Historically, startups and small business firms have been most successful in creating innovation in contrast to established firms. However, innovation by itself does not differentiate between small and large firms, and any company, therefore, irrespective of size, can innovate successfully. Not every established firm is a failure and not every start-up is successful. Technology is […]
The external environment of emerging and technology-based industries will tend to be more uncertain as the world moves further into the twenty-first century. Any changes in an innovation firm’s external environment that are driven by the forces of technology, economics, and other influences impede the ability of strategic managers to make strategic decisions to keep […]
The primary purpose of a strategic management system is to maximize the overall performance of the firm. However, a survey of Fortune 500 companies revealed that poor implementation has been the primary cause of strategic failures. Over time, portfolio management has gradually entered the strategic management system to become an essential part of it to […]
One of the issues a firm’s corporate directional strategy faces is about deciding its orientation towards growth. When a firm chooses to grow internally, innovation becomes the key driver to achieve that growth. Growth-oriented companies incorporate some kind of technology to generate innovation, and through innovation, they create a competitive advantage. Therefore, innovation provides a […]
Integrate the digital technology tools into your business strategy and operations in a way to make it difficult for competitors to copy the advantages you create. Digital Strategy In part one “The Nature of Business Strategy,” from the book “The Boston Consulting Group ON Strategy,” the authors describe strategy as “It is probably the business […]
Firms spend an enormous amount of time, money, and effort in financial forecasting to make strategic decisions that determine their long-run financial performance. In practice, spreadsheet-based financial models are used to forecast or predict a firm’s future financial performance. A financial model is simply a mathematical representation of a financial situation or condition. Financial planning […]
Industries and markets are segmented to develop business and marketing strategies, respectively. Both strategies are equally important to generate and sustain a competitive advantage. Ignoring any of these will not produce effective results. A competitive business strategy focuses on outperforming rivals within the industry or market segment to improve its competitive position. And to prosper […]
James Brian Quinn, in his book Intelligent Enterprises, describes the term “intellect” as it “is the core resource in producing and delivering services.” 1 A powerful intellect is a strength and by combining strengths a firm can build knowledge-based capabilities that can drive sustainable competitive advantage. The dictionary meaning of “intellect” is the power or […]
Strategy implementation is the most difficult part of the strategy. Hrebiniak states that “Making strategy work-executing or implementing it through the organization is even more difficult. Without effective implementation, no business strategy can succeed.” [1] Prior to this work, Henry Mintzberg introduced intended and realized strategy to help clarify this implementation challenge. According to him, […]
As the main goal of the strategy is to create value for customers and maximize firm value, the purpose of strategic brand management is to create and maximize brand value (added value), by designing, communicating, and transforming the created value and delivering value to customers consumers, and then capturing a portion out of it (in […]
The economic profit (EP) matric is a powerful tool to value businesses, evaluate strategies, and measure and evaluate performance. It can also be used to generate wealth for owners of small businesses and large corporations. All firms small or large have a formal or informal strategy with a quest to create value, and therefore, the […]
Every firm, small or large, pursues a formal or informal business strategy to compete and become successful in the marketplace. Some become very successful, and others go out of business. However, to become successful, a company must also have an effective functional strategy. Both strategies are essential for generating competitive advantage and superior performance. Through […]
Customer profit (CP), customer lifetime value (CLV), and return on marketing investment (ROMI) are important marketing measures that can be cascaded together and used by marketers to optimize marketing spending, reduce spending waste, and improve marketing effectiveness. CP focuses on identifying, sorting, and selecting those individual customers or a group of customers that generate profit […]
The terms strategic planning (strategy formulation) and strategic management are synonymous and interchangeably used in the business world; however, both have different meanings. Strategic management encompasses strategic planning-in other words, strategic planning is a subset of strategic management. Strategic management evolved from strategic planning. Fundamentally, strategic planning incorporates environmental scanning and strategy formulation whereas strategic […]
Strategic management has long been used successfully by large organizations to manage uncertainties and for better positioning to generate long-term growth and profitability. Due to the current and predicted environmental uncertainties, the practice of strategic management will become a need for small and medium-sized enterprises (SMEs) to keep them in equilibrium with their external environments […]
The firm’s ability to accurately establish and measure shareholder value (SHV) is crucial for assessing financial performance and moving the firm toward established objectives. Among other strategic objectives, such as profitability, efficiency, market share, and growth, shareholder value is the most important measure to evaluate a corporation’s long-run financial performance. The discounted cash flow (DCF) […]
The concept of competitive advantage is embedded in the key components of the strategic management process. Strategic management is about gaining and sustaining a competitive advantage. From environmental scanning to vision statement to strategy formulation (strategic planning) and implementation—all these components have been successfully used to develop a competitive advantage. Business leaders make strategic decisions […]
During an economic boom, when the market demand exceeds the industry capacity, it is easier for firms to grow, remain profitable and create value. There is not much of a need to understand what a competitive advantage is and where and how value is created. Firms can easily create value without a competitive advantage. In […]
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