Faculty & Research About Alumni Strategy What is a business strategy? And how to develop one! 7 minute read â± Last update: August 2022 A business strategy in its simplest form is a tool for helping you achieve your business goals A business strategy provides the guiding principles for many organizational decisions, such as hiring new employees, or developing new products. And helps you to define the methods and tactics you need to take within your company. Creating a business strategy that’s in line with the vision you have for your organization is a time consuming exercise. In this article, we’ll discuss what a business strategy is and why it’s important, the different components of a business strategy and explore some examples of business strategies to help you generate ideas for your own company. Whilst a business strategy is simple to understand in theory, developing a good business strategy, and then actually implementing it, is no easy task. Discover the key elements to understand business strategy : What is a business strategy? How is strategy different from tactics? What are the key components of a business strategy? Why is a business strategy important? How to build a business strategy? How to measure the success of a business strategy? Have you got a strong business strategy? ? What is a business strategy? In essence, a business strategy is an organizational master plan. This plan is what the management of a company develops and implements to achieve their strategic goals. Essentially, a business plan is a long-term sketch of the desired strategic destination for a company. This long-term sketch will contain an outline of the strategic, as well as tactical decisions a company must take to reach its overall objectives. This business strategy will then act as a central framework for management. Once this framework is defined, management must live and breathe it. It helps the different departments within a business work together, ensuring that all departmental decisions support the overall direction of the organization. This helps to avoid working in silos, or different teams pulling in opposite directions. At this point it is important to highlight the difference between a business strategy, and a mission statement. One example is Amazon’s “to be Earth’s most customer-centric company” this is not a strategy, more the vision that the strategy will deliver, and creates the framework within which the strategy will be developed. “However beautiful the strategy, you should occasionally look at the results.” – Winston Churchill How is strategy different from tactics? Before we get into the details of how to build a business strategy, it is important to understand how strategy differs from tactics. Both of these contribute to each other, yet are entirely different things. Strategy as we’ve identified refers to the long-term goal or roadmap for an organization, and how it plans to reach them. Or, the path the organization will take towards its goals. Conversely, tactics refer to the specific set of actions taken to reach the organizational goals, or strategy. For example, a company may have a strategic vision to become the cheapest supplier of a product in the market. This requires their managers to negotiate with suppliers, reducing purchase costs. This, is a tactical move taken towards achieving the set strategy. “Good tactics can save even the worst stST
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