1. IB Business & Management
Topic 6 – Strategy
HL ONLY

2. Learning Objectives
Understand the meaning of business strategy and strategic management

3. 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

4. Elements of the strategic framework
Mission and objectives
Assessing the current position – Where are we now and where do we want to be?
Strategic analysis
Three key stages
Setting the company’s mission, vision and obj’s – New direction for the business requires key decisions
Strategic choice
Integrating, coordinating, allocating resources, evaluating success – Outcome should be measured against original obj’s
Strategic implementation
Control and evaluation

5. 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
Youtube the coca cola clipq

6. 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

7. Tactical Decisions Tactics
Concerned with making smaller scale decisions aimed at reaching more limited and measurable goals, which are part of the longer term strategic aim
Tactical Decisions
To sell products in different sized packaging
Short – medium term
Taken by less senior mangers
Impact is often only on one department

8. 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

9. 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

10. 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