Published: 2023-04-25
Views: 417
Author: Marigold
Published in: Management

While a business model is overall plan for action that will help your business achieve its mission, a business strategy is a specific and measurable plan that addresses specific aspects of your business. 

This gives you a competitive advantage and allows you to focus on the strengths and weaknesses of your company.

Strategic Planning

Strategic planning can be a great way to improve communication, market plans, tech adoption, and any other.

People who can quickly assess a situation and create measurable plans of action that address it are essential for businesses. 

A strategy is built on the company's culture. It provides KPIs to help you determine what works and what does not.

A solid business strategy can also help guide decision-making and place a company in a favorable position. Without a strategy, business objectives won't be achieved.

You will need to be able to not only create these strategies but also measure their success to determine if you can repeat them or pivot based on it.

Course in Business Strategy

Business strategy courses will teach you how to model and make smart business decisions to reach long-term business goals. These courses are relevant for business analysts, business developers, and anyone interested in business innovation.

Importance of Business Strategy

Without a strategy, a business goal is nothing more than wishful thinking. If you do not have a strategy, it is a gamble.

There are five reasons why you need a strategy for your business and we shall discuss them in this article.

Reason #1: Planning

A part of a business strategy is the way you will achieve those goals. It's a plan that will get you to where you want to be.

Reason #2: Strengths & Weaknesses

Most of the time, when formulating a strategy, you will discover your true strengths and weaknesses.

It also allows you to capitalize on your strengths and use them to either overshadow or eliminate your weaknesses.

Reason #3: Efficiency & Effectiveness

When every step is planned and every resource allocated and everyone knows what to do, business activities are automatically more efficient and productive.

Reason #4: Competitive Advantage 

Business strategies focus on leveraging the strengths of a business to position it uniquely. This creates a brand identity and distinguishes the business from other businesses.

Reason #5: Control

It also determines the course to follow and interim goals that should be reached. This allows you to monitor the activities and check if they are following your plan.

Business Strategy vs. Business Plan vs. Business Model

Levels to Business Strategies

There are three levels to business strategies.

Level 1: The Corporate Level

The corporate level is the most important and broadest level of the business strategy. The business plan is what defines the goals and expectations of the business. It establishes the corporate vision, mission, and corporate goals for all.

Level 2: Business Unit Level

A business unit is a specific strategy that differs for different business units. One unit may include different products and channels that have completely different operations.

These units create strategies to distinguish themselves from their competitors by using competitive strategies and to align with the overall business goal defined at the corporate level strategy.

Level 3: Functional Level

Different units have different functional strategies. These departments include but are not limited, to finance, marketing, operations, CRM, and sales.

These functional-level strategies only cover the day-to-day actions and decisions required to implement unit and corporate-level strategies, maintain relationships between departments, and fulfill functional goals.

Components of a Business Strategy

The business plan clearly defines the objective, but the strategy answers the what, who, where, and when of achieving that objective. These are the essential components of a business plan.

Mission, Vision, and Business Objectives

A business strategy's main purpose is to achieve the business goal. This gives direction and vision to the business. It also provides clear instructions on what to do, how to do it, and who is responsible.

Core Values

It also identifies the musts and musts of the business, which clears up most of the questions and gives direction to top-level units as well as departments.

SWOT

A SWOT analysis (strengths and weaknesses, opportunities, threats) is a summary of the company's current position. This is an essential component of any business strategy because it shows the company's current strengths and potential opportunities, as well as the weaknesses and threats that the company should be aware of.

Operational Tactics

Functional and unit business strategies go into detail about how work should be done to make it most efficient and effective. It saves time and effort because everyone is aware of what needs to be done.

Resource Procurement and Allocation Plan

This strategy will also answer where and how you will procure the resources required, how they will be allocated, and who will be responsible.

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