There is a lot of hoo-ha around strategy as some try to overcomplicate it.
Simply put, 'strategy' is how you intend to achieve your goals.
As there are usually many ways to achieve your goals, it is essential to clarify which how (strategy) you choose.
This choosing of 'how' facilitates clarity, efficiency and differentiation from others.
Business Strategy
"Business strategy is the creation of a unique and valuable position, involving a different set of activities." (Michael E. Porter)
In business, your strategy is your unique 'how' which differentiates you from your competitors and defines how you intend to achieve your goals.
To have a clear strategy you must decide on what you will do, and what you won't.
This can be difficult for adolescent businesses who have in the past done anything just to survive and grow.
For mature businesses it can be challenging to distill complex strategies down to something meaningful and relevant to their whole staff.
Examples of strategies
To differentiate yourself from your competitors...
- Are you going to be a low cost provider?
- Will you be the recognised experts?
- Do you offer out of this world service?
To attract and retain the best staff will you...
- Pay at the upper quartile of market rates?
- Offer flexibility to achieve work-life balance?
- Be a fun, social place to work?
- Provide the best operating conditions - equipment, processes, training, etc?
To increase your profitability will you...
- Focus on sales growth?
- Instigate efficiency improvements?
- Launch existing products into new markets?
- Multi skill your workforce?
Different scopes of strategy
There are also different scopes of strategy.
Strategies can be quite 'high' level, that is, relate to the general direction of the business, or they can be quite specific, like investing in a new capital equipment. More specific strategies are often referred to as tactics or initiatives.
Irrespective of scope, it essential that all businesses define their strategy clearly so they know where they are going and how they intend to get there.
