Stage 1: Strategic Direction
This is where you will answer the question "Who do we want to be?".
Strategy is all about how - how it will achieve a competitive
advantage, how management intends to grow the business (NPD is only one type of
growth strategy), how it will gain market share, etc. Strategy therefore
consists of the competitive moves and business approaches that management
employs to grow the business, attract and please customers, compete
successfully, conduct operations, and achieve the desired levels of operational
and financial performance. Within large organizations strategy is developed at
- Corporate level strategy (developed for large diversified corporations
that own many businesses)
- Business level strategy (for single business firms)
- Functional level strategy (for each of the functional areas of the
business such as marketing, operations, and human resources)
- Operational strategy (strategy developed for strategically important
activities, e.g. advertising, website operations)
For this exercise you will focus on business level strategy.
Corporate level strategy is not relevant here, and you will develop functional
and operations strategy in stages 3 and 4 of the NPD process.
At the business level you will compete the following tasks:
- Craft your vision, mission, and values
statements: The vision statement takes the long view of the
future and describes who you will be in the future, that is, what can be.
The mission describes what is and describes why the organization
exists, who it serves and what function is performs. The values reflect how
the business will conduct its affairs, and its responsibility to its
stakeholders, its customers, employees, community, and shareholders.
- Develop a generic business strategy:
Will you pursue a low cost strategy, or a differentiation strategy? You must
choose one, since you cannot do both.
- Develop a competitive advantage strategy:
How will you achieve market leadership in your chosen market segment?
- Develop your business model: The
business model describes how and why the business will generate revenues
sufficient to cover costs and produce a acceptable return on investment.