Development of a strategic planning approach for medium-sized business units within B2B companies. The "SCIA" case.

Abstract

The topic of this paper is the application of strategic planning methods to the particular context of medium-sized B2B companies that are a part of larger groups. This leads us to the following research question that we set out to answer with this paper: “What key process steps must the management of a medium-sized B2B firm, part of a larger group, go through in order to best formalize a strategy?” We first conduct a literature study, laying out the conceptual foundations and conducting a critical review of the strategic planning concepts. As a key result of this analysis, we establish a practical framework for strategic planning that can be applied by the management of medium-sized B2B firms. This framework covers the following steps: company mission, external environment analysis, internal analysis, generic and grand strategies, long-term objectives and finally strategic analysis and choice. To validate these findings, we then apply this framework in an empirical study. We select and apply the tools and concepts that fit the context of SCIA, a business unit of the Nemetschek Group. The aim of this study is to find strategies for growth of this business unit that has been stagnating or growing too slowly in recent years. We find that the application of the framework is straightforward from a qualitative point of view. By applying it, managers can get rather quickly new insights into their environment at different levels and into their organization. They can generate a series of strategic options and understand the relationship between a company’s characteristics and the answers it can bring to the various opportunities, threats and constraints. We also find however that the framework is not well suited for a quantitative approach in medium-sized B2B firms. For the particular context of SCIA, we generate a series of possible strategies that can contribute to fulfil the high-level goals of SCIA. To decide upon which ones to pursue or not, SCIA’s management will need to further work to evaluate the benefits, costs and risks of each strategy.