Tuesday, May 15, 2018

How to Use Systems Thinking in Creating Business Strategy

Markets are complex. As you move into a global world you will find this complexity increasing. Supply chains, marketing, legal regulations, production, supplies, personnel and finance seem to be overwhelming consideration. Developing appropriate strategies within all of these processes is daunting. Using systems thinking we can gain a better grasp of this complexity and improve corporate performance (Rajagopal, 2012).

First lets discuss what systems thinking is. It is an ability to think of how the parts mesh within the whole and how it interacts with larger systems.

With systems thinking you can see an entire system interrelating with other parts and how that impacts the success of the whole organization.

As you create strategies you will need to understand how all of these parts work together to create success in the organization as it competes in the market.

Many times it is beneficial to include key personnel in the strategy creation process that understand these individual chains. It is up to the executive team to connect them together in a way in which you can see how the entire organization works.

One of the best ways to do this is to map the entire system through first understanding how they create and sell the final produce. Further grasping how the functioning of one system and changes in its parts impacts the whole will help you find places that need adjustment.

You will also want to compare your businesses systems approach to the systems of other companies to see where your strengths, weaknesses, opportunities and threats occur. If your system has advantages they should be included in your strategy to maintain competitive positions.

Rajagopal (2012). Role of Systems Thinking in Developing Marketing Strategy: Some Conceptual Insights. Journal of transnational management, 17 (4).

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