A business strategy can be defined as the combination of all the decisions taken and actions performed by the business to accomplish the business goals and to secure a competitive position in the market. It is the backbone of the business as it is the roadmap which leads to the desired goals.
Strategy is about how a company picks which activities it engages in. It is also about how and where management decides to engage in those activities. Success is when that strategy generates a sustainable, above industry average profit.
In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization operates.
Strategic management provides overall direction to an enterprise and involves specifying the organization's objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision-making in the context of complex environments and competitive dynamics. Strategic management is not static in nature; the models often include a feedback loop to monitor execution and to inform the next round of planning.
Choosing a Strategy
The first step in selecting a strategy for your company is to conduct a SWOT analysis of the business. This analysis will identify the strengths and weaknesses of the company in addition to highlighting market opportunities and threats.
To thoroughly understand the market, Porter developed a model known as the Five Forces Analysis. This analysis looks at the competitive position of the business and the factors that will adversely affect its profitability. Those factors are the
Power of suppliers.
Power of customers.
Availability of similar products.
Threat of new competitors.
The SWOT and Five Forces analyses will help to identify which one of these generic business strategies will work best for your company.
What will we do?
- Gather the facts; SWOT Analysis
- SOAR Analysis Focusing on the Positives and Opening up Opportunities
- Using the TOWS Matrix Developing Strategic Options From an External-Internal Analysis
- Porter's Five Forces Understanding Competitive Forces to Maximize Profitability
- PEST Analysis Identifying "Big Picture" Opportunities and Threats
- Critical Success Factors Identifying the Things That Really Matter for Success
- Baker's 4 Strategies of Influence Using Logic and Emotion to Change People's Thinking
- The Build-Measure-Learn Feedback Loop Creating Real Value by Testing Ideas
- Mission Statements and Vision Statements Unleashing the Power of Purpose
- Practical Business Planning Understanding the Components of Future Success
- Simons' Seven Strategy Questions Improving the Implementation of Your Strategy
- The Pyramid of Purpose Communicating Your Organization's Strategy Concisely
- OGSM Frameworks Making Your Strategy a Reality
- The Balanced Scorecard Motivating Employees to Deliver Your Strategy
- Corporate Governance Keeping Organizations Accountable