Organisation and strategy

In the past week, our business management taught about organisations and strategy. I feel that it was a difficult topic. This is because strategy is a long term and things which is difficult to handle, you can’t control much things in an external environment. Mintzberg said, a strategy is ‘a pattern in a stream of decisions.’ (Mintzberg 1972)

 

I believe an organisation would feel difficult and complicated when they choose and set up their strategy. It consists myriads of levels, for instance, corporate level, business level and operational level. These levels shows the overall scope, the individual business and the delivery of an organisation. To develop a strategy, lots of elements are needed. At least, you have to know what is your position is in the market. If an organisation has a large market share and a good reputation, they might set up a stronger and a difficult strategy.

 

For example, by using SWOT analysis, a famous brand, Sony. It was a huge brand and successful brand in early 1990’s.

 

Strength (1/4):

The strength of Sony is that it sells high quality product and it has a good reputation for customers. Their product has a guarantee, especially for TV and camera.

 

Weakness (2/4):

In weakness, they got a declined in their profit. Their revenue keep decrease in this few years, due to the exciting competition and lots of substitute.

 

Opportunities (3/4):

In opportunities, Sony has did a well job, they tried to use risk diversification to spread their risk into different electronic device.

 

Threat power (4/4):

In threats power, they face lots of problem. Due to lots of substitution, customers may choose other products, they got big bargaining power. However, they got a back a bigger bargaining power from supplier. For threat of competitive rivalry, the market got lots of sellers which sell similar product and it’s difficult and costly for them to switch the products.

 

As what I have said at the beginning, there are strategic choices at the corporate level. It includes the market and Ansoff’s Matrix. For this corporate level, it includes the generic growth, product development, market development and diversification.

In another company, Samsung. They also did product diversification. They sell no just mobile phone, they also sell computer, TV, high fi and also camera. When they first enter the market, they just sell mobile phone and TV. But they didn’t sell computer at the beginning. But they changed their mind. In order to satisfy different people’s want, they enter different market and sell different products.

The above video would tell you how to develop a great a business strategy!