A business strategy, in simple terms, is a documented plan on how an organisation is setting out to achieve their goals. A business strategy contains a number of key principles that outlines how a company will go about attaining these goals. For example it will explain, how to deal with your competitors, look at the needs and expectations of customers, and will examine the long term growth and sustainability of their organisation.
The reason why having a strategy is so important is because it gives business time to get a sense of how they are preforming, what their capabilities are, and if these capabilities are able to help them grow.
Not all businesses get it right straight away. There are natural weakness within all organisations for various reasons. What a business strategy does is try to remedy these weaknesses so that companies don’t trip up and suffer their impact too greatly. Strategies look at these future risks and help develop ways in which they can overcome these obstacles.
Here are some reasons why having a strategy is important:
- A well defined business strategy will offer a guide on how your business is performing internally. Also, how you are performing against your competition and what you need to stay relevant into the future.
- A strategy can identify trends and opportunities in the future. It can examine the broader changes in market such as political, social or technological changes, as well as consumer changes, and can develop tactics so your business can modify and develop to suit these future changes.
- A business strategy creates a vision and direction for the whole organisation. It is important that all people within a company have clear goals and are following the direction, or mission of the organisation. A strategy can provide this vision and prevent individuals from losing sight of their company’s aims.
Finally, by creating a business strategy a company can create a competitive advantage and ultimately understand more about themselves and where they are going.