You may wonder why business strategy is important for business change. Yet how else can you decide what changes to make and how much to invest?
Leading a growing business can feel more like spinning plates. You focus on one area only to find another going wrong. You know the business needs to change, but it’s a case of too much information. It feels exhausting just thinking about it and you need a better way to solve the problem.
A business strategy is the plan for success. Therefore, it makes decisions to organise and use what a business has, to achieve a major win. Of course, a plan is worthless unless it turns into action. As you’ve guessed, it’s activities in the business that turn the plan into a successful outcome. If the activities and the plan are in step, there’s a far better chance of success. The strategy is key in the optimum design of the business. It helps leaders to invest in those few activities that will really help them win against the competition.
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What is a Business Strategy?
A business strategy is a coordinated plan to create or use strengths to create success. In other words, its purpose is to gain from an opportunity. However, it’s not created in isolation but shaped by what else is going on in the market. Therefore, a good strategy accounts for the strengths and weaknesses of the business as well as others in the market.
In practice the business strategy looks like a series of decisions. What business are we in? Will the business compete on cost, offer something uniquely valuable, or focus on a niche? Is it a physical business, online or both? Are sales direct or through a channel? What kind of relationship will it have with its customers? All these translate to the activities of the business.
How important is Business Strategy?
A good business strategy is the best chance of success. The plan must calculate the best decisions to avoid defeat and use strengths to increase the chance of winning.
But as we all know, unless you act, a plan is useless. All the action is in the activities of the business. So, the strategy is important because it directs action and says, “we’ll do this and not that”. That helps leaders design their system and separate what’s needed and what’s not. In other words, what’s vital and what’s draining the business.
However, it’s not enough to merely act. The business must win against its chosen competition. That means selecting a handful of activities that create more value for customers than others in the market. So, the strategy helps leaders invest in those activities that will create unique value.
We know that there’s no such thing as a perfect business or one that doesn’t struggle from time to time. Leaders that understand how the strategy plays out in their business have an advantage. They can see clearly what to change and where to invest to win.
Who benefits from Business Strategy?
A good business strategy is a win-win. It meets an unmet need that’s valued by your customers. Yet pleasing your customers is only one side of the coin. The increased revenue is also rewarding for owners and investors. Also, having a clear path to success helps employees to succeed. In a business that’s going places, they also enjoy more growth opportunities.
KR5 Consulting helps you to assess your current business design and create plans to build a stronger business. With someone from outside the business, you gain an objective view and clarity. Fresh input helps unlock the potential in your business and helps you make better plans for the future.