A business strategy is nothing but the set of ideas, processes and thoughts that are needed in order to move towards a specific target achieved within a company. A business strategy helps business owners to understand the customers and customer base of the business. It consists of all strategies adopted by the organization for achieving business objectives. In short, a business strategy is nothing but the road map to reach your business targets. Without it there would be no business or no life.
The most important feature of any business strategy is its purpose. The objective of the organization determines the goals to be attained. If the objective is to achieve market leadership then business strategies have to focus on market leadership and not product leadership. The same holds true if the company’s goal is to achieve a certain level of productivity.
Each business strategy has two aspects to it: the strategies themselves and their implementation. The strategy should be developed keeping in mind the company’s strengths and their weaknesses. The strengths of the company come from its history, tradition, vision, values, talent, technology, competition and many other such features. On the other hand, the weaknesses lie in its current situation, technology, competition, market share, management style, financial position, etc. All these factors have to be taken into account while coming up with a strategy for the company.
By understanding the strengths and weaknesses of the business strategy, the top management can chalk out a workable plan to achieve the company’s goals and objectives. Once the strategy has been put together, the next step is to implement it in all operational levels. To achieve good business strategy one needs to balance both the strengths and weaknesses in the set of strategies.
A good business strategy should address the goals of the organization along with the resources required to move towards the business objective. The strength of the organization comes from its strengths such as technology, talent, market share, market position, and so on. These assets can leverage the weaknesses of the company and help it achieve its goals. For example, if the company manufactures a product, it may have a strong brand, but if it lacks vision, prospects of new customers or profits may not be so high. Both the strengths and weaknesses can also help a company make smart decisions. For instance, it could buy a very cheap product that can bring in plenty of profits but it could lack the vision to convert this cheap purchase into something profitable.
A good business strategy should have well defined strategies along with the identification of the obstacles, strategies to overcome them and the time required to reach the final objectives. A good business strategy should be able to give the managers the right picture of the company’s future course of action. It should allow managers to take decisions confidently based on the strengths and weaknesses of the company.
For effective decision making, the business strategy must be able to forecast the future course of events, taking into account both the strengths and weaknesses. It should also be able to provide a clear picture of the company’s present position and what it plans to do in the future. This helps managers to make the right decisions and take the correct course of action. The business strategy is essentially an abstract map on how to get from where we are now to where we want to be. It helps managers focus on the goal, identify the obstacles, evaluate the situation, form an opinion and finally take the required action. This is what a corporate level strategy represents.
There are many factors that affect a strategic direction for a business. These include the nature of the business, the resources available to managers, the current and future objectives, competitors, and so on. While a good business strategy is crucial for achieving the business objectives, these strategies cannot work unless they are implemented and regularly reviewed.