Business strategy describes where and how the company competes. This strategy is set in the context of customer needs, core competencies of the company, and the value offering relative to that of the competitors.
The word “strategy” has become synonymous with “plan” as companies talk about their “IT strategy” or their “financing strategy” but business strategy should be much more than just a plan. It should be the guiding light for how the company will outdistance competitors in providing value to the customer. It should be the bellwether for making decisions on the allocation of resources. It should be the rallying cry for the organization to move forward.
Business strategy describes where to compete. This description identifies attractive markets, market segments, products or services, regions or locations, and even customers. The selection of where to compete is based on understanding the needs, be they evident or hidden, of the particular purchase decision makers.
Business strategy describes how to compete. This description identifies the particular value that will be offered to these purchase decision makers. This includes features and benefits of the products and services and the way that the product or service will be taken to market or delivered.
Successful companies know their market. They know the profile of their ideal customer and the wants and needs of those customers. They understand what features and benefits provide value and just how much value in the eye of the customer. They are aware of their own core competencies that enable them to provide superior value or similar value more economically than competitors in their market space.
A business strategy need not be complex. In fact, the best strategies are clear and concise so that there is no ambiguity when the organization moves to implementation. All businesses have a strategy, whether it be documented or not, clear or not, sound or not.
Can the people in your organization clearly articulate your organization’s strategy?