In this lesson you learned about the the different contexts for strategy across the four types of businesses. You learned that a small business can be constrained by limited funds and strategic capabilities and they generally service niches markets with limited product/service ranges.

1. Strategy and
Strategic
Management: An
overview
Global Business Consultants &
Partners Training Courses
Copyright 2020 Global Business Consultants

2. Chapter 4. Strategy
Development
Lesson 2: Different Contexts for Strategy

3. “A company’s strategy is its action plan
for outperforming its competitors and
achieving superior profitability.....a
managerial commitment to an
integrated array of considered choices
about how to compete.”
Thompson, Peteraf, Strickland, Gamble’s | Thompson et al. 2014 | definition

4. Different
contexts for
strategy
Manufacturing – physical product often augmented with service,
brand image for competitive advantage.
Services – no physical product, competitive advantage based on
intangibles.
Manufacturing
/Service
Organisations
Diverse products/markets/businesses.
Structure/control/parenting. Competitive strategy. Portfolio
management. Resource coordination.
Multinational
Corporation
Single market. Limited product/service range. Competitive
strategy. Strategic capability. Restricted funds.
Small
Business
Diverse sources of funds. Values and ideology. Lobbying.
Stakeholder management.
Voluntary and
Not-for-Profit
Ideology. Direct/indirect external influence (e.g. government).
Competition for resource inputs. Best value in outputs.
Interagency cooperation.
Public Sector
Business Type Key Themes

5. Different
contexts for
strategy
Small Business Context.
 In the context of a small business, the scope of operations are
less strategic and more planning based.
 By less strategic, we mean globalisation, mergers, acquisitions
and diversification.
 Unless the company is a specialist in a specific field, it is always
under significant market pressure from rival companies.
 Arranging resources and developing competencies is generally
is a significant challenge.
 Companies generally do not have a separate strategy team
and rely on strategic planning consultants and coaches.
 The business owner is the most important stakeholder.

6. Different
contexts for
strategy
Small Business Context.
 A Small Business would in most cases have a Single-
Market Strategy.
 In a single-market strategy, a company targets a
narrower range of market segments.
 A small business would use a single-market strategy
focusing on just one segment within the market.
 For example. A local brewpub would be an
example of a brewer targeting a single
geographically defined market segment.

7. Different
contexts for
strategy
Small Business Context.
 Small businesses offer limited products and/or
services range.
 The basis for competitive strategy is mostly ‘price’
under a low-cost strategy or focus servicing a niche
market.
 The Strategic capabilities are somewhat limited and
therefore reliant on supply chain participants.
 Funds are restricted and cashflow could be month-to-
month.

8. Different
contexts for
strategy
Multinational Corporation Context.
 Multinational corporations have a diverse set of products and they
service a range of markets.
 The key strategic issues facing multinational corporations include:
 Organisational structure and control at corporate level.
 The relationships at the various Business Units level is challenging and
in many companies, business units operate in silos.
 The allocations of resources among the business units (in a matrix
structure) is difficult due to conflicting priorities and differing
management styles.
 The coordination of operational logistics across business units and
geographies is a significant undertaking and are complex in nature.

9. Different
contexts for
strategy
Manufacturing and Service Organisations.
 Competitive advantage in service organisations is
more related to the extent to which customers value
less tangible features.
 For manufacturing organizations, the physical products
are central to competitive strategy and services are
merely needed to support the product.

10. Different
contexts for
strategy
Public Sector Context.
 The government is the most powerful stakeholder for
public sector companies.
 The scope and direction is determined by political
influence rather than market conditions.
 Resources remain the main competition that public
sector companies face, rather than the market and
customers.
 Social issues and concerns are generally more important
environment factors than business sense.

11. Different
contexts for
strategy
Voluntary and Not-for-Profit.
 The Values and Ideologies in Voluntary and Not-for-
Profit are central to strategy development.
 These companies have multiple sources of income
and revenue.
 They are more susceptible to lobbying and other
political influences.

12. Congratulations! You’ve completed lesson .
Recap: In this lesson you learned about the the different contexts
for strategy across the four types of businesses. You learned that a
small business can be constrained by limited funds and strategic
capabilities and they generally service niches markets with limited
product/service ranges.
Awesome work!
Now click Complete and then Next for Lesson 3.