Analysis and Selection of Business Strategies

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CAPITAL UNIVERSITY
OF
ECONOMICS AND BUSINESS

BTEC-HND Centre

Unit 7
Edexcel Level5

BUSINESS STRATEGY

Unit Introduction

24 February 2013Phoa Khee-Liang 潘科良

Unit 7: Business Strategy

BTEC Higher National — H2

Description of unit
The aim of this unit is to develop your abilities to evaluate and select strategies appropriate to business organizations. This will involve an analysis of the impacts of the external operating environment and the need to plan organizational strategies to ensure effective business performance.

Summary of learning outcomes

To achieve this unit a you must:
1 Analyze how the business environment is considered in strategy formulation 2 Understand the process of strategic planning
3 Examine approaches to strategy evaluation and selection
4 Analyze how strategy implementation is realized.

Content

1 Strategy formulation
Strategic contexts and terminology: role of strategy, missions, visions, strategic intent, objectives, goals, core competencies, strategic architecture, strategic control Stakeholder analysis: stakeholder significance grid, stakeholder mapping Environment auditing: political, economic, socio-cultural, technological, environmental and legal analysis (PESTEL), Porter’s 5 force analysis, the threat of new entrants, the power of buyers, the power of suppliers, the threat of substitutes, competitive rivalry and collaboration Strategic positioning: the Ansoff matrix, growth, stability, profitability, efficiency, market leadership, survival, mergers and acquisitions, expansion into the global market place The organizational audit: benchmarking, SWOT analysis, product positions, value-chain analysis, demographic influences, scenario planning, synergy culture and values

2 Strategic planning
Strategic thinking: future direction of the competition, needs of customers, gaining and maintaining competitive advantage, Ansoff's growth-vector matrix, portfolio analysis Planning systems: informal planning, top-down planning, bottom-up planning, behavioural approaches

Strategic planning issues: impact on managers, targets, when to plan, who should be involved, role of planning
Strategic planning techniques: BCG growth-share matrix, directional policy matrices, SPACE, Profit Impact of Market Strategy (PIMS).

3 Strategy evaluation and selection
Market entry strategies: organic growth, growth by merger or acquisition, strategic alliances, licensing, franchising
Substantive growth strategies: horizontal and vertical integration, related and unrelated diversification
Limited growth strategies: do nothing, market penetration, market development, product development, innovation
Disinvestment strategies: retrenchment, turnaround strategies, divestment, liquidation Strategy selection: considering the alternatives, appropriateness, feasibility, desirability

4 Strategy implementation
The realization of strategic plans to operational reality: communication — selling the concepts, project teams, identification of team and individual roles, responsibilities and targets, program of activities, benchmark targets at differing levels of the organization Resource allocation: finance, human resources, materials, time Review and evaluation: an evaluation of the benchmarked outcomes in a given time period of corporate, operational and individual targets

Outcomes and assessment criteria

Outcomes Assessment criteria for pass
To achieve each outcome you must demonstrate the ability to:

1 Analyze how the business environment is considered in strategy formulation 1a.define the contexts of business strategy
1b.explain the significance of stakeholder analysis
1c.conduct an external audit of a given organization
1d.conduct an internal audit of a given organization
1e.apply strategic positioning techniques to the analysis of a given organization

2 Understand the process of strategic planning
2a.demonstrate an ability to think strategically...
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