Friday 10 February 2023

Buisness Strategy

Business strategy refers to the objectives, plan and execution an organization takes to achieve its desired objectives. It encompasses a broad range of decisions and actions taken by a company to compete in the market, grow, and succeed over the long-term. Effective business strategies take into account a company's strengths and weaknesses, as well as the opportunities and threats presented by the external environment. They provide a roadmap for allocating resources, making investments, and positioning a business for future success. The development and implementation of a well-crafted business strategy is crucial for any organization seeking to achieve sustainable growth and prosperity. 

A strategy map, can be broadly broken down into three broad parts:

  1. Strategic objectives: An organizations values and purpose, its scope of operations from a product and service perspective. The strategic objective(s) of an organization is the north star that all departmental or business units need to follow. 

  2. Strategic plan: The position an organization takes within the market leveraging its internal resources and capabilities to achieve its strategic mission. The action plan to accomplish its mission.

  3. Strategic action: The execution of the Strategic plan to accomplish the strategic mission. The actions to execute the plan to achieve that mission.
Before an organization can establish their strategic objectives, they must first understand its current strategic positioning. Understanding the current situation is the first step in any GAP analysis; before an organization can define a strategic plan for future strategic objectives, it must understand it's current state of affairs. A strategic analysis is conducted from a cross-functional perspective, it is a probing of different business units and departments of the company to gain a holistic understanding for companies strategic direction.

Organizations do not operate in a vacuum, they are members of local as well as global markets, they have rivalries, partners as well as potential rivals and potential partners along with market threats and opportunities. To derive a realistic and value added strategic map all of these complexities must be taken into account. These various factors need to be substantiated by real analytics and data to make informed decisions mitigate the strategic risk.

The three fundamental questions one needs to ask before creating a Business strategy:
  1. What are their values?
    • These values can be found within an organizations mission statement.
    • What is the organizations Scope?
    • What is the mission of the Organization?
    • How are they going to accomplish their values?
    • How does the organization define itself?

  2. What are their Opportunities?
    • What is the external environment which the organization operates in
    • What does the market dictate, what is the marked demand, does it align with the organizations offerings
    • Who are the competitors, how are they  fulfilling the markets needs, what impact do they have on the organizations opportunities.

  3. What are their Capabilities?
    • What does the organization do well?
    • What assets does the organization have which they can leverage to meet market opportunities?
    • What is the organizations competitive advantage? what can the organization do better than their competitions.
The intersection of these three answers, provides the organization with it's valuable competitive advantage.