For more than 40 years, Bain has helped thousands of companies achieve sustained, profitable growth.
Three qualities can help any company restart its growth engine by removing gunk and complexity that has built up over the years.
We collaborate with our clients to support the critical initiatives that will drive superior performance. Enduring: In developing a corporate strategy, companies should consider long cycles and macro-trends while ensuring their plan is resilient and adaptive in times of turbulence. Forward-looking: A solid corporate strategy appropriately anticipates risk, uncertainty and optionality. Actionable: Top-performing companies ensure their corporate strategy is both intuitive and realistic. High-performing companies demonstrate four key corporate behaviors: they provide a compelling corporate vision and appropriate performance objectives, aggressively manage their portfolio, use a repeatable operating model and execute a balanced financial strategy.
A European newspaper company received a purchase bid and asked Bain how to gauge the full potential of the business. To respond to changes in the market, our media client adapted new short and long-term strategies. A regional strategy reversed the trend of lackluster performance for our global retail client. A financial services client saw its share price soar after the company implemented corporate strategy initiatives based on the its future profit potential. A strategic refocus for our wealth management client revived once stagnant profits and created significant shareholder value. Five best practices that allow companies to tailor their strategic planning to their organizational needs.
A prepared executive team can turn a challenge from an activist investor into an opportunity to improve the business. This is a€?Business and Corporate Strategya€?, section 10.1 from the book Challenges and Opportunities in International Business (v. This content was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz in an effort to preserve the availability of this book. PDF copies of this book were generated using Prince, a great tool for making PDFs out of HTML and CSS.
For more information on the source of this book, or why it is available for free, please see the project's home page. DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators. A strategy is the central, integrated, externally oriented concept of how a firm will achieve its objectives. Figure 10.1 "Corporate and Business Strategy" summarizes the distinction between business and corporate strategy. How can we, as a corporate parent, add value to our various lines of business (often called subsidiaries)?
How can diversifying our business or entering a new industry, help us compete in our other industries? International strategyUsing corporate strategy to guide the choice of which markets, including different countries, that a firm competes in. As you can see with the opening case on Splash Corporation, the strategizing process starts with an organizationa€™s mission and vision. A vision statementA future-oriented declaration of an organizationa€™s purpose and aspirations., in contrast, is a future-oriented declaration of the organizationa€™s purpose. Research suggests that companies from different countries approach strategy from different perspectives of social responsibility. After considering what you just learned about competitive advantage and sustainable competitive advantage, ita€™s easy to see why the external environment is a critical input into strategy. Strategy formulation is coming up with the plan, and strategy implementation is making the plan happen. An overview of the strategizing process involves a SWOT (strengths, weaknesses, opportunities, threats) analysis and the development of the organizationa€™s mission and vision. This fabulous article by Charles Roxburgh is a must read for every decision maker responsible for deciding the fate of a proposed strategy. Build flexibility and options into your strategy to enable responsiveness either up or down.
It also tells you something that so often gets lost: how big the answer really needs to be based on what’s being tackled, not how big it’s allowed to be based on the budget that’s been assigned. The results of this bias, according to Roxburgh, are that decision makers are reluctant to make big calls.
I watch in despair as companies make “strategic” decisions to continue investing in products that have no hope of recouping that investment, never mind making a profit, because no-one is prepared to pull the plug. According to Roxburgh, sunk cost effect can be explained by loss aversion (companies would rather spend more than write off everything to date) and on anchoring (once the brain has been anchored to a budget, the additional budget doesn’t seem unreasonable).
Pursue several strategic options – taking a portfolio approach to your strategy allows you to go with what works and ditch what doesn’t rather than relying on one master plan. Gate fund as a stop-loss mechanism – release follow-on funding for a strategy only once agreed targets are met. I think a worrying mistake that decision makers make is that they assume that once they have signed off the strategy, it will deliver advantage for the foreseeable future.
Apple is a past master at entering a market after the initial forays, changing the rules, and then getting everyone else to play catch-up.
Equally, within a culture, ideas that trigger predictions that they will generate huge difference to the company or to its culture seldom have as big an impact as predicted.
Biased evaluation – accepting evidence that supports personal hypotheses, while rejecting  contradictory evidence.
False consensus is pernicious, says Roxburgh, because it can lead strategists to miss important threats and to persist with doomed strategies. If you find our thought pieces on brand strategy and brand management insightful and would like a deeper understanding for yourself, your marketing teams or leadership teams we can develop a tailored learning solution for you. Brand Education is a core competency of The Blake Project, the brand consultancy behind Branding Strategy Insider. Branding Strategy Insider helps marketing oriented leaders and professionals build strong brands.
Subscribe to Branding Strategy Insider Now and get regular updates and two FREE Chapters of Brad VanAuken's best selling book Brand Aid direct to your inbox. Strategies exist at several levels in any organisation – ranging from the overall business (or group of businesses) through to individuals working in it.
Corporate Strategy – is concerned with the overall purpose and scope of the business to meet stakeholder expectations. Business Strategy - is concerned more with how a business competes successfully in a particular market, or how to beat the competition. Functional Strategy – is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. We view corporate strategy as a proprietary set of actions that makes a company worth more than just the sum of its parts. We use rigorous fact-based analyses and pride ourselves on helping clients create pragmatic and actionable strategic plans that are focused on bottom-line results. It should be easy to communicate internally and externally and also provide for an approach that can be acted on by all business units at all levels.


We work to understand their reality and deliver true results—focusing on strategic decisions and practical actions. We recommended investments and divestitures that allowed our client to command a price 35 percent higher than the original bid. We helped create a new corporate vision and a three-year road map to reverse a decline the company's stock price. See the license for more details, but that basically means you can share this book as long as you credit the author (but see below), don't make money from it, and do make it available to everyone else under the same terms. However, the publisher has asked for the customary Creative Commons attribution to the original publisher, authors, title, and book URI to be removed.
The general distinction is that business strategy addresses how we should compete, while corporate strategy is concerned with in which businesses we should compete. The Hortalezas, for instance, say that they are in the wellness business; but from the opening case, you can see that theya€™re talking about specific niche markets related to wellness. For example, Splasha€™s senior management might be able to orchestrate synergies and learning by using new products coming out of the Splash Research Institute. The Hortalezasa€™ experience with the HBC retailers can provide valuable insights into which new products to develop through the Splash Research Institute; in addition, Splash can sell more of its own products through HBC outlets. Strategy formulation typically comes from the top managers or owners of an organization, while the responsibility for strategy implementation resides with all organizational members. A mission statementAn organizationa€™s statement of purpose that describes who the company is and what it does is the organizationa€™s statement of purpose and describes who the company is and what it does. In many ways, the mission statement lays out the organizationa€™s a€?purpose for being,a€? and the vision statement then says, a€?on the basis of that purpose, this is what we want to become.a€? The strategy should flow directly from the vision, since the strategy is intended to achieve the vision and satisfy the organizationa€™s mission.
Central to the distinctiveness of the Indian business model is the sense of mission, a social goal for the business that goes beyond making money and helps employees see a purpose in their work. The general idea is that good strategies take advantage of strengths and minimize the disadvantages posed by any weaknesses. Opportunities assess the external attractive factors that represent the reason for a business to exist and prosper. Business strategy refers to how a firm competes, while corporate strategy answers questions concerning the businesses with which the organization should compete.
It explores in fascinating detail how the brain tricks leaders into making “rational” decisions that are nothing of the sort. Much of what he describes in terms of European financial services is equally applicable to what happens in many other fields and markets. Not just how big is the problem, but what are the implications of the problem and have they been addressed. Make sure money is spent on the actual problem, and that the problem doesn’t become a reason for money to be spent on something everyone would prefer to be involved with. In my world, for example, you absolutely want to retain the intrinsic goodness of a brand at every level, from goodwill to heritage to culture, and that’s usually where I start – with what a brand must keep in order to retain competitive value. Some sectors evolve faster than others, meaning some have longer turn times while others shift gear much more quickly. When the idea does fail, the blame somehow falls on “market conditions” and everyone puts on their best game face. Set a very clear vision for what a brand will feel like and be acting like when the strategy succeeds. At The Blake Project, we look to put a measurement framework in place that quantifies the story in terms of how things should track across a range of agreed metrics. The company that drives successful change in a market decides successful change in a market. As I’ve said elsewhere, “The most powerful brand you can own and manage is one where you know and write the code – not one that takes its cues from where others are, or where you perceive them to be.” Conversely, if you are the brand that everyone takes its cues from, you get to play to your strengths and your agenda, and your competitors can only follow.
Create a culture of open challenge and constructive debate within management teams where reviews are welcomed as helpful, not hostile, acts.
While it may be hard for brand strategists to have the ideas they have worked on so hard picked apart by colleagues, it’s much more dangerous to leave ideas unlitigated. As practitioners and educators we deliver interactive brand education workshops and keynote speeches designed to align individuals and organizations on essential concepts in brand management and empower them to release the full potential of their brands. Army and Wyndham Worldwide are some of the organizations that have turned to The Blake Project for help in meeting learning objectives. We focus on sharing thought provoking expertise that promotes an elevated conversation on brand strategy and brand management and fosters community among marketers. This is a crucial level since it is heavily influenced by investors and Directors in the business and acts to guide strategic decision-making throughout the business. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc. They’re all interdependent, so if you fail to pay proper attention to one of them, it can bring the others crashing down around you. And we align our incentives with our clients' objectives, so they know we're in it together. Below is a selection of our experts' perspectives on important issues—for our clients and their industries. You may also download a PDF copy of this book (29 MB) or just this chapter (3 MB), suitable for printing or most e-readers, or a .zip file containing this book's HTML files (for use in a web browser offline). Specifically, business strategyThe ways a firm goes about achieving its objectives within a particular business. The different types of international strategy are reviewed in Section 10.3 "International Strategy". This entire set of activities is called the strategizing process, as summarized in Figure 10.2.
Along with some form of internal and organizational analysis using SWOTA strategic management tool that helps an organization take stock of its internal characteristics (strengths and weaknesses) to formulate an action plan that builds on what it does well while overcoming or working around weaknesses and also assess external environmental conditions (opportunities and threats) that favor or threaten the organizationa€™s strategy.
Every company we [the researchers] saw articulated a clear social mission for their business.
Michael Jordan, for instance, is an excellent all-around athlete; he excels in baseball and golf, but his athletic skills show best in basketball. What opportunities exist in the market or the environment from which the organization can benefit? In fact, it reveals that all of us work to a set of biases that we must consciously resist. In today’s post, I highlight Roxburgh’s key observations, his recommendations on how to address them, and the steps I look to take as a brand strategist to ensure that what I’m doing gets the fairest hearing it can from the decision makers I’m working with. Richard Thaler’s principle of ‘mental accounting’ is that decision makers subconsciously assign various levels of sexiness to different budgets and Roxburgh gives some great example of this in the article. The very real temptation here is to pin the strategy on the problem: to assign an answer that everyone would like to see happen (and its accompanying resources) to a problem no-one wants to tackle head-on, in the belief that doing so will fix the problem or at least make it more palatable to deal with. Roxburgh explains that people would rather leave things as they are, that they are more concerned about the risk of loss than they are excited by the prospect of gain and that they often exhibit a strong desire to hang on to what they own because the very fact of owning makes whatever it is more valuable to the owner.
For me, this more conservative approach of moving from the known to the unknown does give people anchors. Anyone whose read “Black Swan” will understand the dangers that past patterns present in terms of predicting the future. What feels like a responsible timeframe to analyze trends in the finance markets (Roxburgh’s reference point) could be ridiculous in a sector like technology (which isn’t even 30 years old yet as a consumer sector). The sunk-cost effect sees companies continuing to throw money at a problem, long after it has passed economic viability, in a bid to salvage their investment and miraculously turn things around.


I do that through the formation of a brand story that looks ahead to how the brand should be three years from now. Doing this enables decision makers to plot how a brand is progressing and to take corrective actions if things go off-kilter. This idea is little short of comfort-food for marketing decision makers, so we won’t dwell on this one. As VJ Govindarajan has pointed out many times, a strategy’s effectiveness starts to fade the moment it is created. In the strategy, look for ways to define the market atmosphere that work in your favor, and that actively work against a competitor trying to do the same thing. If everything else is right, the concern that ‘our people will find it hard to adjust’ has been proven time and again to be incorrect. Debate is healthy providing it remains focused on the business outcomes and everyone is committed to finding real answers and not simply looking to issue ‘restraining orders’. It requires sustained energy and confidence, and you won’t get everything right all of the time, but then, as Roxburgh shows, neither will those around you. BSI is a service of The Blake Project, a leading brand consultancy based in the United States, serving marketers around the world.
Market intelligence can give Splash information on which brands are selling well, and some of those brands might be good targets for Splash to acquire, such as it did with the Hygienix brand line.
Even when a firm doesna€™t sell products or services outside its home country, its international strategy can include importing, international outsourcing, or offshoring. ITC, a leading conglomerate, echoed the views of the companies we interviewed with this statement, describing the companya€™s purpose: a€?Envisioning a larger societal purpose has always been a hallmark of ITC. It is the assessment of a companya€™s strengths and weaknessesa€”the S and Wa€”which occur as part of organizational analysis; this organizational analysis of S and W is an audit of a companya€™s internal workings. As with Jordana€™s athleticism, when you can identify certain strengths that set an organization apart from actual and potential competitors, that strength is considered a source of competitive advantage. Threats include factors beyond your control that could place the strategy or even the business itself at risk. Optimism is built into our DNA as human beings, which is vital for creativity, but unless carefully controlled it tends to see even the most careful strategist inserting unrealistic stretch into plans in the sincere belief that such extremes can be achieved. To that end, I look to maximize the extent and gravity of a problem while always believing that there is a viable and positive answer. It allows decision makers to use status quo bias to their advantage because a clear rationale for why some things are staying leads onto the tougher questions of what must be left behind. If it’s difficult to know what we don’t know, it’s equally challenging to establish what we don’t question. No-one likes to admit they got it wrong, but knowing when to do so, and doing so decisively, is critical not just to saving resources but having resources available to adequately fund what replaces it.
In other words, people are bad at estimating how much pleasure or pain they will feel if their circumstances change dramatically. Yes, people will have misgivings – initially anyway – but they will soon adapt to what’s required. Neither can succeed without the other; the two processes are interdependent from the standpoint that implementation should provide information that is used to periodically modify the strategy. In other words, one of Splash Corporationa€™s business strategies would address its objectives within the nutraceuticals business. ImportingThe sale of products or services in one country that are sourced in another country.
The company sees no conflict between the twin goals of shareholder value enhancement and societal value creation.a€? Contrast this Indian model, where a companya€™s business goal is seen as bettering society, with the US model, where we try to motivate employees around the corporate goal of making shareholders rich.
Conversely, examining the opportunities and threats is a part of environmental analysisa€”the company must look outside the organization to determine the opportunities and threats, over which it has less control. The hardest but most important thing for an organization to do is to develop its competitive advantage into a sustainable competitive advantageA situation where an organizationa€™s strengths cannot be easily duplicated or imitated by other firms, nor made redundant or less valuable by changes in the external environment.a€”that is, using the organizationa€™s strengths in way a that cana€™t be easily duplicated by other firms or made less valuable by changes in the external environment. Threats are also externala€”managers typically have no control over them, but it can be beneficial to have contingency plans in place to address them. Being brutally frank about what needs to be tackled can make for some tense conversations and the optimists in the room will quickly label you as a pain, but it’s absolutely vital to avoid drinking in the fairy dust.
Sometimes conventions and assumptions are so ingrained in ways of working that people fail to recognize them as fallible or even negotiable. Because once it is made public, and proven to be successful, the herd will inevitably adopt.
Roxburgh says that people adjust surprisingly quickly even to major change, and that their level of pleasure (hedonic state) ends up, broadly, where it was before. Roxburgh says people tend to overestimate the extent to which others share their views, beliefs, and experiences.
However, ita€™s important to distinguish between the two because, typically, different people are involved in each process. This strategy may focus on such things as how it competes against multinationals, including Unilever and Procter & Gamble.
Corporate strategy deals with finding ways to create value by having two or more owned businesses cooperate and share resources. Organizational valuesThe shared principles, standards, and goals that are included in the mission statement or as a separate statement.
Taking SWOT analysis into consideration, the firma€™s management then determines how the strategy will be implemented in regard to organization, leadership, and controls. The US approach is at a sizable disadvantage, because it is difficult for most people to see making money for shareholders as a goal that is personally meaningful.
The strategies of today are the hygiene factors of tomorrow – and the transition time from distinctive to indistinguishable continues to shorten. Even acts that at the time seem revolutionary and highly disruptive emotionally will soon become the new normal.
In general, the leaders of the organization formulate strategy, while everyone is responsible for strategy implementation. Similarly, Walmart managers are engaged in business strategy when they decide how to compete with Sears for consumer dollars.
Penzeys Spices, for instance, sells herbs and spices that it buys from all over the world, yet it has retail outlets in only twenty-three states. This is the framework managers use to understand and communicate the relationship between strategy formulation and strategy implementation.
Kohla€™s Corporation, one of the largest discount retailers in the country, has stores exclusively in the United States but most of its products are sourced overseas. The company pays the outsource vendor for the end result; how the vendor achieves those end results is up to the vendor. The outsourcer may do the work within the same country or may take it to another country (also known as offshoring). In offshoringTaking some business function out of the companya€™s country of orgin to be performed in another country, generally at a lower cost., the company takes a function out of its home country and places the function in another country, generally at a lower cost.



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