards, administration, etc.) to strategy Not thinking strategically about what processes and capabilities to keep in-house and what to outsource Failing to prioritise those core processes that must be world-class Failing to match internal capabilities with customer requirements Failing to communicate audit findings and strategy changes to people throughout the organisation is a clear and simple language