What is Business Strategy and Why Is It Important?
– Moshe Abitbul
Your business strategy is the summation of how your business is going to accomplish your goals, satisfy the expectations of customers, and maintain a competitive edge in the market. By defining your business strategy in clear terms, you will have a guideline and framework for developing a business plan or a growth plan, and meeting your business goals.
A business strategy defines what the business needs to do in order to reach the goals and objectives of the business, which can help to drive decision-making processes around hiring and asset allocation. A business strategy is a blueprint for actions and decisions that a company plans to make in order to achieve its business goals and objectives. A business strategy is thus concerned with how individuals across an organization are expected to make decisions and allocate resources in order to achieve the core objectives. A business strategy is a collection of all decisions made and actions taken by the company in order to achieve the goals of the business and secure the market competitive position.
A business strategy is the collection of competitive moves and actions a company uses to gain customers, successfully compete, improve productivity, and meet organizational goals. A business strategy describes the course of action for meeting an organizations stated vision and goals, and guides decision-making in order to enhance a firm’s financial stability in a competitive marketplace. At this level, vision and objectives are translated into specific strategies, which guide the way a company will compete in a market. Once defined, your company’s strategy sets priorities for the business and the leadership team, and helps you to attract and retain the talent workers that you need.
It is important that you make sure that your strategy is in line with the goals of your business, the types of activities that your organization does and is known for, and the environments that you expect to thrive in. Strategy includes your company’s goals and objectives, the types of products/services that you plan on building, the customers that you wish to sell to, and the markets you will serve in order to generate profits. While the business plan sets out goals and objectives, the strategy gives you the means for accomplishing these goals. It guarantees success for the overall business strategy, because it takes a unit-by-unit view and needs, and ties it into a higher-level goal.
Where the business plan differs is that it is a review of the way a company is operating on a day-to-day basis, while the strategy plan is focused on how to execute on the specific initiatives that hold the power to transform the company. Both business plan templates and strategic plans will both include an executive summary, company description, and also a mission, vision, and values statement.
The goal in this phase is to create a high-level set of objectives for all areas of a company. One obvious consequence is that you cannot create strategy for your business without thinking about the mission and goals first. If you are looking to prioritize those two elements, then often the easiest thing to do is develop a strategy first, and then map out goals to help achieve that strategy.
Whether you are trying to establish a new company priorities, set out plans to grow, define your product roadmap, or plan for your investment decisions, you are going to need a strategy. The strategy should be one that you can execute on, based on your budget, staff, timeframe, and expertise. A strategy needs to lay out a business vision, identify its goals, and how it will grow and compete in the long run. That is why strategy is basically about answering how the business is going to compete in the market, to increase revenue, and at the same time, to improve its financial situation.
Strategies anchor your company’s foundation with principles that can apply in nearly any scenario, and, in turn, help your company meet its short-term goals as well as long-term goals. Strategy is focused on principles, which helps you to think, rather than tactics, which helps you to execute, and thus allows you to focus on why your company does specific activities, rather than how you do them or what you are doing. Essentially, a strategy captures any company’s strengths and weaknesses, and answers how a business plans to deal with threats and opportunities in the markets it operates in.
A business strategy is nothing more than the overall plan implemented by a business leadership in order to achieve competitive market position, conduct operations, satisfy customers, and reach a desired end to the business. Strategy is the long-term plan you make for your company in order to reach a desired, desired, future state you have imagined. A good strategy provides a clear road map, made up of a series of guidelines, or rules, which determines actions that the people of your business must take (and do not take) and things they must prioritize (and do not prioritize) in order to reach your desired goals. A cohesive business strategy helps you to understand a business performance, what drives that performance, how to improve that performance, as well as to hedge a business against future risks.
A business strategy also includes a method for monitoring a company’s performance, assessing how it is performing relative to goals that were established before launching the strategy. While an objective is defined explicitly in a business plan, a strategy answers all of the “what’s,” “why’s,” “who’s,” “where’s,” “when’s,” and “how’s” to achieve this goal. A vision, or vision statement, must incorporate the aspirations for what kind of business you want to become, and, unlike the mission statement, it lays out in definite terms what success looks like (customers, markets, volumes, etc.). Corporate-wide strategies are used to define lines of business, expansions and increases, acquisitions and mergers, diversification, integration, new areas of investment and divestment, etc.
About Author
Moshe Abitbul
Founder & CEO – Mosheko & Gotatti
Helped 1000+ People to Start There Entrepreneurship Journey
Product Development Specialist | Import/Export Expert
LinkedIn : Moshe Abitbul