Why is it that for any holiday or even the smallest getaway, we plan our trip in advance? From deciding which hotspots to visit shortlisting hotels and stays, planning makes it easier to organize trips and ensure that we make the most of them.
Similarly, in the world of work, planning and organizing reduce complexities and help individuals achieve goals efficiently. A business strategy model is one such tool that’s instrumental in helping a business achieve its goals. What is it? Read on.
What Is A Business Strategy?
Organizations need to achieve their targets to remain relevant in the market and tap into growth opportunities. A comprehensive business strategy helps in making major decisions by encouraging an organization to work on its strengths. In short, a business strategy is a combination of decisions or courses of action that assist the management to achieve business goals and secure a competitive position in the market.
A successful business strategy model becomes the roadmap that leads an organization to growth and profitability. It has several essential components, namely:
An organization’s objective or mission addresses the problem in the market that it is trying to solve. A business strategy should always connect to the mission and provide an action plan to resolve the problem(s) identified.
Business strategies should communicate clear instructions on what individuals within an organization should or shouldn’t do. In other words, highlighting the core values is essential in holding employees accountable to organizational standards.
A SWOT analysis is integral to a business strategy as it helps analyze the strengths, weaknesses, opportunities and threats. It provides a snapshot of an organization’s current position in the market. Identifying these four areas can help organizations weed our weaknesses and focus on their strengths.
While these components are necessary for maximizing returns, businesses should find ways to track and measure progress.
The Different Levels Of Business Strategy
There is a common misconception that only upper management has a role in determining an organization’s business strategy. However, leaders across all different managerial levels and functions can benefit from planning and strategizing. Here are the three levels of business strategy that inform decisions and opportunities in an organization:
Such strategies include integrated, action-oriented and comprehensive plans formulated by an organization’s top management. They have a significant impact on long-term performance as they’re central to growth, acquisition, investments and diversification. Examples include the mission and vision statements.
Such strategies are developed by the general managers and are incorporated into an organization’s mission. As there is a focus on business operations, the vision and mission are converted into well-informed strategies at this stage. In a way, it provides a blueprint for the entire business, informing how an organization should compete in the market.
Such strategies are developed by first-line managers or supervisors. They involve decision-making at functional or operational levels. These strategies concern functional departments or areas such as marketing, research and development and human resources.
The various levels of business strategy indicate that an organization has different needs and expectations at various managerial levels and proper planning can improve efficiency.
Build An Effective Business Strategy
A good strategy helps in good decision-making, which leads to successful investments and positive returns. Here are some things you can consider when developing your own business strategy:
Your plan should be clear and realistic with a long-term impact; you need to develop a vision that is a snapshot of the future
Analyze the opportunities available; do your research and gauge the risks and challenges involved before you make any major decisions
Lay down clear targets; it will help you utilize your resources and align different functions to achieve goals and improve productivity
Make sure that your strategy is competitive; identify how you want to deliver unique value to your customers
Factor in risks and have plans to mitigate those challenges; allow yourself and the business to accept failures and learn from them to improve in future
Most importantly, what is a business strategy without measuring results and tracking progress? It’s also useful to get everyone involved and prioritize the same objectives to promote common ownership and have productive meetings to discuss, debate and make decisions.
If you want to improve your strategic planning and execution skills, try Harappa’s Executing Solutions course. You will learn to manage expectations, navigate roadblocks and respond to crises calmly with the help of frameworks that focus on minding cost, quality, and timing. The Bifocal Approach framework, in particular, will help you monitor projects by balancing short-term focus with a long-term view. Get ready to impress your bosses, peers and team, with Harappa!
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