InorganicGrowthStrategy

Activity Based Costing analysis is a business framework created to improve upon the accuracy of conventional forms of costing, so that  business decisions can be  well informed  blue ocean strategy. ABC allows for true profitability to be understood around crucial areas of product lines, customer segments, distribution channels, among other markets. On the other hand, in conventional costing methods, indirect and overhead costs are allocated across all offerings based on a standard, volume-based cost driver, which is quite inaccurate and misleading, and therefore prone to leading to risky business decisions. The reason that Activity Based Costing is better is because it follows a 7-phase approach of gathering cost objects, cost components, key activities, and resources drivers to understand logical cost flows.

For traditional blue ocean strategy thinking, many people rely on the well established business framework Porter’s Five Forces, developed by Michael Porter growth strategy. By evaluating these industry forces, a business can decide on its competitive strategy, which falls into either one of four broad categories: cost leadership, differentiation strategy, cost focus, or differentiation focus. In Porter’s Five Forces, we look into 5 industry forces that affect any vertical, which include internal rivalry, threat of new entrants, buyer power, supplier negotiation power, and threat of substitutive and complementary products.

An important exercise used in strategic planning is scenario planning blue ocean strategy. An crucial activity in the scenario planning framework is defining the primary axes of uncertainty after building a 2-axis growth strategy. Most times, the scenario planning process is performed in a remote workshop setting, whereby decision makers, executives, subject matter experts, and third partyadvisors, are gathered in a 2 day off-site location to discuss on numerous future state scenarios. Scenario planning is used to help businesses plan for and make flexible future estate business growth strategy plans. Scenario planning techniques is also called scenario thinking and scenario analysis.

To develop a robust corporate strategy, companies all must perform growth strategy that starts with a clear understanding of its current situation and identified strategic challenges business strategy. The next steps include depicting what the desired vision of the company is and then delving into the details of  planning how to get to that state. Business strategy is about value innovation, growth strategy is about competitive selection, and strategy is about flexibility. To properly gauge and analyze your strategic challenges, you must begin with a complete, end-to-end understanding of your situation.

When an organization engages in product business strategy, coming up with the pricing strategy is one of the critical component to a successful product growth strategy. Taking a broad perspective, pricing is driven by the strategic intent of whether our goal is to skim the market or to penetrate the market. Largely, the product’s positioning along its product adoption lifecycle will drive its high level business strategy. Pricing strategy starts with a basic question of price skimming versus penetration pricing. To create the an effective pricing strategy, our company need to evaluate within the context of the product’s adoption curve.

Reference: http://learnppt.com/powerpoint/15_Growth-Strategy-Toolkit.php