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A business strategy can be defined as the combination of all the decisions taken and actions performed by the business to accomplish business goals and to secure a competitive position in the market.
It is the backbone of the business as it is the roadmap that leads to the desired goals. Any fault in this roadmap can result in the business getting lost in the crowd of overwhelming competitors.
A business objective without a strategy is just a dream. It is no less than a gamble if you enter the market without a well-planned strategy.
With the increase in the competition, the importance of business strategy is becoming apparent and there’s a huge increase in the types of business strategies used by the businesses. Here are five reasons why a strategy is necessary for your business.
IT’S is a part of a business plan. While the business plan sets the goals and objectives, the strategy gives you a way to fulfill those goals. It is a plan to reach where you intend to.
Most of the time, you get to know about your real strengths and weaknesses while formulating a strategy. Moreover, it also helps you capitalize on what you’re good at and use that to overshadow your weaknesses (or eliminate them).
When every step is planned, every resource is allocated, and everyone knows what is to be done, business activities become more efficient and effective automatically.
Its focuses on capitalizing on the strengths of the business and using it as a competitive advantage to position the brand in a unique way. This gives an identity to a business and makes it unique in the eyes of the customer.
The business goal is achieved by the effective execution of different business strategies. While every employee, partner, and stakeholder of the company focus on fulfilling a single business objective, their activities are defined by various business strategies according to their level in the organization.
They can be classified into three levels –
The corporate level is the highest and most broad level of the business strategy. It is the business plan which sets the guidelines of what is to be achieved and how the business is expected to achieve it. It sets the mission, vision, and corporate objectives for everyone.
The business unit level is a unit-specific strategy which differs for different units of the business. A unit can be different products or channels which have totally different operations. These units form strategies to differentiate themselves from the competitors using competitive strategies and to align their objectives with the overall business objective defined in the corporate level strategy.
The functional level strategies are set by different departments of the units. The departments include but are not limited to marketing, sales, operations, finance, CRM, etc. These functional level strategies are limited to day to day actions and decisions needed to deliver unit level and corporate level strategies, maintaining relationships between different departments, and fulfilling functional goals.
While an objective is defined clearly in the business plan, the strategy answers all the what, why, who, where, when, & how of fulfilling that objective. Here are the key components of a business strategy.
The focus of a business strategy is to fulfill the business objective. It gives the vision and direction to the business with clear instructions of what needs to be done, how it needs to be done, and who all are responsible for it.
Read More Now on our tips, and insights to Business Strategy!