Strategy of an organization

When we talk about strategy, what does it mean? I will think about some decisions made towards the target. For example, when i play chess, i will decide which steps i should take and how i can respond to opponent's move in order to win. So, organizational strategy should be steps that have been decided by organization to achieve its objective. Actually, in a much formal way to explain strategy, it is about how people decide to organize the resource to enhance performance of an enterprise. I know that strategy is very important for an organization to arrange its long term directions. 

I have learnt a lot of useful analysis tools in this month and some of the tools have been mentioned in the previous posts, namely, Porter's five force and PESTLE analysis. However, the Porter's five force and PESTLE analysis are only useful for external environment. Here are some new techniques that i have learnt to analyse the internal environment of an organization.I will use Easyjet as an example.

Value chain analysis 

calculates the value added at each stage of a manufacturing or service process

SWOT analysis

summarizes the internal and external issues and help identify potentially useful development

Using Easyjet as an example,   

Strengths: 

1.    Lower training and supervisory costs due to usage of two aircrafts models

2.    Low fares due to greater seat occupancy

3.    Strong e-business

4.    Flights to main terminal airports throughout Europe

Weaknesses:

1.    Only focus on price and convenience

2.    Only focus on Europe

3.    Lack of attracting business travelers

Opportunities:

1.    More people take flights

2.    Vertical and horizontal expansion

3.    Fleet growth with low cost

Threats

1.    High costs due to the increase in the environmental taxes

2.    Increase in the price of aviation fuels

3.    the price and route competition will become more intense. 

Followed by identifying the external and internal environment of an organization, I can make a choice on deciding strategy. The decision making can be made at two different levels, corporate level and business unit level. 

Corporate level  - Overall direction of the organization by using Ansoff''s matrix. The matrix allows marketers to consider ways to grow the business via existing and/or new products, in existing and/or new markets 

Ansoff''s matrix 

Using Easyjet as an example, it uses to three different strategy choices of Ansoff's Matrix.

Market Penetration: 

Easyjet is targeting business travellers with its low cost airfares and frequent flights to popular destinations. The best way to achieve this is by gaining competitors' customers. Other ways include attracting non-users of your product to use more of your product/service, with advertising or other promotions.

Product Development: 

Easyjet has grown by introducing new flight routes 

Diversification: 

Easy group is bringing forward new business ideas for its existing market segment such as easy Internetcafe, and the latest venture easy money.

Business Unit Level - How to compete by using Porter generic competitive strategy. It allows marketers to consider to compete with the rivals in three ways: cost leadership, differentiation and focus. 

Using Easyjet as an example,

It targeted businesses and travel bookers in its UK home market, as well as Zurich and Paris. Easyjet enjoys the cost advantage; therefore, it will choose the strategy in the way of cost focus.

Above, i have pointed out the process of an organization to make strategy decision. We need to keep in mid that the analytic tools for market environment are only reliable in the stable environment. However, the market environments are unpredictable and many factors may affect the organization. For example, clothing industry can be easily affected by the fashion trends and the customers' style.  Therefore, organization should try to adapt the new environments instead of just following the original strategies. I realize that when the organization run their business with their strategies, there will be a lot of problems that will appear. In order to make a flexible management of the organization, organization sometimes need to give up their old strategy by implementing a new strategy that fit in the present. Replacement of strategies will never stop due to rapid change of market environment.