Implications of Business Strategy for Training

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  • 0:04 Definition of Business…
  • 0:45 Types of Business Strategy
  • 2:08 Impact of Business…
  • 3:53 Keeping Training Relevant
  • 4:33 Aligning Training & Strategy
  • 5:17 Lesson Summary
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Lesson Transcript
Instructor: Anelia Ras
In this lesson, we'll discuss how business strategy can impact training. We'll look at the implications of business strategy on employee training and how to align training with business strategy.

Definition of Business Strategy and Training

Each business has goals. Most want to make money; many want to be the best at what they do.

A business strategy is a plan for how the business will achieve its goals, meet the expectations of its customers, and how it will sustain a competitive advantage in its market. A strategy is important as it outlines what needs to happen and how it needs to happen. The strategy guides the business and employees.

In order to reach its goals, a business will often conduct training, which is teaching or developing skills or knowledge needed to perform the job. Training usually has specific goals such as building competencies, improving performance, and increasing productivity.

Types of Business Strategy

While businesses are varied and may seem to focus on many different things, there really are only three broad strategies a business can choose to follow. These are:

  • Cost leadership strategy: In a cost leadership strategy, the business tries to keep its costs as low as possible by being efficient. If a business has low costs, it can sell its products at a lower price than competitors. This should result in higher volume sales, which is how the business makes a profit. Examples of businesses with a cost leadership strategy are Costco or Sam's Club, Netflix, and McDonald's.

  • Differentiation strategy: A business with a differentiation strategy tries to differentiate their product in some way: it can be rare, personalized, highly effective, or any other attribute that a consumer finds desirable. Examples of businesses that follow a differentiation strategy are Apple, BMW, and designer clothing.

  • Focus/niche strategy: The third strategy a business may choose is a focus or niche strategy. A focus strategy can be a combination of cost and differentiation strategies. The business can also focus on a small niche or target market that wants very specific attributes in the product or service. Many small businesses follow a focus/niche strategy. Some examples are Diapers.com and children's dentists.

Impact of Business Strategy on Training

Let's look at some examples of the skills or behaviors that drive each strategy and what that means for training.

In a cost leadership strategy, there will be a focus on certain behaviors and values that drive the strategy. These include reduction of waste, streamlining of processes, and continuous improvement. To implement continuous improvement, there are a few things the business can do including training the employees. The training group should work with the business to determine the best way to create a culture of continuous improvement among employees. The plan may include different training interventions. However, because continuous improvement is a behavior change, just training employees is not enough. The change will need to be anchored through various initiatives, and it will need to be a continued effort across the organization.

In a differentiation strategy, there's a strong focus on the product. Factors that drive this strategy include strong research and development, a focus on brand marketing, and patenting and trademarking. To build the brand marketing skills in employees, the effort should extend beyond the marketing department. All employees need to be brand ambassadors and understand the benefits and key attributes of the brand. Training might build brand details into the onboarding material that new employees receive. The sales people need continuous training on the brand attributes and what differentiates it from other brands.

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