A start up organisation or a well-established multinational may face a situation when the founder is no longer able to be a one-person army. It’s at this point that the need of devising a strategy for the business becomes imperative.
What is a business strategy?
A clear business strategy sets the direction for achieving the organisation’s long term and short-term goals. It also guides the management as to how the organisation’s position can be strengthened in a competitive environment. Armed with a well-defined and data-driven business strategy, organisations can achieve considerable success and should be able to expand their innovative products or services, customer base, and bottom line.
Without a strategy in place, management can end up making conflicting decisions and could also fail to address burning issues. As a result, cash flow challenges, restricted growth, poor shareholder and staff confidence, and credibility damage can all have a detrimental, and don’t forget – long term – impact to future business plans. Or, the business as a whole.
Alternatively, the result of a strong and clear strategy in the long run is that the organisation sees healthy profits and stays ahead of the competition. Developing a roadmap for the future with a clear set of criteria, a strong strategy empowers organisations to:
- Help all stakeholders work towards one direction
- Achieve strategic business goals
- Make the right decisions while always keeping the mission, vision, culture, values and objectives of the organisation in mind
- Mitigate risks which can hinder the organisation’s success and long term growth plans
- Maintain a competitive advantage
- Strategically position themselves to be attractive to talent
Set clear work priorities - Create a shared sense of the organisation’s mission with employees and management
Creating a powerful strategy
A sustainable organisational strategy can be divided into three distinct segments:
Corporate Level Strategy – this kind of strategy affects all the strategies and decisions in every part of your organisation. For instance, if your organisation has reached its market saturation and needs to diversify, a corporate level strategy would include how to pivot or spread to less saturated markets.
Business Level Strategy – is the strategic planning and implementation that steers the direction for an individual business unit. These strategies will generally include how to gain a competitive advantage and retain customer value in the specific market that the business unit operates in.
Functional Strategy – simply means innovation and the development of new products or services as well as the improvement of existing products or services. Examples of functional strategies are product development, diversification, and market penetration.
It’s critical that your strategy must be horizontally aligned with the business to ensure harmonisation with the corporate, business and functional strategies – they must be all complement one another and not be at conflict.
In our next blog, we’ll go deeper into how to specifically create a business strategy. Read more:
