Tuesday, June 18, 2024

What is a business strategy?

Creating a strategy is one of the most integral functions of operating any business, yet many people often confuse strategy for a plan. Knowing the difference between a strategy and a plan will greatly change how decision makers approach the curation of one, whilst also doing a better job at it.

Writing a strategy

Strategies don’t need to be inventive.

In fact, they are typically generic and known to many. The creativity comes in the form of planning and execution of the tactical plan. Whereas the strategy comes knowing the goals of the business unit and writing the direction that will be taken to achieve that.

In other words, the strategy should answer the approach involved in achieving the objective in a couple of sentences. Any longer and it becomes a description of the strategy.

It must be short, concise and detailed enough that it doesn’t require much more explanation. Some of the greatest strategies in any field from business to military are no more than one sentence or a few words. ‘Product differentiation and innovation’ from Apple and ‘divide and conquer’ by military greats like Napoleon Bonaparte. 

Management and leaders shouldn’t have to go into detail to explain what the strategy is.

To write strategy it’s important to understand where it fits within the whole plan. Starting with the goal and completed with the execution of a tactical plan:

Goal – where we are going?

Every business/unit has a goal that needs to be achieved, such as increased profits, revenue, market share, unit acquisitions, product awareness, etc. It’s the targets that we’re aiming for. 

Strategy – how we are getting there?

This is where we consider the competition and external factors like the market and environment. History of the business and its strengths and resources a strategy focuses on the direction to achieve the above goals. For example, to increase the unit acquisitions, it may be best to take on the competition – a ‘head-on strategy’.

Tactic – what are we doing to get there?

Now we gather with our team and create a plan which decides the course of action or activities.

A ‘head on strategy’ could look like an ad campaign which makes a direct comparison to its competition, utilises aggressive sales tactics on the competition’s territory and develops better value propositions on the product/service.

Writing a strategic plan requires involvement from a team that can bring ideas together which can be seamlessly executed.

But the strategy must be carefully thought out and all activity must align with its intentions. Every strategy must have a strong foundation which adheres to a typical SWOT analysis.

What you need to write a strategy

 There’s three key factors which you must have before writing a strategy.

• Thorough comprehensive understanding of the business and its environment
• Data and information on the current situation
• Involvement and collaboration from key stakeholders
 
By collating all of the information above, you should clearly be able to identify the unique strengths and weaknesses of your business’s product and resources. It should also highlight any opportunities that can be identified from the marketing situation and provide a clear understanding of the product/service, business model and how it makes revenue.
 

If you’re unable to confidently have this information on hand, then you are not ready to create a strategy yet!

Mistakes to avoid

Avoid the mistake of writing a statement that is not a strategic approach.
Strategy is not:
• KPI or measurement
• Aim
• Mission
• Method or a plan
 
Within every business unit in the organisation, each would have its own strategy to execute. 
For example marketing has its goals and strategy, which contains a tactical plan that will involve advertising channels and mediums. Whereas IT and tech might have a data and information strategy that will involve analytics, collection and processing of data.
 
It’s important to understand that a well thought out strategy doesn’t change, but the tactical plan and activity can. If the plan isn’t working then change the activity to align with the top level approach to get closer to the goal.
 
Team work and planning
 

Whether it’s an in-house team, an agency or contractors, it’s up to the manager/leader to be able to communicate the strategy to the team for a tactical plan. A standard plan of action will include schedules, tools, channels or mediums and resources. Workshop this with your team or request a proposal to come up with a comprehensive plan that is measurable against the overall goals.

Strategies can be written for any level of the corporate business like the business units within spanning different time frames. Long term strategies that develop the business to a particular target, to the short term tactical strategies that are more like strategic campaigns. 
 
So long as you follow the guidelines provided in this article, you’re bound to have the foundation of a strategy.
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Noj Christensen

Noj Christensen

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