CorporateGrowthStrategy

Activity Based Costing (ABC) analysis is a business framework developed to improve upon the accuracy of traditional forms of costing, so that key business decisions can be performed in a way that is fact based  blue ocean strategy. ABC allows for logical profitability to be understood around crucial areas of product lines, customer segments, distribution channels, among other markets. Whereas, in conventional costing methods, indirect and overhead costs are distributed across all product offerings based on a standard, volume-based cost allocation, which is quite inaccurate and misleading, and therefore lends itself to leading to risky business decisions. The reason that Activity Based Costing is good is because it follows a 7-phase approach of determining cost objects, cost line items, process activities, and resources drivers to understand true cost flows.

For traditional blue ocean strategy thinking, many people rely on the time-tested business framework Porter’s Five Forces, developed by Porter growth strategy. By evaluating these industry forces, a business can decide on its competitive strategy, which falls into either one of four focus areas: cost leadership, blue ocean strategy, cost focus, or differentiation focus. In Porter’s Five Forces, we analyze various forces that affect any competitive environment, which include internal rivalry, threat of new entrants, customer power, supplier negotiation power, and threat of substitution products.

An important activity used in strategic planning is scenario analysis blue ocean strategy. One important task in the growth strategy is choosing the primary axes of uncertainty after building a 2-axis growth strategy. Sometimes, the growth strategy is performed in an off site workshop setting, whereby decision makers, upper management, subject matter experts, and third party consultants, are gathered in a 4 day off-site conference to decide on various future state scenarios. Scenario planning is used to help businesses plan for and make flexible long term business growth strategy plans. Scenario planning techniques is also called scenario thinking and scenario analysis.

To build a rigorous corporate strategy, businesses must perform business strategy development beginning with a agreed upon understanding of its current situation and existing strategic barriers to growth business strategy. The next steps include forming what the future state vision of the company is and then going into the details of  planning how to achieve that state. Business strategy is about value innovation, strategy is about focus, and growth strategy is about speed to market. To properly gauge and analyze your strategic challenges, you must begin with a comprehensive current state understanding of your situation.

In an product launch strategy, coming up with the pricing strategy is one of the critical component to success growth strategy. Taking a broad perspective, pricing is driven by the strategic intent of whether our corporate objective is to skim the market or to penetrate the market. By and large, the product position along its consumer adoption lifecycle will determine its high level pricing strategy. Pricing strategy begins with a simple question of market skimming or penetration pricing. To develop the an effective pricing strategy, the marketing team must need to look at things under the backdrop of the product’s adoption curve.

Citation(s): http://learnppt.com/powerpoint/15_Growth-Strategy-Toolkit.php Wharton Publication: Growth Strategy under Direct Competition, Feb 2011 (Issue)