Strategic driver

Strategic driver
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Methods and techniques

Strategic drivers are determining factors of key success factors , durable and high prosperity, and, moreover - key value propositions. Companies usually have more than one factor, among three up to five strategic drivers at the same time, there is a main subcategory of the whole factors, which have a big influence for the industry contest where participate a lot of companies(S. Rush 2011, p. 38).

The place of the strategic drivers in the company[edit]

They key strategic drivers must present the factors, which company has decided to choose for the enclosure in and stand out with a purpose to participate in the competition in the industry. Leadership establishes that factors which are the most important (priorities) at the level of the organizing process due to comprehension of the strategic drivers key and, moreover, the corresponding priority amid that strategic driversS. Rush 2011, p. 38).

For instance, the delivery and cargo industry include a big quantity, of various key drivers. A few firms concentrate their attention on costs, quickness of delivery, or universal range. YRC, famous trucking company, decided to rival due to two main drivers like: delivery at term and dependability. The firm found out that their customers put these value as the most important over all other factors: customers want their shipment to be delivered at the time it was promised to come (though the transit time might be even not so fast as in the rival companies), and their goal is to supply goods in not damaged or harmed condition. Such example of YRC calls attention to the significant singularity of the strategic drivers. Strategic drivers represent a profound realization of the customer and his needs, actual possibilities of the company and that possibilities it can have in the perspective and comprehension of the industry(S. Rush 2011, p. 39).

After the moment when the company is conscious of their strategic drivers, they should to set range priority of that drivers. It is not easy to decide which one single driver is more significant than other one. It is considered to affirm that every of them is significant as much as others, but such accepted strategy is hazardous and may be finished with a strategy that tries to suit everything to everyone. The reason, that causes occasion for estimating a comparatively low quantity of that drivers and putting them in a range of the most important is done for ensuring the company starts concentrate on the template of the essentially restricted investments, which will cause to the successful strategic steppingstone. To place resources in a rational way, strategic leaders should make harsh decisions. Except this they should inform everyone in the organization about the accepted prioritization(S. Rush 2011, p. 39).

The process that includes realization of strategic drivers and ranging priorities can take some time. It needs usually different actions during the course of the months or years, and after that the company has to be able acquire a knowledge of the result of that actions(S. Rush 2011, p. 41)

Examples of strategic drivers[edit]

Strategic drivers can also be new findings, new scientific knowledge, trials, labor disputes, new laws and so on. Disposing the information what influences the firm to work and what will keep it on the same level is one of the main things in basic planning. It is considered that when the worker is conscious of the strategic drivers of the company he works in, he is able to satisfy all IS or IT demands. Much more significant and appropriate to the task that should be done, is fulfilling a domain system to please to that drivers which have the impact the tomorrow of the business(J. R. Shapiro, J. Boyce 2006, p. 275).

In the film Wall Street, character of Michael Douglas estimated his strategic driver, which motivated him to raid other companies and earn as much as possible, as greed. Greed actually is accepted to be a main strategic driver in many different organizations and companies. However, not all companies are like that., And still is the controversy whether that companies depend on profit or greed . The Internet can be a strategic driver or the aspiration of the CEO or enclosure in technologies or other things(J. R. Shapiro, J. Boyce 2006, p. 275).

Resource-based strategy[edit]

That approach asserts that company should position itself on the strategy that is ground on their exceptional and incomparable resources and possibilities than on their services and products that have been created already from those capabilities. It is considered to say that in such approach that demands and products can appear or disappear, however capabilities and resources will remain in existence(P. Gottschalk 2005, p. 50).

Cost drivers[edit]

The main statements of the cost drivers are(J.K.Shank, V. Govindarajan, S. Govindarajan 1993, p. 59-60):

  • Value chain analysis is the broader framework; the cost driver concept is a way to understand cost behavior in each activity in the value chain. Thus , ideas such as ABC are only a subset of the value chain framework.
  • Volume is not enthralling way to interpret the cost behavior, for strategic research,
  • Much more helpful in a strategic meaning is to interpret position of the costs in bounds of the choices in the system and realization skills that create the rival place of the company among competitors.
  • Not every strategic driver is so important as others for the whole time, but a few (not one) of that drivers always stay in the same position of the significance.
  • A specific cost analysis structure is decisive for comprehension of the positioning of the organization (for each cost driver).
  • Different cost drivers often have a big impact on various value actions in the chain of worth. The example can be: the comparable cost driver for marketing is market percentage, in which costs of promotion are often changeable.

References[edit]

Author: Diana Fandul