Building A Solid Business Strategy

A successful business venture begins with a good business strategy. It is a master plan that a company’s management creates and implements to maintain a competitive position, continue operations, satisfy customers, and achieve intended business outcomes. It is a long-term vision of where the company wants to go.

Business strategies typically use a variety of tactics to meet objectives: sharing information, reinforcing support, removing barriers, and allocating resources. Strategy describes how to proceed to achieve intended outcomes and helps the business focus on the most important aspects of its vision.

Levels of Business Strategy

• The corporate level
• The business level
• The functional level

1. Corporate-level strategy

Defines the business areas your organization will operate in. It concerns managing resource deployment across multiple business areas — related and unrelated — and includes combining and managing multiple businesses to achieve corporate synergy.

2. Business-level strategy

Developed for individual strategic business units, focusing on a single product-market segment. It determines the competitive position of a key business unit, drawing on cost leadership, differentiation, and focus.

3. Functional-level strategy

Developed by functional heads and supervisors with their teams. Aligns with business-level strategies and sets short-term functional goals that support the business plan.

Steps to Create a Strong Business Strategy

1. Develop a clear vision

A vision is a projection of the future. It should include ambitions for the kind of organization you want to be, and must define success in concrete terms.

2. Determine your competitive advantage

Identifying how a firm delivers unique value is the heart of strategy — service, pricing, delivery, expertise.

3. Define your objectives

Poor targeting is one of the biggest obstacles to growth. Clear target markets let you build an integrated sales and marketing plan.

4. Concentrate on long-term growth

Growth pays for better technology, better staff and better equipment. Specify growth areas, target percentages and net margin.

5. Make informed decisions

Strategy is a garbage-in, garbage-out exercise. The data is usually recoverable if you know where to look.

6. Think long term

Planning horizons are shorter than they used to be, but thinking only in quarters is a trap. Treat strategy as a continuous process.

7. Be inclusive

Involve more people in strategy than you might have in the past. Inclusiveness and transparency drive growth.

8. Measure outcomes and execute flawlessly

Continuously check the effectiveness of your strategies and tweak them when needed. Rigidity is a no-no.

Conclusion

Strategic planning is essential to building a successful venture. Discipline in following the strategies is a must; senior executives must proactively promote processes that keep the team focused.