Strategic success: how to develop a business strategy that works

Business strategy is a comprehensive plan of actions that a company plans to use to achieve its goals. With its help it is easier to navigate step by step in the actions of the team, to distribute the load on each employee, to determine the range of relevant tasks, features and resources for their implementation. A classic strategy is developed for a long period of time – on average from 2-3 to 5-6 years, but it can be longer or shorter depending on the economic situation in the market in general and business needs in particular.

Drawing up a business strategy is the goal of:

• owners or managers of the company, who are maximally involved in business tasks;
• special contracting companies – aces in their business, able to see from the outside the “pain points” of the company and close them.

Both approaches are often used in a combined method. For example, independent specialists offer their vision of the issue, and the top management of the company adjusts it to the individual needs of the company. We have compiled a detailed guide to help with independent strategy development for long-term planning.

Why business strategy is important

Business strategy is an important tool for any business, from individual entrepreneurship and young innovative start-ups to large international companies that already have a name and weight in the market. It provides companies with the following benefits:

• Understanding actions for the long term.
  A business strategy is a convenient planning tool that demonstrates what steps and in what sequence should be used to achieve your goals.
• Assessing risks and benefits.
  With the help of business strategy, you can see the strengths and weaknesses of the enterprise, adjust the final plan to level out possible shortcomings and emphasize the advantages of the company.
• Competent allocation of resources.
  Relying on the business strategy, it is easier to correctly distribute tasks to each of the employees and use the full potential of staff, as well as to calculate the amount of resources needed to save significant time, money and effort.
• Visibility and control.
  Having a strategy allows you to focus on the initial tasks to evaluate the effectiveness of the current business process, control each of the steps in the organization to achieve goals without errors and long waiting times.
• Commercial Excellence.
  A business strategy is a great tool for creating a competitive advantage with a long-term view of market needs, as well as emphasizing your company’s expertise as you accomplish each of your goals.

How to develop a business strategy

You can prepare a business strategy on your own, but you need to go deep into each of the planning stages and take into account the specifics of your company. Drawing up an action plan for a company consists of 7 steps.

Step 1: defining goals for the future

The first step is to form the results the company is interested in today and in the long term. There are many options, from increasing sales by 20-30% to bringing the company to the international market. There can be several goals, the main thing is that they should be real, understandable and achievable in a particular business.

Step 2: defining the vector of actions and values

The manager will achieve the set goals with the help of a team, and all personnel, from top managers to local employees, will contribute their part. It is important that everyone strives for a common result, realizes its value and understands what methods can be used in the work process, and what methods are unacceptable or ineffective.

Step 3: conducting a SWOT Analysis

SWOT-analysis (the abbreviation consists of the words Strengths, Weaknesses, Opportunities, Threats) is a method of strategic planning to assess internal and external factors that affect the development of the company. To compile it, take a piece of paper (or create a table in a computer) and fill in four columns:

• advantages of the business in its current state;
• weaknesses of the company, major drawbacks;
• real risks and threats that may hinder the organization;
• potential opportunities for development and growth.

Fill in the lines should be honest and thoughtful, fully disclosing information on each item. The result is an understanding of the overall business of the company at the moment, as well as determining what advantages can be used for business development and what risks should be taken into account.

Step 4: developing tactics for action

Based on the SWOT analysis, it is necessary to draw up a general plan of action that will help realize the set goals as quickly, efficiently and affordably as possible. Tactics can be different depending on the peculiarities of the business and the scope of the enterprise. For example, sometimes it is necessary to hire additional staff, start cooperation with new suppliers or emphasize the creation of a new USP (unique selling proposition).

Step 5: Evaluate and allocate resources

Tactics must be supported financially, and it is important for any business to minimize waste. It is necessary to rationally determine the number of resources needed to achieve the goals of the business strategy, allocate them to staff and understand who will be responsible for their rational use.

Step 6: Regular reconciliation

A business strategy is a “living” tool that needs periodic changes. There is no such thing as a single action plan that is relevant for years on end. It is necessary to regularly reconcile with the strategy, for example, during reporting periods, to understand how much reality coincides with expectations. This makes it easier to understand more clearly, for example, whether there are enough resources to fulfill the set tasks or whether the team’s actions bring the expected result.

Step 7: adjusting the strategy

After checking against the strategy, there are bound to be items that can be changed to make the company grow faster and more successfully. It is necessary to objectively assess the current state of affairs and make adjustments to the action plan in order not to miss opportunities for growth and financial benefits. There is no need to be afraid of change – only a timely response to market challenges allows you to achieve the intended success.

Let’s summarize

Business strategy is a documented tactic of a company, which helps to achieve the desired goals with minimal expenses in the shortest possible time. The plan of action is developed for several years ahead, but can be short-term, for example, if the market situation at the moment is not stable. The strategy is developed by the company’s management or third-party specialists. It is relevant for businesses of any size and form of ownership, as it helps to focus on goals and rationally use resources to achieve them.

A business strategy helps to:

• identify promising directions for the company;
• organize time management;
• assess risks and opportunities for the business;
• determine the resources that are available;
• optimize the work of each employee;
• improve team management.

To develop and implement a good business strategy, you need to:

• identify the main objectives for the business;
• draw up a common vector of values for the team;
• conduct a SWOT analysis;
• identify tactics for action;
• assess and allocate resources;
• conduct regular reconciliation with the results;
• change the action plan in time to suit the situation.

Stories of successful development of companies from scratch without a strong team and a clear action plan are something from the category of utopia and fantastic movie scripts. In practice, it is important to have a clear understanding of which way to go and what to use for this purpose. Business strategy is the main tool of every successful entrepreneur.