Business strategy is a critical component of any successful enterprise. Often confused with a vision statement, business strategy is NOT what you hope your organization will become. Rather, it’s a definition of who you serve and how you do it.
Just like any endeavor, to develop a solid strategy you have to plan. Creating a strategic plan for your company is a must-do before you define your overall strategy. This plan is going to encompass your vision, purpose, core values and other defining characteristics of your organization. Only by engaging in this process can you effectively develop a strategy for your business.
Multiple strategic planning sessions may be required in order for you and your team to accurately distill your vision for the future. Understanding what you want your business to look like 5 or 10 years down the road is critical to developing a strategy to get there. Think of your strategic plan as your guiding document. It tells you where you’re going (vision), why you do what you do (values, purpose) and how you’re going to get there (strategy).
Defining Your Business Strategy
Your strategy should provide the following information about your company:
- Purpose (why you’re in business).
- Strength(s) (what you are good at).
- Products and/or services (what you do)
- Customers (who you serve).
- Value proposition (how you’re different).
This information is the core of your strategy. Without it, you will hamper your ability to create the defining principles that will guide you and your team. It’s important to also remember that strategy is not the same as tactics. Tactics are the specific steps you will take to execute your strategy, not the strategy itself.
Once You Define Your Strategy, Stick To It
While it’s tempting to take on additional business whenever the opportunity presents itself, it’s important to make sure that any new business fits within your defined strategy.
“The essence of strategy is choosing what not to do”. ~ Michael Porter
If your strategy is to manufacture highly durable roller skates for the roller derby industry, you really should think twice before expanding into the bicycle business. Doing anything well requires focus. If you change course to chase dollars, it may very well sabotage your ability to be good at your stated purpose.
Changing Your Strategy
That’s not to say that that expanding your offering is a bad thing. You may find that your current focus is a little too specific. If so, changing your business strategy to include all forms of human-powered, wheeled conveyance may provide more opportunities for growth without compromising the ability of your business to do it better than your competition.
Make sure that you thoroughly consider any potential future opportunities when developing your strategy. Change isn’t necessarily a bad thing but ideally, your business strategy should have already taken this into account.
Your business strategy defines what you do and how you do it. It is how you will guide your organization and your team though the labyrinth of obstacles to success. This is why your strategy is the most critical component of achieving your vision for the future.