Strategy means consciously choosing to be clear about your company’s direction in relation to what’s happening in the dynamic environment. With this knowledge, you’re in a much better position to respond proactively to the changing environment. The fine points of strategy are as follows:
_ Establishes unique value proposition compared to your competitors _ Executed through operations that provide different and tailored value to customers _ Identifies clear tradeoffs and clarifies what not to do
_ Focuses on activities that fit together and reinforce each other _ Drives continual improvement within the organization and moves it toward its vision A strategy provides the vehicle and answers the question “How are we going to get there with the resources we have?”
A good strategy focuses on efficiency through:
_ Achieving performance targets
_ Out-performing your competition
_ Achieving sustainable competitive advantage
_ Growing your revenue and maintaining or shrinking your expenses _ Satisfying customers
_ Respond to changing market conditions
What is a strategic plan?
Simply put, a strategic plan is the formalized roadmap that describes how your company executes the chosen strategy. A plan spells out where an organization is going over the next year or more and how it’s going to get there.Typically, the plan is organization-wide or focused on a major function such as a division or a department. A strategic plan is a management tool that serves the purpose of helping an organization do a better job, because a plan focuses the energy, resources, and time of everyone in the organization in the same direction. A strategic plan
_ Is for established businesses and business owners who are serious about growth _ Helps build your competitive advantage
_ Communicates your strategy to staff
_ Prioritizes your financial needs
_ Provides focus and direction to move from plan to action A business plan, on the other hand, _ Is for new businesses, projects, or entrepreneurs who are serious about starting up a business _ Helps define the purpose of your business
_ Helps plan human resources and operational needs
_ Is critical if you’re seeking funding
_ Assesses business opportunities
_ Provides structure to ideas
What is the strategic planning process?
In order to create your strategic plan, you have to go through the strategic planning process. The planning process typically includes several major activities or steps. People often have different names for these major activities.
What are the components of a strategic plan?
There are several different frameworks to think about and use while you’re developing your strategic plan. Think of the frameworks as different lenses through which to view the strategic planning process. You don’t always look through two or three lenses at once. Normally you use one at a time, and often you may not know that you’re using certain frameworks that are embedded in your process. If you’re trying to explain to your planning team how pieces of the puzzle fit together, first you must understand the following components of the strategic plan: _ Strategy and culture: Your organization’s culture is made up of people, processes, experiences, ideas, and attitudes. Your strategy is where your organization is headed, what path it takes, and how it gets there. You can’t have strategy without culture or vice versa. Your culture is like your house, and if it’s not in order, the best strategy in the world can’t take your company anywhere. _ Internal and external: Similar to the strategy and culture framework (previous bullet), you have an internal and external framework. The strategy is external. You gather information from your customers, competitors, industry, and environment to identify your opportunities and threats. Through employee surveys, board assessments, and financial statements, you identify your company’s strengths and weaknesses, which are internal. _ The...