This presentation defines Business Strategy, explains it's importance and also outlines steps to define the same for one's organisation or client group. It is based on Jay Galbraith's STAR Model

1. 1
STAR Model- Strategy
Strategyisthe company’sformulaforwinningandisthe firststepof the STAR Model
What isStrategy?
The company’sstrategyspecifiesthe goalsandobjectivestobe achievedaswell asthe valuesand
missionstobe pursued;itsets outthe basicdirectionof the company.The strategyspecifically
delineatesthe productsorservicestobe provided,the marketstobe served,andthe value tobe
offeredtothe customer.Italsospecifiessourcesof competitive advantage.
Importance of Strategy
It isimportantinthe organizationdesignprocessbecauseitestablishesthe criteriaforchoosingamong
alternative organizational forms.
Each organizational formenablessome activitiestobe performedwell,oftenatthe expenseof other
activities.Choosingorganizational alternativesinevitablyinvolvesmakingtrade-offs.Strategydictates
whichactivitiesare mostnecessary,therebyprovidingthe basisformakingthe besttrade-offsinthe
organizationdesign.
Ramificationsof Strategy
Differentstrategiesleadtodifferentorganizations.Althoughthisseemsobvious,ithasramifications
that are oftenoverlooked.There isnoone-size-fits-all organizationdesignthatall companies–regardless
of theirparticularstrategyneeds–shouldsubscribeto.There will alwaysbe acurrentdesignthathas
become “all the rage.”But no matterwhat the fashionabledesignis–whetheritisthe matrix designor
the virtual corporation–trendinessisnotsufficientreasonto adopt an organization design.
All designshave meritbutnotforall companiesinall circumstances.The design orcombinationof
designsthatshouldbe chosenisthe one that bestmeetsthe criteriaderivedfromthe strategy.

2. 2
The figure above dictateshowthe startingpoint“Strategy”appliestothe restof the STAR Model.
Step by Step Exercise for defining the “Strategy” of your Business Unit/
Client Groupi:
Stage 1: AnalyzingYour Contextand Environment
In thisfirststage,youensure thatyoufullyunderstandyourself andyourenvironment.Dothe following:
AnalyzeYourOrganization
Firstly,examine yourresources,liabilities,capabilities,strengths,andweaknesses.A SWOTAnalysisisa
great tool foruncoveringwhatyoudo well andwhere youhave weaknesses,providingthatyouuse it
rigorously.It'smucheasiertoachieve yourobjectiveswhenyourstrategyusesyourstrengthswithout
exposingyourweaknesses.
Also,lookatyour Core Competencies.These highlightyouruniquestrengths,andhelpyouthinkabout
howyou can setyourself apartfromyour competitors.

3. 3
AnalyzeYourEnvironment
Nowyouneedto examine yourcurrentoperatingenvironmenttopredictwhere thingsare moving.Are
there excitingopportunitiesthatyoushouldpursue?Whatfuture scenariosare likelyinyourindustry,
and howwill these impactthe workthatyoudo?
PEST AnalysisandPorter'sFive Forcesare greatstartingpointsforanalyzingyourenvironment.They
showwhere youhave a strongpositionwithinthe largerenvironment, andwhere youmayhave issues.
As youprepare to create yourstrategy,make sure that you're workingina waythat's alignedwith
changesinyour operatingenvironment,ratherthanworkingagainstthem.These externalfactorsare
oftenbeyondyourcontrol,soif youpursue a strategythat requiresachange in one of these elements,
youmay have a long,exhausting,unprofitablebattle aheadof you.
AnalyzeYourCustomersand Stakeholders
Your strategydefineshowyou'llwin,andwinningistypicallyframedbyhow well yousatisfyyour
customers.For-profitcompaniesmustkeeptheircustomersandshareholdershappy.Governments,
nonprofits,andprojectteamsall have otherstakeholderstosatisfyaswell.Strategycreationmust
considerthese needs.
Identifyyourclientsandstakeholders.Whatdoyourclientswant?Andwhoare the keystakeholdersin
your success?A StakeholderAnalysisAddtoMy Personal LearningPlanwill helpyouuncoverthese
needsandpreferences.
Also,lookatyour marketindetail.Answerkeyquestionssuchas"How our marketissegmented?",
"What subpopulationscanwe reachcost-effectively?"and"Whatisour optimal MarketingMix Addto
My Personal LearningPlan?"
AnalyzeYourCompetitors
In a traditional for-profitcompany,youmustunderstandhow yourproductscompare withcompetitors'
products,and whatyour competitors'competenciesare.How easy,ordifficult,isittoenteryour
market?What alternativesdocustomershave?

4. 4
Non-profits,departmental teamsandprojectshave competitorstoo.Otherprojectsandteamswithin
the departmentcompete formoneyandotherresources.Therefore,youmustprove thatyoucan add
value,meetobjectives,andcontribute toorganizational success.
Stage 2: IdentifyingStrategicOptions
In Stage 1, you developedanunderstanding of how yourorganizationorteamfitswithinthe contextof
the internal andexternal environments.Now it'stime tothinkaboutthe differentthingsthatyoucould
do to create a clear advantage,andmeetyourobjectives.Here are some fundamental activitiesthatcan
helpyoumake thisdecision.
BrainstormOptions
Guide yourbrainstormingwithreference tothe organization'smissionstatement,but,dependingon
your role inthe organization,considerhow faryoushouldbe constrainedbythis.
ExamineOpportunitiesand Threats
Your SWOT Analysisidentifiedsome of the mainopportunitiesandthreatsyouface.Usingthisas a
startingpoint,brainstormadditional waystomaximizeyouropportunities,minimize yourthreats,or
perhapseventurnyourthreatsintoopportunities.
SolveProblems
A problem-solvingapproachcanalsohelpatthisstage.If yourproblemisthat you're notachievingyour
goals,ask yourself howyoucanensure thatyoudo. (If everyone inyourindustryfindsithardto deal
witha particularproblem,thenyoumaygaina competitive edgebydealingwithit.)
For example,if youwanttoincrease yourcustomersatisfactionratingsinanindustryplaguedbypoor
customerrelations,yourstartingpositionis"low satisfaction."Brainstormwhythisisthe case,and
create strategicoptionsthatwouldincrease satisfaction.
Stage 3: Evaluating and SelectingStrategicOptions
The final stage isto evaluate strategicoptionsindetail,andselectthe onesthatyouwantto pursue.

5. 5
EvaluateOptions
By thisstage,you've probablyidentifiedarange of goodprojectsthatyou couldrun.You must now
evaluate these tochoose the beststrategicoptions.Considereveryoptionyou've identified,butdon't
make a final judgmentuntil you'vecompletedyourassessment.
Start by evaluatingeachoptioninthe lightof the contextual factorsyouidentifiedinStage 1.What do
these tell youabouteachoption?
Many optionswill be analyzedonafinancial basis.Here,techniqueslike Cost-BenefitAnalysis,Break-
EvenAnalysisAddtoMy Personal LearningPlan,use of NetPresentValues(NPVs) andInternal Ratesof
Return(IRRs) Addto My Personal LearningPlan,andDecisionTreesAddtoMy Personal LearningPlan
are helpful.
ChoosetheBest Way Forward
Withyour evaluationcomplete,younow mustchoose the beststrategicoptionorstrategicoptions,
makingsure that youdon't choose somany optionsthatyouspreadyour resourcestoothinly.
Checkyour ideasforconsistencywithyourorganization'sVision,Missionand Values,andupdate these
if necessary.It'seasyto forgetaboutthese critical elementsduringstrategicplanning,soensure that
whatyou wantto "win"issomethingthatcontributestowardsthe organization'soverallpurpose.
Stage 4: ImplementingStrategy
It's no gooddevelopingastrategyif youdon't implementitsuccessfully,andthisiswhere manypeople
go astray.
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