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Strategy An organization’s strategy shows what the organization wants to achieve and how it will achieve it. It includes: l The purpose of the organization l Goals and objectives l Plans and methods to achieve these goals and objectives
It is management’s game plan for: l l Running the business Strengthening the firm’s competitive position Satisfying customers Achieving performance targets
Strategy v tactics l l l Strategy: Long term Major commitment of resources Difficult to reverse Made by senior managers Decisions are complex and non-routine l l l Tactics: Short term Less resources committed Easier to reverse Made by more junior managers Simpler and more routine decisions
Developing strategy l l l l Clarify objectives Carry out internal and external audits Conduct a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis Develop plans to achieve objectives Implement plans Review and evaluate outcomes Prepare the next plan
Influences on strategy l l l Stakeholders Values of owners and managers External environment Market opportunities The culture of the organization Corporate skills and resources
Factors to consider when deciding strategy l l l SWOT Skills and resources Mission and objectives Risk involved Stakeholders needs and preferences Expected return
Advice on strategy l l l l Do your homework before developing strategy Have a clear set of goals and objectives Build in flexibility Understand the needs, desires and nature of customers Know the competition Emphasize strengths - minimize weaknesses Emphasize core competency to sustain a competitive advantage Make it clear, concise, consistent and attainable
Suitability of the strategy The strategy should fit the situation of the firm. In particular it should l Exploit company strengths and distinctive competencies l Correct organizational weaknesses l Neutralize or deflect environment threats l Help the firm seize opportunities. l Result in the achievement of organizational goals. l Fill the gap identified by gap analysis. l Generate a sustainable competitive advantages. l Involve a moderate and acceptable level of risk. l Suit the culture of the organization. l Be feasible. l Be acceptable to stakeholders.
Why a strategy might fail l l l Unrealistic objectives Conflicting objectives Poor planning Poor execution of the plan Uncontrollable variables Problems of business culture: resistance to change
FRAGONARD l Grasse's Parfumerie Fragonard was founded in 1926 by Eugène Fuchs. Like Corday and D'Orsay, Fragonard was named for a dead celebrity, the painter Jean-Honorè Fragonard, a grassoise by birth. (Fragonard's father, François, had been involved in making scented shoes in Grasse in the 18 th century. ) Today the enterprise is managed by the founder's three granddaughters, Francoise Costa, Anne Costa and Agnès Costa-Webster.
FRAGONARD l l In the 20 th century, perfume became increasingly luxurious and is still strongly associated with other artistic endeavours. Perfume was used and desired not only for its fragrance but also to highlight the attractiveness of the wearer. Thus the promotional expense which drives the Fragonard business is the promotion of Grasse tourism, which is a good deal less expensive to promote than a brand sold in major department stores.
A final thought Strategy is the big "aha" that makes you more successful and more profitable than your competitors. It is a realistic and detained action plan backed by resources. It is not an aspiration“ (Carol Lewis, The Times)