Perspectives on business strategy

In fact, there are many different views on strategy. Depending on different research purposes and periods, economists have different conceptions of strategy.

Viewing: What is a business strategy

According to General Ailleret, strategy is “the identification of the paths and means to be used to achieve the objectives defined through policies”.

F.J. Gouillat argues that the entrepreneur’s strategy is “the sum total of decisions aimed at obtaining positions; critical, defensive, and produce exploitable and usable results.”

“Strategy is the art of combining actions and directing them to achieve long-term goals” (G. Hissh).

“The strategy of an enterprise is to outline sufficiently stable and long-term trajectories of progress around which the correct decisions and actions of the enterprise can be arranged” (Alain Charlec Martinet) ).

Some economists around the world have unified business strategy with business development strategy. Representing this concept are economists of BCG, according to which they believe that “development strategy is the general strategy of the enterprise, including parts of the secondary strategy: marketing strategy, strategy finance; research and development strategy…

But for M. Parter and K. Ohmac, the purpose of business strategy is to bring about the most favorable conditions to create competitive advantages for businesses.

According to the conventional approach, strategy is a system of long-term goals, policies, and measures mainly on financial production and business, and on solving human factors in order to bring enterprises to business. develop to a new level in terms of quality.

The concept of strategy

From different conceptions of strategy, we can derive a general concept of strategy as follows:

Strategy is a system of viewpoints, basic goals and objectives, together with solutions, policies and policies in order to make the best use of the resources, advantages and opportunities of an enterprise to achieve its goals. achieve the set goals within a certain period of time.

The business strategy has the following characteristics:

– Business strategies are overall strategies of an enterprise that define business goals and directions over a relatively long period (5, 10 years…) and are fully mastered in all activities. business activities of enterprises to ensure sustainable development of enterprises.

– Business strategy only outlines long-term, directional directions, but in business practice, a combination of strategic goals and situational goals must be performed, a combination of strategy and tactics, between the short and the long term. Only then can we ensure business efficiency and overcome the deviations caused by the strategy.

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– All important decisions in the process of formulating, deciding, organizing the implementation, and checking, evaluating and adjusting the strategy must focus on the top leader of the enterprise. This ensures the accuracy of long-term decisions, for confidentiality; confidential information.

– Business strategy is always built on the basis of comparative advantages. This requires that in the process of strategy formulation, enterprises must properly assess their production and business status to find out strengths and weaknesses and regularly review internal factors when implementing strategies. comb.

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– Business strategy is first and foremost built for business lines, specialized business fields, and traditional strengths of the enterprise. This puts businesses in the position of having to build, choose and execute strategies as well as participate in business in prepared and strong markets.

Perspectives on existence and development

Business strategy firstly expresses the viewpoints and ideas of existence and development of the enterprise. The perspective of existence and development affirms the role and mission of the enterprise. It answers the questions:

– What purpose does the business exist for?

– In which industry does the business exist?

– And what is the development direction of the business?

Basic goals of the business for a certain period of time

Criteria objective; is the expected, necessary and possible state of the business after a certain time.

Objectives implemented in business strategy answer the question: what does the business need to achieve and where should it go after a certain time?

The basic objectives are: Revenue, profit, budget payment, average income of employees…, for enterprises, in addition to business tasks and serving tasks such as the Postal Corporation; -Vietnam telecommunications, besides that, also includes service criteria such as: telephone density, radius; service radius, service density…

The objectives of the proposed strategy must be based on the basis of the business’s must-haves (from the requirements of the environment – opportunities, and of the enterprises themselves – problems), and on the basis of what can be (resources and potentials) of the enterprise . That is a reasonable goal.

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Strategic tools and solutions

Strategy solutions and tools are the sum total of policies, tricks, and means that enterprises use to achieve the basic objectives of the strategy.

Strategic solutions answer the question: How can businesses achieve their goals? That is:

How should the structure of the apparatus be determined?

Where does the budget for the goal come from?

How to allocate and manage most effectively?

The tool of strategy helps us answer the question: how does the business achieve its goals?

In summary, the business strategy includes three main contents as follows:

Requirements

and the basis for building a business strategy

Requirements

A proposed business strategy must ensure the following requirements:

– A business strategy must ensure to increase the power of the business and gain a competitive advantage. To do so, when formulating strategies, enterprises must thoroughly exploit their comparative advantages.

The business strategy must ensure the business safety for the enterprise. The business strategy must define the safe zone, the business scope and determine the allowable level of risk. To meet this requirement, enterprises must conduct research and predict the future business environment. The more accurate the prediction, the higher the security of the business. This requires businesses to have a certain amount of information and knowledge.

The business strategy must clearly define the objectives and basic conditions for the implementation of the goals.

– It is necessary to develop a backup strategy and an alternative strategy. This is because the environment is always changing, and the strategy is the decision of the future, the reality in the future may be different from the prediction of the strategy.

– Must know the combination of opportunity and maturity. It means that a business strategy is built and implemented with the right opportunity. A strategy, no matter how perfect, that is devised when the time has passed is meaningless.

The bases

The process of developing a business strategy is influenced by many factors. The factors influencing the strategy are summarized as follows:

The way of the business: The mission of the business affects the goals of the strategy. The business strategy that is built and implemented must be based on the lines of the enterprise and must be directed towards the realization of the supreme goal of the enterprise.

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– The enterprise’s resources to determine the business strategy must also be based on the strength of the business, because it is related to the feasibility of the strategy. Business strategy can only be implemented on the basis of what is possible of the business. It is the capacity of enterprises in terms of capital, people and technology.

The main factors of the business environment:

In today’s competitive environment, business activities of enterprises depend increasingly closely on the environment. Enterprises’ decisions are not only based on their own capabilities, but must also take into account the impacts of the environment in relation to the business itself. The main factors are:

+) Customers:

Customers are the basis of the existence of the business, thus deciding the business strategy of the business. To build a business strategy, businesses must study the number of customers for their products, the tastes and incomes of customers. On that basis, the enterprise will segment the market, set up target to meet the market, need to achieve sales, adjust the portfolio and product scale…

+) Competitors

Every business that operates a business has competitors. While building a business strategy, strategic planners also have to study and compare the capabilities of the business with competitors to find advantages and take full advantage of those advantages.

The advantages of an enterprise compared to other enterprises are reflected in its intangible advantages and tangible advantages. Intangible advantage is an advantage that cannot be quantified such as: reputation of the enterprise, relationships, business location, skill level of labor, skills and management experience;. Tangible advantages are often quantified by criteria such as: volume and quality of products, facilities (factories, machinery and equipment), production technology, product prices, etc.

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+) Factors such as political, legal, economic, social and political environment of the State, scientific and technological development, etc.