How To Make Strategic Three Steps For Enterprises

Ford Motor Co's strategy for large-scale production of standard cars; General Motors adopts vertical integration strategy, and designs corresponding cars for customers at different levels of the market.

Remarkable strategies have led these companies to glory. However, when the competitive environment is changing, these companies find it extremely difficult to change the strategic direction of the company.

Although there are many reasons why it is difficult for companies to change their strategies, one obvious reason is that most companies' strategic thinking is not their core management capability.

In fact, the company is gradually outsourcing more and more strategic planning work.

Companies often rely on consulting firms to provide strategic directions instead of cultivating strategic thinking capability as a core competency of top executives.

Clayton Christensen, a professor at Harvard Business School, will introduce a complete set of methods to help company executives develop their own creative and coherent corporate strategy and implement them.

More importantly, managers can use this method repeatedly to reassess the direction of the company's development.

In this way, it not only develops its own ability in strategic thinking, but also enhances the understanding of the relationship between strategic decision and market.

In the formulation and implementation of the company's competitive strategy, managers often face two difficult problems: first, ensure that the company strategy does not reflect the bias of the management team. These prejudices may originate from the past successes of the company. The second difficulty is that once the company has formulated a practical strategy, it must ensure that its resource allocation accurately reflects the company's strategic thinking.

In other words, the corporate strategy must reflect the reality of the company, and the allocation of resources must reflect the company strategy.

However, few companies can really achieve this consistency.

It is very difficult for the company to formulate a coherent and detailed strategy to achieve the company's goals.

This paper will introduce a method to solve this problem in three stages: the first stage is to clarify the fundamental problems that must be solved by the company strategy; the second stage is to formulate the company strategy; the third stage is to formulate plans of action for the implementation of the company strategy.

The first stage is to find out the driving force in the company's competitive environment.

The first stage of the strategy is to find out the real reason for the company to solve the problem, that is, driving forces, that is, the factors of economy, population structure, technology or competition that exist in the company's competitive environment. They either pose a threat to the company or bring opportunities to the company.

When defining the driving force, the management team must take two steps.

First, the team members must make some assumptions through brainstorming. Secondly, a diagram is given to show how the driving force actually works. This process is called mapping, so as to test the previous assumptions and deepen their understanding.

The second stage of the company's strategy is to formulate a company strategy for driving forces. The formation of the company strategy includes three steps: first, you need to brainstorm ideas and put forward various ideas on the measures you need to take, then plan action plans for all the driving forces; secondly, you must draw these plans in a matrix diagram to see if they are in harmony. Finally, you need to draw a chart to specify clearly the tasks that various functional departments need to undertake in implementing the company strategy.

The strategy of brainstorming is to sort out the driving forces according to the importance. The executive group starts with the most important driving force, and puts forward various preventive measures or measures that can be taken by brainstorming one by one against all the driving forces. They should be concrete and action oriented.

When making a company strategy by using this method, the actions taken against a certain driving force will be contradictory to actions taken against another driving force.

When drawing, executives should place the driving force in order of importance in the top of each column in the matrix. The company's main functions are listed on the left side of each row, and then fill in the corresponding boxes in the matrix diagram for the strategic summary of each driving force.

Finally, managers can follow the matrix diagram and read out the overall strategic thinking of every driving force.

Through discussion and reconsideration, executives must also discuss and deliberate on the ideas in each grid, so as to make efforts to modify and perfect the measurement standards.

In this assessment process, we should compare each action plan in each row to ensure that they are in harmony with each other and solve any conflict.

A detailed analysis of the strategy of the functional departments can help managers get rid of bondage and take a deep look at what actions should be taken at the conceptual level so that they will not get bogged down in discussions about how to act.

The strategy chart clearly and vividly shows the assumptions made by managers by way of words and numbers that cannot be done.

As the company strategy is generally implemented through various functional departments, Professor Christensen found that the most effective way is to draw a strategic diagram of each functional department, that is, a summary summary at the end of each line in the strategic matrix diagram.

The method of graphic analysis is the same as that of driving force.

First, draw a blank matrix diagram on the active wall chart, then find out the two most important ways to implement the company strategy.

These two ways determine the horizontal axis and vertical axis in the strategic chart.

Executives usually need to repeat several times to draw a strategic map that reflects a profound understanding of the problem.

The third stage of the strategy is to plan for the implementation of strategic projects. The last stage is to make a specific plan for how to use funds and manpower in the implementation of the strategy.

Only when the management is careful to ensure that the allocation of resources is consistent with the company's strategy, can the company implement strategic change.

The comprehensive project plan helps managers to portray corporate strategy as a series of new products, services and process development projects.

If a management team really wants to implement the company strategy, they must be prepared in advance in terms of financial and human resources, so as to carry out a series of projects for each strategic action.

The team should have a general understanding of the objectives, the scale of the project, the risks that may be undertaken, and the sequence of start-up and completion of the projects.

When the team makes a final assessment of the feasibility of the strategic plan according to the actual situation, we must ensure that the implementation of the key projects in the strategic plan is within the company's capability.

A senior manager of a company can develop his own outstanding skills in this area by making strategic plans over and over again.

This requires the management team to participate in the formulation of the company strategy in person.

The determination of the driving force and the company strategy for the driving force and regular review will be a process of repeated progress.

If the company takes these jobs as an integral part of the annual plan, the management of the company will become an excellent strategic thinker.

In the case of Butterfield Fabrics, a British manufacturer of 350 million pounds, Butterfield is the largest manufacturer of coated fabrics and glued fabrics in Europe. The company is based on Fabrics.

But in 1995, despite the expansion of the market, the company's sales were stagnant.

All kinds of products are facing fierce competition. Worse still, none of the new products launched by the company in recent years can become a best seller.

Although sales of new products offset the decline in revenue from old products, manufacturing costs also rose, resulting in a decline in corporate profits.

The company's business expansion also failed.

Although Butterfield's strategy is to make full use of the scale effect, business scope effect and reputation that he has as an industry leader, the company's investment in new products and services is also consistent with this idea.

But this strategy is obviously not feasible.

Although it is conscious and eager to solve the problem of the company, the executives differ in what measures should be taken.

They blame the reason for their excessive attention to detail when they are looking at problems.

Instead, they conceived a company manifesto as an action guide for company decision-makers.

"Butterfield textile company's strategy is to develop and produce fabrics that can make the company profitable, value-added, and of high quality," he said.

We will consolidate our position as a service market leader by targeting areas with great potential for development.

How did it happen? Although these managers had made great efforts to improve the company's condition, a year later, the situation remained almost unchanged.

Can Butterfield's situation resonate with many executives? Look at their driving strategies and strategic matrix drawing according to the three step method.