1.3Business strategy management

Business strategy is the activity of mapping out a company's path to winning: where to concentrate limited resources, how to compete, and how to deliver value to customers. This section walks through frameworks for analyzing the current situation, ways to reach customers, ways to measure goals, and the systems that turn strategy into day-to-day operations.

1.3.1Competitive strategy (SWOT, PPM, core competence)

• SWOT analysis organizes internal factors—Strengths and Weaknesses—and external factors—Opportunities and Threats—to guide strategic direction.
• PPM (Product Portfolio Management) classifies products and businesses along two axes—market growth rate and market share—into four quadrants (star, cash cow, question mark, dog) to help decide where to allocate resources.
• Core competence is a company's distinctive, hard-to-imitate core strength or technical capability. It is a source of long-term competitive advantage.

1.3.2Marketing (the 4Ps, segmentation)

• The 4Ps organize marketing actions into four elements: Product, Price, Place, and Promotion.
• Segmentation divides the whole market into sub-markets (segments) by criteria such as age, region, or need. Together with targeting (choosing which segment to pursue) and positioning (deciding the company's stance), this is known as STP.

1.3.3Business strategy and goal evaluation (KGI, KPI, BSC)

• KGI (Key Goal Indicator) expresses the ultimate goal of a business strategy in numbers (e.g., sales of X yen). KPI (Key Performance Indicator) measures the intermediate progress or process toward achieving the KGI (e.g., number of visits, close rate).
• BSC (Balanced Scorecard) is a management technique that evaluates performance in a balanced way across four perspectives: financial, customer, internal business process, and learning and growth. Its distinguishing trait is that it does not focus solely on financial metrics.

1.3.4Management systems (CRM, SCM, ERP, value chain)

• CRM (Customer Relationship Management) centrally manages customer information and interaction history to strengthen customer relationships. SCM (Supply Chain Management) optimizes the entire supply chain, from raw-material procurement through manufacturing, logistics, and sales.
• ERP (Enterprise Resource Planning) integrates a company's core operations—accounting, HR, production, sales—into a single system to unify information. The value chain breaks down the series of business activities from raw materials to customer delivery by function, analyzing where added value is created.

Picture a mid-sized confectionery maker considering a new product launch, and walk through this section's toolkit end to end. First, a SWOT analysis organizes the picture: "our strength is proprietary manufacturing know-how (a core competence), our weakness is a small advertising budget, an opportunity is rising health-consciousness, and a threat is a competitor's low-price strategy." Mapping the existing product line onto the PPM's four quadrants places the flagship product—high share, steady cash flow—as a "cash cow," and the new product candidate—high market growth but unknown share—as a "question mark." For the launch, segmentation carves out "health-conscious people in their 30s and 40s" as the target sub-market. Structuring the plan with the 4Ps gives Product (a new low-sugar flavor), Price (a somewhat premium price point), Place (convenience-store-centered distribution), and Promotion (social media ads). For goals, the KGI is set as "500 million yen in sales within the first year," and KPIs such as "monthly store placements" and "social media mentions" track progress toward it day by day. Performance is checked not just via KGI/KPI but in a balanced way across the BSC's four perspectives (finance, customer satisfaction, manufacturing process efficiency, and employee skill development). Behind the scenes, SCM optimizes everything from raw-material procurement to store delivery, CRM centrally manages customer feedback and complaints, and ERP integrates accounting, production, and sales data so management can see it in real time. Finally, breaking the whole flow—from raw materials to the customer—into a value chain identifies which step creates the most added value, informing the next investment decision.

1.3.5Section summary

• SWOT (strengths/weaknesses/opportunities/threats), PPM (growth rate x share, four quadrants), core competence (a hard-to-imitate core strength)
• 4Ps (Product/Price/Place/Promotion) and segmentation deliver value to customers. KGI = ultimate goal, KPI = progress toward it
• BSC balances evaluation across four perspectives. CRM (customers), SCM (supply chain), ERP (integrated core operations), and the value chain (analyzing added value)