What Is a Successful Business Strategy - Research Proposal Example

What Is A (Successful) Business Strategy? Table of Contents 0 Introduction 3 1 Business Strategy 3 2.0 Integrated Nature of Developing a Corporate Strategy 3 2.1 Vision 4 2.2 Components of Vision 5 2.3 Mission 5 2.4 Goals and Objectives 6 3.0 Four Key Dimensions of Well-Developed Business Strategy 7 4.0 Conclusion 8 9 References 10 1.0 Introduction The research paper is a description of the issues related to the development of a business strategy. The description will incorporate the integrated nature of the course of development of corporate strategy along with the description of the four key dimensions of a well-developed business strategy. The analytical discussion will be supported with evidences from the strategic operations of the Volkswagen group. 1.1 Business Strategy Business strategy is the basis of successful business that helps the organizations achieve the desired strategic goals and objectives that are long term in nature. Besides the prevalence of different types of business strategies to choose from for the organizations, that strategy is considered the best which increases the chances of prevalence of the organizations in an extremely dynamic world, both at present and in the future1. 2.0 Integrated Nature of Developing a Corporate Strategy The development of corporate strategy revolves around two major aspects such as setting the objectives and reaching the results targeted. Every business establishes objectives but lacks the desired level of cohesion between the set objectives and the path chosen to be followed for supporting them. The integrated nature of the strategic development helps the organizations in choosing the right direction of fulfilling the objectives. The integrated approach towards the development and implementation of strategy is therefore referred to as bridging of the “relevance gap”2. Framework for Integrated Approach towards Corporate Strategy Formulation Source: 3 2.1 Vision The vision is that single succinct statement that defines the goals which are medium to long term in nature. The business houses create the vision by considering the external environment in the market and express the views of the organizations as to how it wants to be perceived by the world. The formulation of vision should not only be inspirational and aspirational but it should also be measurable4. For example, the vision of the Volkswagen group for the ‘strategy 2018’ is to make the group a leader in the global environmental and economic perspective among the manufacturers of automobile. By the year 2018, it aims to become the world’s most fascinating and successful automaker5. 2.2 Components of Vision The vision is composed of three essential components that form the basis of successful functioning of the organization. The components are the values, purpose and leadership. The importance of value is justified through choosing of the best valued guiding actions and goals of the organization. Purpose is essential because it not only drives a company forward but also helps in building sustainable advantage. Purpose and value, both cannot operate in isolation and thus for making them work, leadership is essential. It helps in sustaining the organization’s values and purposes3. 2.3 Mission A mission describes the present business of a company. The missions of a company can be multiple in its nature and it is the vision that guides the formulation of the mission. The mission helps the organization in deciding the planning process that will fulfill the objectives and help to achieve the ultimate goal of the organization. For example, in review to the vision statement of Volkswagen, the following and many more mission statements have been formulated that is aimed towards the achievement of the strategic goals: Preparing for the challenges in the global competitive market Consistent building up of the company’s strengths and targeting new goals Optimization of CSR and management of the sustainability factor Enhancing the compliance of the company with legal requirements and standards Expansion of stakeholder’s involvement in the formation of corporate goals6 2.4 Goals and Objectives Goals are aimed towards fulfillment of the desired outcome and are of qualitative form. Based on the vision of the company, the goals are set and on the basis of the goals, the entire process of planning is undertaken. For example, Volkswagen has set the following goals on the basis of the strategy for the future: With the use and implementation of innovations and newer technologies, they intend to become the world leader Increase in unit sales in the long run to an amount of more than 10 million per year Achievement of over 8% return on sales before tax Becoming the top most employer among all other brands, regions and companies7 3.0 Four Key Dimensions of Well-Developed Business Strategy The four most important dimensions of a well defined business strategy are the product market investment strategy, the competencies and assets, the customer value proposition and the functional strategies and framework. Competition is a significant ingredient in the dynamic world of today. The companies need to focus excessively on its activities related to investment decision for enhancing their competitive advantage. The first dimension mentioned above is related to competition and determines specifically for the companies where to compete. However, determining just the area of competition is not enough and thus the remaining three dimensions indicate the process through which companies can compete in the chosen field or area in the market8. Example of Volkswagen Group The goal of the Volkswagen Group is to grow strong in strengthening its position as the leading manufacturer of ecological and economical automobiles in the world. With respect to this goal, management of sustainability has been viewed as the most important requirement for the company. For achieving incessant results with this strategy, however investment decision is one of the major requirements. Thus, the group aims to continue with investing decision of spending over €8 billion each year despite the financial crisis. After determining the investment decision, Volkswagen entirely focuses on its internal capabilities so that desired result can be achieved. Thus the company effectively manages its assets every year and focuses more on its competencies. Maintenance of functional programmes and strategies is also viewed as an important aspect within the company and at the same time it aims to satisfy the demands of its customers with respect to its product quality and effeciency6. 4.0 Conclusion The research paper has presented the findings on the analytical approach towards the formulation and implementation of successful business strategy. The findings have been well supported with reference to the example of operations of the Volkswagen Group. The integrated approach towards development of corporate strategy consists of defining the vision and mission statement and accordingly set the objectives and goals for the organization. Along with these findings, the four dimensions of a well developed strategy, the operations, finances, strategy and marketing have been recognized. The importance of the aspects of the framework and the relationship between the key dimensions of the business, have been primarily inculcated in the paper. References 1. Bono, Edward de and Heller, Robert (2006), “Business Strategy,” (accessed March 09, 2011), [available at http://www.thinkingmanagers.com/business-management/business-strategy.php]. 2. Starkey, K. and Madam, P. (2001), “Bridging the Relevance Gap: Aligning Stakeholders in the Future of Management Research,” British Journal of Management, (Special Issue), 3-26. 3. Gallagher, G (2009), “Corporate Strategy for Irish Companies,” Dublin, Chartered Accountants Ireland. 4. Kaplan, Robert S., David P. Norton, and Edward A. Barrows (2008), “Developing the Strategy: Vision, Value Gaps, and Analysis,” (accessed March 09, 2011), [available at http://www.exed.hbs.edu/assets/Documents/developing-strategy.pdf]. 5. Volkswagen (2011), “Strategy,” (accessed March 09, 2011), [available at http://www.volkswagenag.com/vwag/vwcorp/content/en/the_group/strategy.html]. 6. Volkswagen (2011), “Forewords,” (accessed March 09, 2011), [available at http://www.volkswagenag.com/vwag/nb09bis10/content/en/homepage/forewords.html]. 7. Volkswagen (2011), “Strategy and Management,” (accessed March 09, 2011), [available at http://www.volkswagenag.com/vwag/vwcorp/content/en/sustainability_and_responsibility/strategie_und_management.html]. 8. McLoughlin, Damien, & Aaker, David, A. (2010), “Strategic Marketing Management: Global Perspectives,” (accessed March 09, 2011), [available at http://books.google.co.in/books?id=tpW22FvYvn8C&pg=PA4&dq=four+key+dimensions+of+a+well+developed+business+strategy+%2B+Strategic+marketing+management&hl=en&ei=ir6KTdnhH8aurAfxiq3LDg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC8Q6AEwAA#v=onepage&q&f=false]. Read More