Strategy – Definition and Features [Explained Step by Step]

The word “strategy” comes from the Greek word “stratçgos;” stratus (meaning army) and “ago” (meaning lead/move). You must have learned from your mentors or professors to come up with a suitable strategy to achieve your goals in life. This strategy makes all the different life situations stand tall, whether it be personal life goals, professional life goals, or business life goals.
Definition:

Strategy can be interpreted as an action plan intended to achieve one or more goals by paying attention to various factors. According to Lee Bolman “Illusion remains a dream without a plan” and it is 100 percent real. For motivating your dream to reach reality, various forms of strategy come into play. In this article, we will understand what strategy is, how you can make a suitable strategy for successfully channelizing your business, and what are the different concepts that play a key role in making the strategy.

What is Strategy?

Strategy refers to the different actions that the managers and other people in high-level positions are taking to achieve the company’s objectives. It can also be called the general direction and various other components the company uses to accomplish its objectives. Efficient stratification will lead to faster achievement of certain goals and objectives.

In Jim Rohn ‘s words, an American entrepreneur, author, and motivational speaker- “Success is 20 percent competency and 80 percent strategy. — you know how to succeed, but more importantly, what is your strategy for success? “So, if you know how to formulate the right strategies for your business, you ‘re heading towards exponential growth and your success rate is going to jump up tremendously.

strategy

How is Strategy Formulated?

How the development of an effective Plan takes place when formulating a strategy, is mainly about allocating the available resources to the company’s different organizational units in order to achieve the objectives. When the company is formulating a plan, they must bear in mind that it is not done in isolation, but that the various stakeholders such as consumers, creditors, staff, suppliers, etc. are involved. One factor that needs to be held in mind when formulating strategies is how confusion can arise, particularly in others’ behaviors. For example, if a company bases its strategy on the premise that its competitors will be pricing their products higher, and if the latter does not raise prices, it can be a setback for the business. Strategies must give room for error. It is also called ‘the company’s blueprint,’ because it outlines the company’s goals and means to accomplish them, and also determines how it can contribute to society’s development. Strategizing, therefore, is not just about achieving goals but also about contributing to the group and discovering successful ways to do so. Therefore a plan fills the distance between where the business is now and where it needs to be in the immediate future. When designing your plan, changing your plan according to the particular results you get in the process is important to be true and realistic.

Some of the critical steps of strategic formulation in a company are-

Setting Objectives Of The Company

Evaluation of the company’s organizational environment Setting different types of quantitative goals according to different goals Making division plans and performance analysis Finalizing the right strategy according to company goals, strengths, potentials and constraints

Features Of A Successful Strategy

“Strategizing is about long-term achievements and plans rather than day-to-day operations that are essential for the company’s smooth run. Strategies are usually in terms of goals for revenue or production, quality control, improvements, expansion to new markets, etc. It helps in looking ahead to the future. Since it is difficult to reliably predict the future, strategizing helps to minimize risks and other challenges that are an integral part of any business climate. Strategizing also takes into account the activity habits of workers, clients, etc., as it revolves primarily around them. For example, if an organization wants to turn to a more creative method of production, the employees’ actions should be taken into account so that smooth running without any interruption.

Three levels of Strategy:

There are three levels of strategy which can be implemented in a business. Let’s take a look at those here and now-

1) Corporate Strategy This refers to the company ‘s overall strategies, which are further split into different units and functions in many business markets. This strategy deals largely with how the company as a whole complements and adds value to these different functioning units. It also tries to understand how to structure the overall business structure so that the different groups can add value to those individually functioning units. This can be achieved by allocating resources efficiently to these various units, increasing capital economically, creating a strong brand identity, and creating stable internal communication channels. For example, if a corporation has multiple divisions or production units, a corporate strategy must be implemented to ensure that all of these units operate efficiently and contribute to the company’s overall income. Another aspect that needs to be addressed when formulating an organizational plan is organization architecture. What the operation of the company is organized, and how interdepartmental partnerships impact the company’s advantage over its rivals and the achievement of its goals.

2) Business Unit Approach: This strategy includes drawing up strategies to better explain business trends and how to be competitive in these particular markets. Business Unit Strategy’s starting point is to gather competitive intelligence so that market nuances can thrive and earn profits. It is important to consider the company’s core competencies and the USP of the product or service, and how it can meet the needs of the consumer. USP analysis can be used to understand the company’s core competencies, and the product or service can be created accordingly. An analysis must be carried out to understand the market’s threats and opportunities so that the product can then be placed. SWOT analysis is an equally valuable tool. When the company is smaller it may overlap corporate strategy and Business Unit Strategy. Also, if the smaller businesses operate in different markets, then each market needs to be analyzed for optimum income. It will be the most obvious strategy and people need to be able to relate to this strategy and their work at each point. Generally it is achieved by inspiring the workers, leading to higher outputs, and thus better income for the company.

3) Team Strategy: In order to effectively implement the above-mentioned strategies, the teams need to be aware of the company ‘s objectives and motivated to work towards achieving them. Teams are the company’s lowest level of management and must have their plans and work together for the company’s overall success. Because this involves achieving the goals set at the organization’s higher management levels, team strategies must formulate the best practices that will allow the team to function effectively, which will contribute to the organization ‘s goals. There needs to be good coordination between the organization’s different teams to prevent miscommunication that could result in money, time, and energy wasting. Developing appropriate team strategies can help prevent these things, and set the teams achievable goals as well. Thus, these are three different levels of strategies that play a crucial role in channeling the business strategy as a whole.

Now, in the next section, we ‘re going to go through the different components of a company’s business strategy statement.

Components Of A Business Strategy Statement

Different Components of a Business Strategy Statement There are four components of a company’s strategy statement and they are-

1) Strategic Aim It tells about the reason behind the life of a business, and why it will continue.

2) Mission Statement This strategy statement is used to describe why the company is operating, plus it also sets out the roles by which a company should serve its various stakeholders.

3) Vision Statement: This declaration of strategy is used to talk about the company’s goals and hopes for the future. It’ll tell you where in the future the company wants to get to.

4) Goals and Priorities Statement These plan statements are used to define the key items that will be achieved to achieve the company’s goal and vision. Today, having a good understanding of the strategic management process is important for creating an effective business plan.

Let’s look at the critical steps of the strategic management process of a business strategy.

Components Of Strategic Management Of A Business Strategy

To effectively manage your business strategy, you need to go through four elements below-

  • Environmental scanning
  • Strategy formulation
  • Strategy implementation
  • Strategy evaluation.

Conclusion

Strategy formulation is a key component of a successful company, especially if it long-term wants to survive.

An organization’s performance depends not just on the type of product or service it offers but also on the efficient use of its resources that can be achieved by formulating successful strategies.

It must be done in each department, not just at the macro-level (higher management) but also at the micro-level so that the contact flow is proper.

Thus to make a strategy impactful, it is important to understand that; its proper execution is crucial.

“A vision and a strategy do not suffice. Execution is a long-term secret to success. Every single day. Every single day.

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