HOW TO DEVELOP A BUSINESS STRATEGY IN 5 SIMPLE STEPS
A business strategy is the means by which it sets out to achieve its desired ends (objectives). It can simply be described as a long-term business planning. Typically a business strategy will cover a period of about 3-5 years (sometimes even longer).
You don’t have to kill a tree or shut down the office for a week to create a successful strategic plan. In fact, you can create a successful plan for your business in just one day. It doesn’t have to be an overwhelming or a monumental task. It doesn’t have to be perfect or fancy. Just grab a few key people in your organization, turn off the phones and let’s get started.
The result of a well-developed and executed strategic plan is to develop a competitive advantage.
Just what is a competitive advantage? Business lingo aside, it is simply the answer to: What can your company potentially do better than any other company?
Understanding your competitive advantage is critical. It is the reason you are in business. It is what you do best that draws customers to buy your product/service instead of your competitors.
Extremely successful companies deliberately make choices to be unique and different in activities that they are really, really good at and they focus all of their energy in these areas. You may decide to incorporate your competitive advantage into your mission and/or vision statements.
Step Two : State your purpose.
A mission statement is a statement of the company’s purpose. It is useful for putting the spotlight on what business a company is presently in and the customer needs it is presently endeavoring to serve. It also serves as a guide for day-to-day operations and as the foundation for future decision-making. To write a mission statement, answer the questions: What is our business? What are we trying to accomplish for our customers?
What is our company’s’ reason for existing?
Step Three: Visualize the future.
A strategic vision is the image of a company’s future the direction it is headed, the customer focus it should have, the market position it should try to occupy, the business activities to be pursued, and the capabilities it plans to develop.
Forming a strategic vision should delineate what kind of enterprise the company is trying to become and infuse the organization with a sense of purposeful action. Think big! To write a vision statement, answer this question: What will our business look like in 5 to ten years from now?
Step Four Take an inventory.
The SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis helps you look critically at your organization. It is a tool to help produce a good fit between a company’s strengths and its opportunities.
Assess your strengths and weaknesses by answering these questions: What do we do best? What do we not do best? What are our company resources assets, intellectual property, and people? What are our company capabilities (functions)?
Assess your opportunities and threats by answering these questions: What is happening externally that will affect our company? What are the strengths and weaknesses of each competitor? What are the driving forces behind sales trends? What are important and potentially important markets? What is happening in the world that might affect our company?
Step Five Profile your customers.
If you want to move your company from being successful to wildly profitable, you need to meet your customers needs and wants better than your competitors do. Develop a customer profile by answering: What are our customers needs, motivations, and characteristics? How do we uniquely provide value to our customers? What should we improve to grow our customer base?