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IB Business & Management
Topic 6 – Strategy
HL ONLY
Understand the meaning of business strategy
and strategic management
Business Strategy
• Getting from where we are now to where we
want to be in the future
– Business Strategy – A long term plan of action for the
whole organisation
– Strategic Management – The role of management
when setting long term goals and implementing cross
functional decisions that should enable a business to
reach these goals
– Tactic – Short term policy or decision aimed at
resolving a particular problem or meeting a specific
part of the overall strategy
Elements of the strategic framework
Mission and objectives
Assessing the current position –
Where are we now and where do
we want to be?
Setting the company’s mission,
vision and obj’s – New direction for
the business requires key decisions
Integrating, coordinating,
allocating resources, evaluating
success – Outcome should be
measured against original obj’s
Strategic analysis
Strategic choice
Strategic implementation
Control and evaluation
Three key
stages
• Watch the following Coca Cola clips (part 1
and part 2) and see if you can identify the
three key stages of the strategic framework
Strategy hierarchy
• Strategic management is the highest level of
managerial activity
Corporate Strategy
The overall strategy development for the whole
corporation
Business Strategy
Separate business divisions of a large corporation –
product or geographical market business units –
form strategies to achieve and sustain competitive
advantage. If successful, the corporate strategy is
also likely to succeed
Functional
Strategies
These plans are limited to the department's own
functional responsibilities such as product
development strategies, marketing strategies and HR
strategies
Tactics
• Concerned with making smaller scale
decisions aimed at reaching more limited and
measurable goals, which are part of the longer
term strategic aim
•
•
•
•
To sell products in different sized packaging
Short – medium term
Taken by less senior mangers
Impact is often only on one department
Business Strategy & Competitive
Advantage
• Because of globalisation, business’s now need
to compete with not just domestic
competitors but with competitors across the
globe
• These competitors will have either
– Lower costs
– Differentiated products
Michael Porter – argues that these
are the two main factors that can
lead to competitive advantage
We saw this in Unit 1
Core Competencies
• Hamel and Prahalad – developing core
competencies can gain competitive advantage
over other firms in the same industry
– Core competence – an important business
capability
– Core product – product made from a business’s
core competencies, but not for final consumer /
end user
Core Competencies
• A core competence should:
– Provide recognisable benefits to consumers
– Not be easy for other firms to copy
– Be applicable to a range of different products and
markets