BUSINESS STRATEGY

 Business strategy

The strategy defines the
long term goals of the
business. Strategic
management provides
overall direction to the
enterprise. It is the
identification of the
purpose of the organization and the plans and
tactics required to achieve the defined
strategy.
According to Wikipedia, Strategic management
defines the major initiatives taken by a
company’s top management on behalf of
owners, involving resources and performance in
internal and external environments. It includes
specifying the mission, vision and objectives
and developing policies and plans designed to
achieve these objectives, and allocating
resources to implement the policies and plans,
projects and programs.
Strategic management is an ongoing process
that evaluates and controls the business in
which the company is involved.
It used to be the case that businesses had a
one year plan, including a budget, a five year
plan and a ten year plan .These defined the
medium and long term goals of the company
and were the strategic plan.
In today’s fast developing world, a five and ten
year plan may be unrealistic – who knows
what changes technological developments will
have wreaked in five or ten years? So this
timescale is often “telescoped “into a shorter,
more appropriate, time frame to enable the
strategy to be reviewed frequently.
Strategy should be reassessed regularly,
perhaps annually or quarterly, to review how it
has been implemented, whether it is successful
or needs to be replaced by an updated strategy
to meet changed economic factors, new
technology, new competitors, or a new social,
financial, or political environment.
Without a clear strategic vision it is extremely
difficult to effectively manage, change or
develop a business. Any decisions made by the
management team will be entirely arbitrary
without a clear Strategy, with no way to align
decisions with the strategy. Decisions may be
made that take the company in the wrong
direction in the short term.
Well run businesses establish and review
Strategy on a regular basis to ensure it fits
with all external and internal factors.
Employee motivation is linked to the ability of
the management team to create a Strategy
and communicate it throughout the
organization frequently.
Management should ensure that the current
Strategy or strategic direction is embodied into
the culture of their businesses and clearly
understood by their employees, who are then
engaged in the business and more
understanding and supportive of the tactical
decisions or steps taken by the management
team to deliver the Strategy.
Many industrial relations disputes result from a
lack of openness by the management team
and lack of understanding of the motives of
the managers. Communication of the Strategy
and tactical plans to deliver the Strategy are
critical. It is important to simplify the Strategy
so that it can be clearly communicated and
understood at all levels, from the boardroom to
the most junior staff.
In reality Strategy is most often reviewed when
a business is undergoing a change in the
circumstances around it, such as a merger or
acquisition or investing in new plant or
machinery.
If your company is starting out, developing
your business strategy will be part of the
business planning exercise, and there will be
uncertainty about the future prospects of the
business.
Be realistic about sales targets and forecasts,
and build in contingencies where cash-flow is
concerned.
Success in business has much to do with
having a vision, strong focus, and having some
idea of the direction you need to take to
realize the goals and vision.
Many companies compose short concise
mission statements that claim to be their
“vision, mission and values”. Sometimes these
are so clichéd that they are ineffective, and so
ambiguous that it is impossible to measure if
the business is achieving their goals.
Having a strong vision is one thing, but to
achieve growth and success, you need a team
who share your passion and your dream.
Successful leaders are the ones who can
communicate their vision and mission to their
followers, colleagues who will then support
them to achieve the goals.
Turning a dream into reality needs a strategy,
and a plan to drive the business forward. It will
incorporate the approach you are going to take
for every aspect of your business and define
which products and services you are going to
offer and how you are going to deliver them.
Most businesses will need a Business Strategy,
and, if your company is large enough, this will
flow into individual strategies for each of the
business functions. The most common of
these is a Marketing Strategy.
This will consider corporate identity and
branding, products and markets, customer
profile, pricing policy, online presence and
marketing strategy, social media strategy, marketing campaigns
The business strategy needs to address the
key issues of the business;-
Are we positioned to benefit from new technologies?
When a company is established there is usually
a clear vision of its objectives, but as time
goes by this evolves. The company may still
have the same ambitions, but the vision may
have changed as it evolves and grows and
technology changes around the business. The
plan should consider both the present and the
future – what would success look like this time
next year?
This is probably the most important role of the
executive today. To stand still, even for an
instant, is to be left behind as all around you
move forward at speed to exploit new and
developing technologies.
Corporate Social Responsibility
A business needs to be profitable to invest in
growth and innovation, but companies should
have a corporate social responsibility theme in
their strategy. What does the business really
care about? What principles are important to
its owners and management?
What can we contribute to the
world?
Presumably customers want our products or
services. Market research needs to be
undertaken regularly to check what consumers
really value, how much are they prepared to
pay for it, and what they would prefer to
experience. Can the company do it better,
greener, cleaner, more ethically?
Are we compromising?
Does the company’s vision clash with
achieving other goals, such as achieving profit,
or ensuring employment .Perhaps short term
sacrifices need to be made to achieve the
long-term vision.
Are we all in this together?
Is everyone on your team on board with the
same belief in the vision? Are they committed,
do they understand what they have to
contribute? It’s important to listen to everyone
to ensure the business stays on track to
achieve its goals.