The Essential Components of Any Business Strategy

Editor's Note: Take a look at our featured best practice, Strategic Planning: Hoshin Kanri (Hoshin Planning) (153-slide PowerPoint presentation). [NOTE: Our Hoshin Kanri presentation has been trusted by an array of prestigious organizations, including industry leaders such as Apple, Boeing, Shell, Cummins, Johnson Controls, Telefónica, Discover, Stryker, Thales, Saint-Gobain, AGCO, [read more]

Also, if you are interested in becoming an expert on Strategy Development, take a look at Flevy's Strategy Development Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

* * * *

A business operating without a strategy is a business that is essentially flying blind. Without a solid plan in place, managers don’t know how to direct those that work beneath them. Similarly, if there isn’t any clear direction coming from management, your front-line workers will be much less effective at promoting your business vision and ethos.

But if you don’t put your business strategy together in the right way, you will end up sending out a message that is as confused as it is ineffective. It isn’t exactly easy to produce a solid business strategy, but it definitely is easy to avoid writing a disastrous one. As long as you strive to include and focus on the right elements, you can put together a business strategy good enough to conquer the world. Or at least your industry.

Financial Projections

There are lots of metrics you can use to determine how healthy a business is, but few are as simple or as universal as profitability. The more money a business has coming in, the healthier it is. After all, making money is what businesses are set up to do.

But simply writing down your income and expenses and then calculating the difference between the two isn’t enough. Your financial projections shouldn’t just let you know how much money you have available. They should also contain predictions about the amount of money you expect to have in the future and how you plan on spending it. Make sure that you regularly update your financial forecasts to take into account everything that has happened, and is expected to happen.

Clear Marketing Objectives

Marketing is both an art and a science. It requires a creative approach, but one that is also considered and methodical. An effective marketing strategy requires a whole host of factors to all come together at once in order to be effective.

You need to market through the right medium and with the right message. Of course, finding the medium and the message is where the challenge lies. Think about who your ideal customer is and the kind of media they are likely to consume; this is the best way to reach them. You then need to think of what exactly to say to them.

If you aren’t completely confident in your ability to handle your own marketing, it is better to hire someone else to do it for you. Otherwise, you will only end up wasting time and money. There are now marketing firms to cater to virtually every business niche. For example, if you run a law firm, you can hire a specialist in law firm internet marketing.

Consideration for Your Workers

If you want your workers to be able to implement your business strategy properly, you will need to craft a strategy that your frontline workers can get behind. Trying to encourage your workers to enthusiastically support something that they barely understand is doomed to fail.

Make sure that your business strategy takes into account your workers, their talents and their relationship with your business. If you are relying on your workers to deliver your strategy, it is important that you present them with one they can get behind.

Good planning is essential for the success of any business. A clear and concise business strategy will always beat one that is convoluted and bloated. Keep it simple and focused, and you stand the best chance of success.

Want to Achieve Excellence in Strategy Development?

Gain the knowledge and develop the expertise to become an expert in Strategy Development. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu

For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to "Tactical" Strategy. Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.

These frameworks include Porter's Five Forces, BCG Growth-Share Matrix, Greiner's Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.

Learn about our Strategy Development Best Practice Frameworks here.