Secrets of the basic principles of business strategy in the global era

Strategy Formulation

Strategy formulation is the process of strategic decisions taken by the Company, to ensure the company is able to achieve long-term goals, adapt to changes in the business environment.

At the corporate level, management decides how to allocate available resources, and how to innovate to maintain competitiveness.

Manajemen strategi STIE Indocakti 

Objectives of Corporate Level Strategy Formulation:

1. Ensure long-term growth.
2. Increase competitiveness
3. Reduce dependence on a single source of revenue.
4. Increase profitability and shareholder value

Growth and Diversification Strategy

1. Growth Strategy: Expansion of the company into new markets, development of new products, mergers or acquisitions).
2. Diversification: expanding products into other industries.

International Strategy

International strategy involves expanding the business into foreign markets, to gain new markets, and to seek the benefits of global economies of scale.

International strategy options.

1. Global: Same products and services around the world.
2. Multinational: Tailoring products and strategies to local markets.
3. Transnational: Combining global efficiency with local flexibility.

Merger and Acquisition Strategy Formulation

1. Mergers involve the merger of two companies and the acquisition of one company by another. 
2. Merger is Two companies merging into one entity, while Acquisition is One company taking over another.
3. Mergers and acquisitions

The main steps of international strategy:

1. Global Market Analysis

Conduct a comprehensive analysis of potential countries, including economic, political, social, and cultural conditions, assessment of market trends, consumer demand, and local and global competitors. Evaluate market feasibility by considering potential benefits, barriers, and risks.

2. Identify Competitive Advantages

Understand the company's strengths that can be competitive in international markets, such as product innovation, brand strength, technology, or production efficiency.

3. Selection of International Market Entry Methods

1. Export
2. Partner with a foreign company.
3. Form a joint venture with a local company to combine expertise and resources.
4. Extend the license of brand or franchise rights to local partners.
5. Direct Investment

4. Strategy Adjustment to Local Conditions

Modify products according to local culture, especially features, design. Understand local rules, including trade policies, tax regulations, labor laws, and product standards.

5. Building a Distribution Network

Establish relationships with local distributors and have a strong distribution network. Ensure an effective and efficient supply chain

6. Develop a Global Marketing Strategy

Design marketing according to local preferences, using relevant media.

Adjust prices according to local purchasing power

7. Cultural Adjustment

Manage intercultural relationships, both with local employees and business partners, to create harmonious integration.

8. International Risk Management

1. Manage potential risks such as regulatory changes, political instability, or international trade rules.
2. Mitigate currency exchange rate risk
3. Prepare operational contingencies to deal with supply chain uncertainties.

9. Strategy Implementation and Control

1. Ensure effective human resource management.
2. Establish a performance measurement system
3. Implement an evaluation and improvement system as international market conditions change.

The main steps of the merger or acquisition process:

1. Target Identification and Selection

1. Conduct an in-depth analysis to identify potential companies as merger or acquisition targets.
2. Conduct a thorough assessment of the financial health of the target,.

2. Negotiation and Deal Structure

1. Price Bidding and Negotiation.
2. Determination of Deal Structure.

3. Integration and Implementation

1. Prepare an integration plan including unification of operations, technology, employees, corporate culture, and marketing strategy.
2. Manage communication with employees, shareholders and customers to explain the integration process.
3. Evaluate performance and ensure expected synergies are achieved.