What is business strategy?
A business strategy is an overall roadmap that allows a business to accomplish its goals. It contains a set of guiding principles that help you and your organisation make critical decisions, prioritise tasks and allocate resources in order accomplish key business objectives. The strategy promotes purpose and aligns the business objectives, leadership, organisation, people, technology, products and services to the vision of the company.
Why is it important you have a business strategy?
Imagine trying to build a house without any idea of where to build, what the house will look like, how many rooms it will have, what materials to use, with no plans and no sense of who is going to help you and how much money it will cost to finish.
When the destination is clear, every step is planned, every resource is allocated, and everyone knows what is to be done, business activities become more efficient and effective. This allows the business to focus limited time and money on the tasks that drive success. It is also critical to successfully securing low cost financing and investment.
What happens if you get it right?
First Direct – Britain’s first ‘virtual’ bank, with no branches and no bank managers, today has over 1.5mm customers
Aldi and Lidl – offer a limited range of own branded products at extremely competitive prices by steering away from promotions which disrupt the stability and increase costs within the supply change.
Netflix – bypasses middlemen or intermediaries by directly distributing its original content to customers via its own streaming service. Netflix provides unlimited subscription, meaning that customers have unlimited access to entertainment content on the platform.
What happens if you get it wrong?
Kodak –Kodak failed to recognise the enormous opportunities in digital photography, a technology that it invented, which ultimately outstripped its film-based business model.
Blackberry – Its strategy to focus development in favour of business customers (security and management) instead of the underlying people using the devices (usability, customer experience), as well, as failure to build to allow the use of Apps, led to its demise in the face of competition from Apple and other Android devices.
Thomas Cook – The leisure travel industry merger of MyTravel and Thomas Cook left the company struggling to service over a billion pounds of debt, which it was never able to recover from. Despite several business transformation programmes, the margins were so tight that left the business highly exposed to external threats from geopolitical, regulatory and industry specific disruption.
Blockbuster – Failed due to a change in senior leadership, reversing the digital transformation strategy when investors and franchise owners did not understand or buy into the vision.
Where to start – Map the existing business, understand your “Why?” and revisit your vision
Before you can look forward you need to assess where you are now.
Start by mapping the existing business model and revisiting the purpose.
You need to understand your personal and business WHY. Why do you do what you are doing? Where does the enthusiasm and passion come from?
Understanding the “Why?” gives your business purpose and allows you to define a vision that motivates and inspires your team to believe in the business and the path forward.
Next, work back from the long-term vision to now. Articulate meaningful goals and objectives that will drive the business from its current state to its future success. For some business founders the vision is financial, for others its lifestyle, for some footprint, others its quality or innovation.
If you would like to know more follow the link below or contact us to see what a good business strategy can do for you.