Grand strategy clusters are a model that focuses on each strategy as it would work within the strategic plans of a company. These strategies then are clustered to shape the business direction and focus on the long term goals of the company.
Clusters are a long term strategic business plan, a plan that is not concerned with short term goals and sales, but the big picture. Within the current business environment, a lot of attention is placed on the short term now, but with a long term plan you are prepared to become a “big fish in a small pond” centered business.
The Business Environment
The business environment can be seen as one, easy road. This can be seen as a path to the end goal of the business. Each business must have a plan on how to achieve their goals, what they want to do with that plan, and what they will do with their business as they go into it.
This business environment is shaped from outside influences that are seen in the business. These can be a combination of short and long term goals as well as overall strategies for the business. These goals and strategies will then require various strategies and the development of specific plans to achieve the overall business strategies.
Current Conditions Of The Company
Conditions within the company are also seen as factors in the overall strategy. Companies must have a plan that takes into account all aspects of the company. The strategic planning process is used to be sure that these conditions are accounted for and overall strategies are developed in such a way that the company can continue to grow.
These conditions are current resources, both in terms of materials and personnel, as well as the culture of the company that is currently present in the company. These are items that can be seen as both short term and long term issues that are felt within the company and the surrounding market that the company serves.
What is important to note about the company is that it is important to take these conditions into account when formulating your strategy and overall plan. You do not want to set yourself up for being leaned upon concerning these items. You also do not want to be seen as anything less than a reputable competitor in the industry you are operating within.
As you take into account the company conditions regarding the core strategic business plan, you take into account the company’s current situation and focus on how you can succeed in the business, regardless of where you are or will be in the future.
Projecting Strategic Business Plans
Projecting your strategic business plans into the future takes a good understanding of business in general. This includes an understanding of the short term needs of the company and the long term plans for the business. It also includes an understanding of the competitive market within the company and outside of the company. This is because you will be able to work with various other companies as you work towards your larger goals you set out to accomplish with the business.
Once you have a strategic business plan in place that takes the current business conditions and incorporates them into the larger scale strategy for the company, you then take that strategy into account as a strategic business plan. You then can take that plan into account as a template for various programs and form the foundation for the strategic business plans that need to be developed in order to support that overall strategy.
Strategic Business Plan Strategies
Strategic business plans center around the company’s niche market and overall niche within the industry. Each business works with a specific niche within the industry it serves. Each business must set out to accomplish goals based upon its specific niche, goals that start with the business itself and then grow into the larger environment of the niche.
Then, as plans are made, each business can start to grow and become a major influence within the industry that they serve. This boils down to the smaller plan for the business to take into account the market of the industry they serve, as well as the larger plan that focuses on the overall market and how to achieve its presence in that area of the industry.
Each Business Is Unique
Each business must take into account its own situation. Each business must then formulate its own strategy of plans that will help it to succeed. Each business is unique and cannot follow the strategic business plan templates designed for businesses in general, but it can follow the general strategy and use this as a tool for success.
When all is taken into account, the strategic business plans for each business will certainly take the industry into account, but each business must look to the overall strategy as they formulate their own plans in order to succeed.
Table Of Contents
- Models of strategy clusters
- Understanding the business environment
- Strategizing regional development and competitiveness
- The regional vision
- Eras of growth
- Competitive context
- Planning to expand to the region
- Demand of the industry
- Visions for additional growth
- Consequences of growth
- Strategic plans
- Finding the right strategy
- Technology cluster for growth
- Why use clusters?
- Multi-task strategies
- Evaluation and planning of clusters
- Strategic framework for model program
Model Of Business Cluster Strategy (Strategic Competitiveness)
To cope with future business environment, some industries or companies management often use different strategic planning methods. Because the present global, some industries or companies management often see the future business environment changes or changes in the environment which were not controlled by them. It is because of this, the companies or industries management need to think the changes they will have to face along the business environment. In order to have a new strategy for new business environment, the companies or industries management often need to have a new thinking and strategy to change a little and new in order to survive.
Human capital is a most important deciding factor for a company’s competitiveness in an industry. It is a part of a most important asset. Corporate leadership must be self-confident that the strategy will be effective and the human resources are capable for that strategy. So, the corporate leaders must select human resources and develop them before using the strategy. With this strategy, the companies can have a new market share. In order to create strategic clusters, the corporate leaders must involve the staff and create a “one strategy” which is based on human capital.
- Primary industries produce raw materials,
- Secondary industries supply materials to primary industries,
- Tertiary industries produce goods and services for final consumers, and
- Quaternary industries help in other industries improve the production process.
Strategic Position Of The Business
In order to implement a strategy successfully, the business must have a strategic position within the markets in order to survive. There are three strategic positions:
- Entry Leading Position
- Weak Position
- Vulnerable Position
- Leading position
- Entry leading position.
Leading Position. Following the current trends. Analysing or predicting the environment and finding new strategic value in that environment.
This model focuses on internal factors necessary to define and implement a successful strategy. The various internal resources are as follows:
Generic Competitive Advantage – With A Focus On The Following Factors:
Asset-Based Strategy (Internal Synergies)
This model focuses on internal factors critical to the success of strategy.
- Basic Competitive Strategy – that the definition is based on the triangle of competition.
- SWOT Analysis
- Target Marketing
- Target audience
The term “target audience” holds a specific meaning in a strict marketing sense. Many general business situations are loosely defined as “markets” and “customers”, but lack a clear set of associations and expectations that communicate who is and who is not part of the “target”. In the strictest sense a target audience is a specific group of people who share a type of problem or pain, and are motivated to solve it.
Target Market – a specific group of people, accessible to a business, whose needs are not being met by existing organizations.
In the sense of marketing, a target market is a group of customers or potential customers for a product or service. The market is defined by factors such as demographics and geographical location. The customer is thought to belong to one target market at a time. For example, persons who buying cars for daily transportation are considered a target market for cars (rather than tractors or yachts).
Identifying The Business Aims
The business aims define the overall goals of a business. In creating a business aim, two additional considerations should be taken into account; the balance between the short-term and long-term, and the effect on the company’s people, products, and finances.
- Identifying the business aims involves the following considerations:
In The Short Term
- 3 months
- 6 months
- 1 year
- 5 years
- 10 years
In The Long Term
- 3 years
- 5 years
- 10 years
- Identifying the organization’s core strengths and areas for development
- Identify your business strengths Identify your biggest business weaknesses Identify your business opportunities and threats
- Business sense – how the senses are looking for business opportunities.
- Business instinct – how you can feel the industry changes.
- Business inspiration – how you can think of new business ideas.
- Business intuition – how you can feel the market changes.
- Business understanding – how much you are familiar with the market and politics of the business.
- Identifying strengths and weaknesses
- Immediate strengths:
- Current customer base
- Well-known products
- New product potential
- Immediate weaknesses:
- Poor service
- Unmotivated employees
- High training costs
- Current Stage
The current stage of the business determines the direction and intensity of identifying the business aims. As the business moves towards its market, it undoubtedly faced with a great deal of external pressures, opportunities, and dangers. Throughout this period, a business must identify its current aims.
This section details the growth of the market for the given company’s product or service. The analysis involves the market in general and its attractiveness. It also describes the company’s market entry strategies and the company’s strategic position within the market.
- Direct and indirect competitors
- Focuses on competitive advantage (such as price vs quality or efficiency)
- Current trends
- Increased competition
- Reduced profit margins
- Increased bargaining power of consumers
- Threat to market share
- Increased business cost (such as purchasing capacity)
- Greater complexity in operations
- Technological developments
- Ongoing corporate strategy
- Analysing the business aims
- To achieve business aims the business must analyse the business aims and strategies.
- Business analysis
A business may undertake an analysis process for any number of reasons. One is to find the cause of a problem; for example, it can help to work out why sales have fallen, or to find out why the production costs have suddenly risen. Another is to plan ahead, for example, to anticipate and plan for the demands of the future. A further reason is to be able to answer questions from customers, stock analysts, or simply interested observers.
- There are a number of simple questions the business may ask itself:
- If particular problems occur: What are the causes? What solutions are advisable?
- If something happens that causes or will cause a deferment of action: Will it be worth waiting?
- If a particular action appears to be necessary: How can it be achieved?
- If a particular problem arises: Is it due to a particular type of cause? Can data be gathered to help in either identifying the cause or the solution?
Analysing Your Strengths
Analysing The Market
Analysing The Environment
Business Opportunities And Threats
Analysing Your Strengths
Understanding your organization’s strengths and weaknesses is a very valuable exercise. It enables you to be aware of both the strengths that contribute towards your company’s competitive advantage and those areas that can be improved upon to improve your overall operations.
Strengths can include:
- Existing clients
- Existing staff
- Modern technology
- Lower cost facilities
- Better quality facilities
- Packaging of a product
- Quality of personnel
- Knowledge of the industry
- Clients’ positive experience
- Leading-edge technology
- Expertise in the industry
- Continuing research
- Highly skilled personnel
- Knowledge of product
- Cost advantages
- High brand image
- High quality service
- Loyal customers
- Weaknesses of Grand Strategy Clusters
- Strong focus on technology
- Inflexibility to change
- Conscience to borrow ideas from any source
- Poor marketing costs
- No good investment structure
- High marketing spends
- Product is strategically correct but market-ready
- Focus on one market
- Not very committed to the product
- Growth is too fast
- Not experienced enough with the market
- Believing they don’t need to marketing
- Lacking formality decision-making process
- Lacking in communication and case discussion
- Lacking in strategy execution
- Wasting too many resource on the product development
- Expected profit is too high
- Vulnerable to disruption
- Lacking coordination
- Focusing on “new product, new technology and new market” too much
- Lacking in innovation
- No well-defined strategy executions
- Lacking in technology development and knowledge transfer
- Weak in organisation development and employee development
- Lacking in branding