IT STRATEGY

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The terms ‘Strategy’ & ‘Plan’

Strategy This is at Highest Level and answers “What” we want to achieve in business.Strategy actually is the thinking process required to plan a change, course of action, or organization. Strategy defines, or outlines, the desired goals and why you should go about achieving them. The strategic planning phase involves business thinkers (namely you – the small business owner) determining why, and in a global sense what, you will achieve in your stated goals.

PlanningThis answers “How” in business. A basic management function involving formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. The planning process (1) identifies the goals or objectives to be achieved, (2) formulates strategies to achieve them, (3) arranges or creates the means required, and (4) implements, directs, and monitors all steps in their proper sequence.

The terms ‘Process’ & ‘Tactics’Process

This is step by step methodology of following plan.

TacticsThese are short term actions that are aligned to support success or achieve common goal. Generally at Operational Level.

ExampleConsider one of the company manufacturing eye

glasses. They tend to earn more so strategize their business.

The strategy is use of plastic instead of glass making it light, unbreakable and exhibiting all properties of glass that are required for vision.

The Plan is Circulation RFP, Shortlising two vendors, have discussions, negotiation.

Tactic used with this are decision to collaborate with vendors having small business for locking effect and locking vendor to be continuous supplier prevent copying for years together.

Process here is Floating RFP then step by step execution to final product implimentation.

Types of strategiesCorporate Strategy

Single-business companies have the advantage of focus and rapid response but are vulnerable to problems in their industry. Their corporate strategy must demonstrate the advantages of remaining active in only one industry while evaluating business opportunities in areas with complementary activities. With a goal of optimizing company operations, profitability and growth, the corporate strategy must compare the return of a continuing investment in the single business with the acquisition or starting up of complementary businesses.

Business Unit Strategy The business strategy of a single-business company is similar to that of a business unit of a diversified company except that the business strategy must support corporate strategic initiatives aimed at the single business. The business strategy sets goals for performance, evaluates the actions of competitors and specifies actions the company must take to maintain and improve its competitive advantages. Typical strategies are to become a low-price leader, to achieve differentiation in quality or other desirable features or to focus on promotion.

Types of strategiesOperational StrategyOperational strategies refers to the methods companies use to reach their

objectives. By developing operational strategies, a company can examine and implement effective and efficient systems for using resources, personnel and the work process. Service-oriented companies also use basic operational strategies to link long- and short-term corporate decisions and create an effective management team.

In companies that are marketing oriented, the marketing strategy on a functional level influences the other functions and their strategies. A typical marketing strategy is to determine customer needs in an area where the company has a natural competitive advantage. Such advantages might be in location, facilities, reputation or staffing. Once the marketing strategy has identified the kind of product customers want, it passes the information to operations to design and produce such a product at the required cost. The advertising department must develop a promotional strategy, sales must sell the product and customer service must support it. The marketing strategy forms the basis for the strategies of these other departments.

Strategic management Strategic management involves the formulation and

implementation of the major goals and initiatives taken by a company's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.

Strategic management provides overall direction to the enterprise and involves specifying the organization's objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision making in the context of complex environments and competitive dynamics Strategic management is not static in nature; the models often include a feedback loop to monitor execution and inform the next round of planning.

The Components

Strategic Analysis This is all about the analysing the strength of businesses' position

and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:

PEST Analysis - a technique for understanding the "environment" in which a business operates

Scenario Planning - a technique that builds various plausible views of possible futures for a business

Five Forces Analysis - a technique for identifying the forces which affect the level of competition in an industry

Market Segmentation - a technique which seeks to identify similarities and differences between groups of customers or users

Directional Policy Matrix - a technique which summarises the competitive strength of a businesses operations in specific markets

Competitor Analysis - a wide range of techniques and analysis that seeks to summarize a businesses' overall competitive position

Strategic Analysis Critical Success Factor Analysis - a technique to

identify those areas in which a business must outperform the competition in order to succeed

SWOT Analysis - a useful summary technique for summarising the key issues arising from an assessment of a businesses "internal" position and "external" environmental influences.

Strategic Choice This process involves understanding the nature of

stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.

Strategy Implementation Often the hardest part. When a strategy has been

analysed and selected, the task is then to translate it into organisational action.

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