A business strategy should be viewed as a declaration of your organization’s intent to succeed in the marketplace.
A business strategy should be viewed as a declaration of your organization’s intent to succeed in the marketplace. It is, by definition, both expansive and limiting, covering all areas of your operation because the best strategies are broad enough to allow you room to manoeuvre while still giving you direction.
Everything starts with your business strategy. You will eventually decide how to position your product and what the key benefits are, and this all stems from your goals. What is your company trying to do? What is it trying to be?
If you want to win, you have to have a strategy.
Strategy is one of those business topics that people think they understand until you start asking questions.
Business strategy is critical to your success. A business strategy is an organisation’s documented course of action or process for achieving its objectives in its chosen market and competitive environment. Business strategy involves activities such as strategic planning, market analysis, competitor analysis, financial analysis, resource allocation decisions, and other management decisions.
A business strategy describes the way a business creates value for its customers and for itself. It’s a statement of what business the company is in, how it competes, and why it can do so profitably. A good strategy makes it possible to work backwards from customer value to competitive advantage, and then back again.
There have been so many misconceptions about strategy. That word has been thrown around a lot. Most times people use it to mean planning. It is a lot more than that.
A winning business strategy shows itself in how the company behaves, and how it ultimately performs. Some companies get very big despite having a terrible business strategy. If they get big enough they can sometimes correct things at that point.
If you want to win a chess game, you have to know your strategy. You must know how you want to play the game before you even sit down. Chess is one of the hardest games in the world, but this is still true. You don’t need to be smarter than your opponent. You just need to be better at playing chess than your opponent is.
What is Strategy?
Strategy has been studied for years by business leaders and by business theorists. Yet, there is no definitive answer about what strategy really is. One reason for this is that people think about strategy in different ways.
For instance, some people believe that you must analyze the present carefully, anticipate changes in your market or industry, and, from this, plan how you’ll succeed in the future. Meanwhile, others think that the future is just too difficult to predict, and they prefer to evolve their strategies organically.
Business strategy is about building a business that can make decisions.
Strategy is an act of conscious choice. Strategy can identify a need, and even anticipate failure. A strategy can be used to make choices that increase a business’s chance of success. A good strategy may entail making choices that are unpopular with some people, and some of those people may work for you.
Business strategy is a term used by business people to refer to:
- The plans, choices and decisions to guide a business to profitability and success. A good strategy can serve as an impetus for business success and a weak strategy can lead to a company going out of business.
- A document that lays out the strategic thinking behind managing a company or organization.
It is also a guide to what and how decisions are made (made by leaders and managers of a business or organization) when the business makes its plans, sifts through potential opportunities, evaluates its strengths and weaknesses, chooses its priorities, makes its investments, and takes other actions needed to reach its goals.
Strategy is an intrinsic part of every organization. By definition, it’s the study of the broader environment you are in, the paths available to you for success and how to choose among them. Some strategies are explicit and others are implicit. Some strategies are deliberate and others arise through happenstance. And some strategies are so obvious as to be invisible.
It is absolutely imperative that everyone who will be working on the strategy understands exactly what it is, and why. If you cannot explain it to them, then you need to go back to the drawing board.
The business world runs on strategy — plans about where to go, what to do and who is responsible for each part of the journey. But not enough businesses have well-designed strategies. They need an approach that ensures strategy will work wherever it’s used.
Strategy and execution are generally thought of as two separate things. Strategy is what you do, Execution is how well you do it. However, the best way to think about strategy and implementation is as a single continuous process.
Businesses that are successful in creating shareholder value have a low-cost structure with little waste. They are good at executing their strategy, that is running their business and they execute this continuously day in, day out.
Strategy shows where you should concentrate your resources.
By formulating and implementing strategy, you will gain a better understanding of your customers and competitors.
In order to grow a business, you need to have a strategy that outlines what you’re trying to do and how to do it. If you don’t have a strategy, you’re likely to be left behind by your competitors who do.
I’ve seen the effects of not having a strategy more times than I can count. Things like not enough sales, not knowing who your target market is, or even have no idea what makes your business stand out among every other business doing the same thing.
What is your strategy for success?
Strategy can be dangerous when it’s about yourself. You can follow it and worship it, but if you lose focus, the ultimate result will still fall short of what you wanted. A strategy does not dictate the how. It provides a “why” and an end vision worth working towards.
If you’re truly looking to create something epic, I think it’s important to understand what people value and also what is already out there. And then figure out how you can incorporate those two things and make them better by adding a twist or two. Keep in mind: You have to understand both the problem you’re solving and also the larger landscape.
A strategy implies an intention to achieve a result by doing something differently or better than is currently being done. Strategy is about choice, about making decisions and prioritising effort with the aim of overcoming the core problems or hurdles that stand in the way of achieving a desired future state. A clear understanding of the core business processes and how they interrelate is essential to establishing a successful strategy.
Strategy — all that matters, everything else is a detail.
Strategy, the ability to visualize the future and attempt to influence it, makes our companies move forward. It makes employees feel appreciated and it gives them the opportunity to shine with their contribution to the company’s mission.
The consumer is at the centre of an organization’s strategy. It is not enough to focus on why customers buy (to solve a problem or because they’re loyal or for some other reason). That does not make them feel anything when they’re using your product. They want something they can feel good about. All their efforts are for nothing if you haven’t given them a reason to feel that way.
Strategy is not a set of rules for winning.
It’s a way of looking at the world. A way of asking questions, of seeing new opportunities and risks. A good strategy will not guarantee success, but it will give you the best chance you can have to build a successful business.
The secret of strategy is not to choose a target — any target will do — but to create a scenario. The scenario I envisage begins with the customer thinking: What’s this company up to? Then he hears about us. Our reputation precedes us. People have talked about us, so he knows if we’re any good or not, whether we can be trusted, whether better deals are available elsewhere, what sort of service we provide, what colleagues think of us.
What does success look like for your business and your customers? Understanding this is important for strategy and its implementation. It is not a new question. Books about strategic business planning in the ’70s mainly focused on how to do it — the alternatives, the pros and cons, etc. Today there is a greater emphasis on effective execution
Mastery of strategy hinges on three basic ideas: there are no secrets in competitive strategy, effectiveness breeds success, and the essence of strategy is choosing what not to do.
Michael Porter, the world’s preeminent business strategist, identified three underlying principles of strategy.
- Creating a “unique and valuable (market) position”,
- Making trade-offs by choosing “what not to do”,
- and creating “fit” by aligning company activities with one another to support the chosen strategy.
As you think of your business, envision it as an inverted pyramid:
The widest part of your company and its greatest resource is your customers. The first step in getting to where you want to be is figuring out how they will benefit from the value you offer them — and what value that will be.