How to Develop a Business Strategy — Part 1

While companies think of a strategy for a product or even think of the strategy for the whole organization, they generally depend on past information. Although the past is useful to uncover certain aspects of the strategy, factors like demography, healthcare, politics, international relations, environment as well technological disruption. The idea of this article is not to give the reader a framework to assess the future but rather to develop the thought process.

Photo by Mark Fletcher-Brown on Unsplash

Here in this article, we will talk about how to take into account the Demography and Health Care System to decide on the future while developing strategy

Demography Projection

The population in the world is changing. But if you look carefully the rate is not the same everywhere. For example in Europe, the population is projected to be the same from 1950–to 2050 whereas in Africa, it is expected to be 700% more. The overall global population is estimated to be 9 billion by 2050.

Photo by Sebastian Meier on Unsplash

Generally, there are 2 catalysts for population increase. Birth rate and Migration. That's why out of all the developed countries, the US has a rising population, thanks to migration while others are falling out due to low birth rates.

One important factor to quantify based on this demography trend is the Support Ratio. The support ratio is simply the number of working taxpayers supporting a retired person. So if you have fewer taxpayers, then tax will be higher in that country, reduction in public services, and people working for longer. So there is the trick of low taxes and easy life in the US.

So leadership must take this into account to decide where to employ people so that they are still subject to low taxes and comfortable life as well as to maintain the retirement age. At the same time, such demography due to the influx of income might be the new consumer.

And some companies have strategized their products accordingly. Economic expansion due to the above-mentioned reason, countries like India, China, and Brazil were sources of cheap labor as well as a profitable market for new products.

There should be some consideration of how the gender ratio in the working class is playing out in that demography.

Health Care System

There has been local and global health risk to business strategy and it is totally unknown of its unfolding. The best example is Covid-19.

Photo by CDC on Unsplash

The main idea is when people feel that there is a large difference between healthcare expectation and their experience, it will cause instability in the business environment.

Because of this instability, a couple of things can happen.

  1. there can be a short supply of labor
  2. Product supply can be disrupted.
  3. health care reform might happen and it will cause the business high taxes. At the same time, if the businesses operate in the western world might need to participate in their workforces healthcare in the developing country.
  4. Due to high health costs, companies might need to provide additional payments to their retiree.

The rest of the factors are discussed in the next leg of this series. Click below to read it

If you like this article please follow me. That will encourage me to write more.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
1 minute publication

MY GOAL IS TO CREATE CONCISE CONTENT AND NOT TO WASTE YOUR TIME LIKE A BUNCH OF CLICK & BAIT CHANNELS.