Booz Allen Basics: Business Strategy Development in an ...

For many businesses, the primary objective of the business strategy development process is to develop a viable growth strategy. Companies achieving greater than 20% sales growth typically dwindle down to 5% within 5 years. Furthermore, real revenue growth is much less stable than ROIC ranging from 1% to 11%. Only about a third of the Fortune 500 companies are able to sustain top-line growth above the national GDP and generate returns above the S&P500. Over the last 50 years, Fortune 500 companies experience an average growth rate of in less than 8% in real terms and under 10% in nominal terms. In particular, enterprise companies struggle to grow. The fact is that most companies have difficulty achieving significant growth, YoY. For those companies that do achieve high growth rates, these growth rates also erode rapidly. Also, 90% of them are focused across the 4 sectors of Financial Services, Life Sciences, Technology, and Retail & Distribution.

Business strategy includes the topics of corporate strategy, marketing and brand strategy, sales strategy, as well other areas of strategic thinking. Within growth strategy, we include both natural growth and inorganic growth, namely M&A. Sales strategy includes distribution strategy, direct sales strategy, and business development. Business strategy is often done within a yearly strategic planning environment, typically conducted in a week long day remote location with executives and key personnel, both inside and outside the business. Marketing strategy includes advertising strategy, product launch strategy, as well as SEO strategy. Marketing strategy and sales strategy are many times discussed in unity, but are completely different in actuality.

Any great consulting firm has a suite of classic and emerging business strategies. Many such frameworks and concepts hinge on the seminal teachings of Porter, the father of contemporary business strategy. Firms and consultants practice these strategies to address, understand, and solve a number of different types of business problems, which occur in different business scenarios. Over the past several decades, leading consultancies, such as McKinsey and BCG, have researched strategies that are widely used in the corporate world today.

Understanding how to build a business case requires a number of critical activities. A bottoms-up capital budgeting benefit case must be created and analyzed and a business case should be created for financial benefits tracking. The financial analysis involved includes financial reporting, ratio analysis, breakdown ROCE, stakeholder value analysis, and driver sensitivity analysis. Usually, creating a business case includes conducting targeted interviews , analyzing company financial reports, creating the business case financial model, and developing a top-down business case template.

There are a number of paths to growth, which fall under the two areas of growing business scope and increasing value from the existing revenue streams. To maximize the value from the existing business, a business can improve upon its value proposition, strengthen customer relationships, optimize pricing, break into new markets with its existing services, and improve its product mix. To expand the business scope, a company can branch off into new segments, expand into new categories, develop new product offerings, create new brands, develop new formats and distribution channels, and expand geographically.
Business Strategy Development

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