Business Strategy - The Unknowns
In the first week of November, Associate Professor Dr. Ngo Kim Thanh, lecturer at the National Economics University, gave a presentation to Nghe An businesses on business strategy. The presentation was engaging with a lot of new knowledge. Nghe An Newspaper reporters summarized some of the content after listening to the presentation, as a perspective for businesses to refer to...
(Baonghean.vn)In the first week of November, Associate Professor Dr. Ngo Kim Thanh, lecturer at the National Economics University, gave a presentation to Nghe An businesses on business strategy. The presentation was engaging with a lot of new knowledge. Nghe An Newspaper reporters summarized some of the content after listening to the presentation, as a perspective for businesses to refer to...
Business strategy is art
Economists such as Alain Threlart, believe that: “Strategy is the art that businesses use to fight against competition and win”. M.Porter believes that: “Strategy is the art of building solid competitive advantages for defense”… Those who are interested in the success of a business, want the business to have a solid position in the market, all see that business strategy is very important, it determines the success or failure of the business. It is the “compass” for all production and business activities of the business.
According to Associate Professor Dr. Ngo Kim Thanh, to develop a correct business strategy, one must have a strategic vision. One must know oneself and others, identify the company's development direction, and changes in the product - market - customer - technology aspects to enhance. One must determine who one is, where one is, what position one is in, and what one wants. A strategic vision is a road map showing the path the company takes to develop and enhance its business. It paints a picture of the destination and gives reasons to go there. Therefore, managers must identify the market to pursue, future focus and technology, products, customers, etc.
In fact, we often hear slogans that express the mission of companies, such as: "Say it your way", "Speedy steps", "Always with you wherever you are", "Vietnam Prosperity Bank"... Those are the mission statements of businesses. They are part of the strategy, the brand and lead to the goal.
The goals of each enterprise are very different. Associate Professor, Dr. Ngo Kim Thanh gave many specific examples of the goals of some large enterprises. Each enterprise has its own specific strategy, demonstrating its strength in the integration trend. In Nghe An, Nghe An Tate & Lyle Sugar Joint Venture chose a product-intensive strategy. Investing in modern equipment and technology to create high-quality products with "class" in the market to compete. To achieve that, Tate & Lyle recruited good engineers and experts from other countries to manage the technology, while expanding the market nationwide, participating in exports with the Meli branded sugar products.
Three basic competitive strategies
According to economist M. Porter, the three basic competitive strategies are: Cost dominance strategy, product differentiation strategy, and focus strategy. Small-scale enterprises that focus on low costs will be more successful, which means the cost of a compact apparatus, the wife can be an accountant, the husband can be a director and a driver. Or the company headquarters is also a residence, the costs of office, reception, service, etc. are all reduced like the private enterprise model. Large-scale enterprises, if they know how to reduce staff, rearrange the apparatus, increase work capacity, and reduce costs at each stage, will also increase their competitiveness. Regarding products: Small enterprises focus on product differentiation, making "unique" products, large enterprises need to differentiate products to compete.
When entering the "playground", businesses must identify competitors in the industry, competition between existing companies in the industry, potential competitors, risks from new competitors, potential pressure from customers, and potential pressure from suppliers, and anticipate alternative products. This is an extremely fierce business environment for both old and new businesses. Business leaders must know how to clearly identify direct competitors, recognize and analyze competitors' strategies, assess the strengths and weaknesses of competitors, predict competitors' reactions, design a database of information about competitors, and evaluate the correlation of forces between competitors. There are businesses that, after analyzing competitors, realize their low competitiveness and know how to form alliances and cooperate with each other to succeed.
No industry or product can last forever, it all has a stage of emergence, a stage of development, a stage of saturation, a stage of decline and elimination. Therefore, in business strategy, the Board of Directors must know to be ready to change and have a suitable exit strategy. When you win, it means that you have many competitors, so you must withdraw at the right time to "preserve your strength". In addition, businesses must also "renew" their products.
In competition, we must also provide many types of products: high-profit products, profitable products, break-even products, loss-making products corresponding to high-profit customers, unprofitable customers, loss-making customers to expand market share, increase business growth, and product growth. That is a series of difficulties, a concentration of collective intelligence, of leadership, both art, strategy, and science to succeed.
However, business strategy must always be flexible, often only built in a period: 3 years, 5 years, 10 years... Business strategy for those who have not studied and researched management and business science will always remain a mystery.
CHAU LAN
