Business Strategy and Change Management
Business strategy and change management
This domain examines how businesses set direction, choose competitive positions and implement change. Questions ask you to analyse a firm's position and recommend a feasible strategy, not merely name a model.
Core rules and concepts
- Strategic planning sets long-term direction; tactics are shorter-term actions. SWOT summarises internal strengths and weaknesses and external opportunities and threats, but analysis must lead to actions.
- Core competence is a skill rivals find hard to copy; strategy should build on it rather than spread resources thinly.
- Porter's five forces assesses industry attractiveness through rivalry, new entrants, substitutes, buyer power and supplier power.
- Ansoff's matrix classifies growth as market penetration, product development, market development or diversification. Diversification carries the highest risk because both product and market are new.
- Growth can be organic or through mergers and acquisitions, joint ventures and franchising. Integration may be vertical (along the supply chain) or horizontal (same stage).
- Change management models: Lewin's unfreeze–change–refreeze and Kotter's steps emphasise urgency, coalition, vision, communication and anchoring. Resistance arises from fear, habit, lost status and poor communication.
Worked example
A bicycle maker with strong brand recognition and spare capacity launches an electric scooter for existing customers. Existing product, existing market would be penetration; new product, existing market is product development. If it instead sells the scooter to a new commuter segment abroad, that is diversification because both product and market are new. The recommendation should consider core competence in two-wheelers, distribution capability, competitor response and cash reserves. Reasoning: the matrix labels the risk, not the decision; fit with resources determines feasibility.
Traps that cost marks
Do not present SWOT without matching actions. Do not call all growth "diversification". Do not assume mergers always create value; integration costs and culture clashes destroy synergy. Do not treat resistance to change as irrational; it may signal legitimate concerns. Do not recommend a strategy without stating implementation and evaluation.