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Any great consulting firm has a suite of classic and emerging business strategy development frameworks. Firms and consultants use these business strategy development approaches to look at, analyze, and solve a number of different types of business problems, which occur in different business situations. Many such business strategy concepts hinge on the foundational thought leadership of Michael Porter, the originator of contemporary business strategy. Through the years, top consultancies, such as McKinsey and Bain, have come up with frameworks that are widely used in the corporate world today.

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Structured business communication is oftentimes framed under a business framework. Crawl Walk Run is a popular way of thinking for representing the progression of organizational change, from an initial crawl stage eventually to walk activities and eventually tothe run phase of automated processes. The Pyramid Principle is ingrained into the presentation storyboarding process. Well known ones include Pinto?s Pyramid Principle, which is commonly used by management consultants and management executives in developing ppt presentations.

A common business strategy problem many methodologies aim to solve is the challenge of achieving sustainable sales growth. In particular, enterprise companies struggle to grow. Companies that have greater than 20% sales growth almost always dwindle down to 8% within 5 years. Between the 1960s and 2010, Fortune 500 companies experience an average growth rate of in less than 6% in real terms (and under 10% in nominal terms). Only about a third of the Fortune 500 companies are able to sustain revenue growth above the national GDP and generate returns above the Standard & Poors 500. Furthermore, real revenue growth is much less stable than ROIC ranging from 1% to 11%. Also, 90% of them are focused across the 4 sectors of Financial Services, Life Sciences, Technology, and Retail. For those companies that do achieve high growth rates, these growth rates also decay quickly. The fact is that most organizations have difficulty achieving significant growth, YoY.

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

There are a number of paths to growth, which can be categorized into the two areas of increasing existing business scope and growing the value from current business. To maximize the value from the existing business, a company can better its value proposition, strengthen customer relationships, optimize pricing, penetrate new markets with their existing offerings, and improve its product mix. To expand the business scope, an organization can branch off into emerging segments, expand into new categories, develop new services, innovate new brands, develop new formats and distribution channels, and expand geographically.

To develop a robust business strategy, organizations all must perform business strategy development beginning with a collective set of beliefs around its business positioning and identified strategic barriers to growth. Proper strategy development involves more than a focus on maximizing profitability. Strategy is about value innovation, strategy is about competitive selection, and strategy is about business agility. To properly gauge and analyze your strategic challenges, you must begin with a comprehensive current state understanding of your situation. The next steps include defining what the future state vision of the organization is and then delving into the details of strategically planning how to achieve that state.

A newer business strategy development idea addressing the growth strategy challenge is called Blue Ocean Strategy. Blue Ocean Strategy represents a shift in thinking to make competition irrelevant, thus creating a blue ocean; whereas, in the traditional competitive environment, business play in a crowded, red ocean business environment. With value identification, a company truly understands what the customer values and prioritizes its resources and business initiatives per such customer-centric beliefs. Effective business execution relies on both concept execution and creating a sustainable organization culture. Value Innovation Strategy thinking focuses on enabling innovation, value creation, and effective execution. With value creation, a business selects and develops the optimal growth option by finding the best tradeoff between costs and value.
business strategy

Knowing how to approach investors is not the only thing you need to know when you meet with an investor. Investors like to see numbers and you need to be well prepared if you dont want to get blown out of the water. Usually, when you meet with an investor, an investor will ask you several questions that can cause you to either win the investment or loose the investment, depending on how you answer these questions and how well you can defend your answers.

How much money are you asking for and what will you use it for? This obviously will be the first and the most critical question an investor will ask you as he starts the meeting with you. How you answer this question can be very critical. If your figures are wrong and your answers dont seem confident to the investor, you can kiss the funding good bye. So, what can I do to have the best chances to win the investment that I need for my company? When preparing your business plan, you should think about spending money to hire the right people and obtain the right resources to have a good realistic prognosis that investors can be interested in. The first thing you should do is to hire an accountant and legal counsel. What? Why do I need a lawyer for? Companies need to be registered and need to have a legal definition. Legal definition is usually the abbreviation that follows your companys name, such as LLC, Ltd., Corp., etc. These are usually the legal titles in the United States. Other countries can have different legal definitions for companies, such as GmbH or AG in Germany, OOO or OAO in Russia, s. r. o. in the Czech Republic, etc. A good business lawyer can find the best legal definition for your company, which investors would like to know. The accountant should be hired to balance the books and have all the percentages of your company well balanced and clearly defined.

The accountant can create the spending plan for the capital. This is very important. When starting a company, you will have many expenses, that the capital is to help finance. Furthermore, an investor will not give you a $3 million investment in one lump sum. You have to have a set of milestones that you will have to meet. You will be given a tranche of $50 to $300 thousand that will be used to accomplish each milestone. Only once a milestone is met, will the next tranche be issued. So what do you need to do with each tranche? Well, this is where the accountant plays an important role. You need to show the investor that you can balance the budget. Even when you do win the investment, if the investor sees something that is not right and milestones are not met efficiently, you might not get the next tranche. This is important. You need to have a percentage for monthly salaries, a percentage for product development, a percentage for real estate, etc. All this needs to be clearly mapped out.

What is your companys valuation? Another important question that you need to answer correctly and have realistic figures for. If your figures are too high or you deliberately hype up your figures, investors will catch on very quickly and see right away that youre not serious. If your figures are too low, the investor might see that there wouldnt be any value and wouldnt be worth their investment. Your accountant should be able to make these projections also. Investors are very savvy in forecasting the markets and basically take risks if the market potential is there for them to make a great profit from their investment.

Knowing this, you need to have your company valuated realistically with realistic figures that investors can relate to and your analysis should be very accurate and coincide with the investors analysis. This is very important. If anything is wrong with the valuation data of your company, the investor might either deny you funding or might make you work on it even more to get it up to their standards.

Whats your exit strategy? Investors invest in your company to make a profit, not to be charitable. This is why you need to plan for an exit strategy. Most investors, especially your classic equity investors, such as venture capitalists, will want to invest in your company for a certain period of time and then they want to make an exit and collect their profits. This exit strategy can also be known as a liquidation event. There are several options for exit strategies, but you should keep all your options open when planning your exit strategy. Keep in mind, that though an exit strategy is important, you should focus more on building a valuable company that can generate a large amount of revenue. There are several exit options that you can choose from below.

IPO or initial public offering, is one option. This is usually when a company is prepared to go out to be publicly traded on the stock exchange. To prepare for this, your company will need to get mezzanine funding, which is usually used to balance the companys books to have it set for public trading.

Management Buyout is a strategy that is a slow sale process of a company. Management buyouts are usually done when the management of a company and either an investment firm or another company work together with the ultimate goal of one company buying the other out.

Leveraged Buyout is also where a company is bought by a financial institution or another company by the buying company leveraging the buyout via a particular debt or a condition for an investment.

These above mentioned exit strategies are not the only options, however. Other exit strategies can include mergers, buy ins, recapitalizations, and more. You might not know what can be the best strategy at the time of the exit, this is why it should be kept open.