Strategy - resources of a business

In our introduction to the topic of business strategy, we used Johnson & Scholes' definition stating that "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations". So, what are these "resources" that a business needs to put in place to pursue its chosen strategy !usiness resources can usefully be grouped under several categories" Financial Resources :- #inancial resources concern the ability of the business to "finance"

its chosen strategy. #or example, a strategy that re$uires significant investment in new products, distribution channels, production capacity and wor%ing capital will place great strain on the business finances. Such a strategy needs to be very carefully managed from a finance point&of&view. 'n audit of financial resources would include assessment of the following factors"
Existing finance & (ash balances funds & !an% overdraft & !an% and other loans & Shareholders' capital & )or%ing capital *e.g. stoc%s, debtors+ already invested in the business & (reditors *suppliers, government+ Ability to raise new funds & Strength and reputation of the management team and the overall business & Strength of relationships with existing investors and lenders & 'ttractiveness of the mar%et in which the business operates *i.e. is it a mar%et that is attracting investment generally + & ,isting on a $uoted Stoc% -xchange If not, is this a realistic possibility Human Resources :- .he heart of the issue with /uman 0esources is the s%ills&base of the

business. )hat s%ills does the business already possess 're they sufficient to meet the needs of the chosen strategy (ould the s%ills&base be flexed 1 stretched to meet the new re$uirements 'n audit of human resources would include assessment of the following factors
Existing staffing resources & 2umbers of staff by function, location, grade, experience, $ualification, remuneration & -xisting rate of staff loss *"natural wastage"+ & 3verall standard of training and specific training standards in %ey roles & 'ssessment of %ey "intangibles" & e.g. morale, business culture

Changes required & )hat changes to the organisation of the business are included in the strategy *e.g. to resources change of location, new locations, new products+ & )hat incremental human resources are re$uired & /ow should they be sourced *alternatives include employment, outsourcing, 4oint ventures etc.+ Physical Resources :- .he category of physical resources covers wide range of operational

resources concerned with the physical capability to deliver a strategy. .hese include"
Production facilities & ,ocation of existing production facilities5 capacity5 investment and maintenance re$uirements & (urrent production processes & $uality5 method & organisation & -xtent to which production re$uirements of the strategy can be delivered by existing facilities & 6ar%eting management process & 7istribution channels !nformation technology & I. systems & Integration with customers and suppliers Intangible Resources :- It is easy to ignore the intangible resources of a business when

arketing facilities

assessing how to deliver a strategy & but they can be crucial. Intangibles include"
"oodwill & .he difference between the value of the tangible assets of the business and the actual value of the business *what someone would be prepared to pay for it+ & 7oes the business have a trac% record of delivering on its strategic ob4ectives If so, this could help gather the necessary support from employees and suppliers & Strong brands are often the %ey factor in whether a growth strategy is a success or failure & 8ey commercial rights protected by patents and trademar%s may be an important factor in the strategy.

#eputation

$rands

!ntellectual Property