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Strategy

Strategy is a plan or serious of plans for achieving an aim. It is the best way for an organization to develop. Setting the goal, answer the question: “What you want to achieve?”

Strategy answers the question how you are going to do it. Top management is involved in deciding a strategy. Some companies set their strategy publically in mission statement as well as their official principles. When a company wants to expand it should take into account several strategies. There are different strategies in business a joint venture, a merger, an alliance, a takeover, and so on. There are some trends in the strategy of large companies towards globalism, toward having more national operations rather then simply having a national business.

There are trends towards more focus on people, toward more changes in the management style of companies, towards more teamwork and more collegiality and less sort of authoritarian ways of running the business. There are lots of ways of developing the strategy for a large companiy.

If a company wants some improvements and change to be made it should take into account their assets and see which once we should keep and which once to sell (dispose of) what markets are growing and what markets best use of their assets. Companies dispose of some assets because they don’t fit with the rest of the company or other things they don’t actively control. If a company needs to improve the operations so the first step in their strategy would be simply to operate better. It means to create better profits better cash generation in better value for the shareholders. It’s very important to stick together all their businesses or subsidiaries so they are able to use each others assets. If a company wants to expand it can merge with another company in the same industry. A merger of equals has a lot of appeal. When a company’s growing it has a number of key management openings (vacancies) it has to fill. By combining two companies with good management teams you automatically build up the strength of the management and you do it quickly.

The company can also widen its customer base and have more distribution channels. In addition, the merger bits all their competitors. But there are some disadvantages as well. For example, 50% of large skill mergers fail. Mergers can fail on a number of levels. They can fail in terms of their benefit to the shareholders, customers, and business partners. So the top management should consider all prose and counts on deciding a merger. In some companies it very important to keep the people. So their focus first on people and then how they corporate then and then how to drive business.