Business strategy is vital for any company seeking to grow its business in a strategic manner, but what exactly is a business strategy?
A business strategy, in simple terms, is a set of actions, initiatives and policies which set out how an organisation intends to achieve its goals. But while simple to understand in theory, developing a good business strategy – and then actually implementing it – is no easy task.
The highly volatile business environment – with the need to be agile, adaptable and flexible – makes the task at hand even more difficult.
So, how do you plan a business strategy…?
To best determine the future direction of your business, it helps to understand where you are positioned in the market.
Strengths Weaknesses Opportunities and Threats and in particular the main causes therein – are key learnings all businesses can use to evolve. A critical assessment of the current and historical performance of your business and factors impacting it may assist with gaining a better understanding and help shape direction.
Business is not the same today as it was yesterday – or what it will be tomorrow. A business strategy must be flexible, adaptable, and anchored in up-to-date research.
Devising good a business strategy involves a number of core steps:
Do your research: Look at each area of the business and determine what worked well, what could have been better and what opportunities lie ahead. You should look internally at your strengths and weaknesses, SWOT analysis will be able to help you with this process.
For understanding what external factors (opportunities and threats) are affecting your business, PESTLE analysis can be used.
Vision: Having a clear organisational vision is a key starting point. Where are we going and why? The vision statement should describe the future direction of the business and its aims in the short to long term. It is about describing the organisation’s goals, purpose and values.
Competitive advantage: At the essence of strategy is identifying how a company can deliver unique value to its customers. In many sectors of the economy, companies are stuck in a sea of sameness. A well-thought-out business strategy should consider how a company can create space from competition in its service offering, pricing model, delivery system and more.
Define strategic objectives: At this point, the aim is to develop a set of high-level objectives for all areas of the business. Defining niches and specialties allows organisation to focus resources.
Also revisit your research and incorporate the internal and external factors affecting your business in the objectives. Your objectives must be SMART (Specific, Measurable, Achievable, Realistic and Time-related).
Set up an Action Plan: Tactics set specific actions/action plans that lead to implementing your goals and objectives. Start by translating the strategic objectives into more detailed short-term plans. These plans will contain actions for departments and functions in your organisation. You may even want to include suppliers.
Measure your results: All the planning and hard work may have been done, but it’s vital to continually review all objectives and action plans to make sure you’re still on track to achieve that overall goal.
Developing your business strategy skills: Understanding what is required to develop and then implement a good business strategy is one thing – how can you improve your skills to actually do it?
Try our Developing Your Strategy – Module Taster to get an insight into our learning resources and how they can help improve your business strategy.