When we start wondering, “What is a Business Strategy”, we are usually playing around with a new or important idea. This leads us to question what exactly strategy is and what strategy will work best for our unique situation. We do this because we rightfully “want” to succeed.
Success is important and having a perfect strategy will make sure we don’t fail…right? Not so much. There is no such thing as perfect strategy that never needs change. Strategy is an iterative process. Be wary of the “wanting” part. The time people have spent “wanting” to do something has washed away more excellent ideas then any ocean ever could. Don’t fall into the trap of using strategic planning as an excuse for not acting. Strategy is good, but nothing justifies failure to act.
Your chance to realize your vision grows exponentially with every action you take and diminishes with each moment you put off action you should take. The growth is because you (and others you involve) gain vested interest and inertia with each action. The diminishing results from change around us overcoming what was an excellent opportunity when you thought of it. Don’t wait until you have the perfect plan and strategy to start. Execute due diligence then act. Take small actions right away, and larger ones as your strategy and plan coalesce.
Understand Strategy from the Source, Military, Academia, & Business Points of View
The Source – The Word Strategy’s Greek Origin
Strategy literally translates from Greek into English as (The Art of Generals).
The Military Mind – From a Military Perspective
Strategy is the general’s way. It is how you will accomplish military objectives. Things that are strategic are guided by the larger vision granted by a general’s perspective. Strategic actions put you in a literal or figurative position where you may execute tactical operations. Tactical operations are those where action is directed at the customer and/or competition) to further accomplish your mission.
Academia – Merriam-Webster Defines Strategy
(1) The science and art of employing the political, economic, psychological, and military forces of a nation or group of nations to afford the maximum support to adopted policies in peace or war
(2) The science and art of military command exercised to meet the enemy in combat under advantageous conditions
Business – Concise Explanation of Business Strategy
Strategy is the “way” or path by which one may go to accomplish what is important.
In small, medium and large businesses, a business strategy is a “way” of positioning yourself to outdo the competition. Thus, realizing a corporate vision, and accomplishing an organization’s mission & goals.
Three Universal Business Strategies
Up close, people’s homes are all different. However, they generally all have the same basic characteristics (foundation, roof, & walls). The strategies of successful business are like homes in this way. All successful business somehow establish a competitive advantage in the same basic areas (cost, market, and product). Michael Porter (at Harvard’s School of Business) is well-known for noticing this early on. He looked at how companies gained the competitive advantage in these areas. From there he distilled the strategic similarities into three universal strategies that help ensure success over and over.
My Understanding/Rendition of Porter’s Three Strategies:
- Be the value/cost leader.
- Become unique from competition (differentiate your product/service).
- Focus on specific market & product areas (meet needs of select customer group(s)).
My unique understanding of Porter’s three generic strategies is also represented in the graphic above. You are welcome to reproduce and share it freely. In return, I appreciate it if you’d point others to this website as a source of information for those wishing to grow successful in various areas of life.
The three general strategies above are an excellent framework for any organization to use in building their strategic plan. A strategic plan shows how you will create business processes and practices to position your organization as you describe in your strategies.
Strategy at Different Organizational Levels
Most organization need several different strategies. Some will be more effective than others in general. Others may be successful only when dealing with particular situations. While all businesses are at least a little different, they also have some basic similarities.
Levels of Strategic Planning
- Corporate – Make plans to decide what business the company competes in.
- Business – Make plans to beat the competition in areas of business defined at a corporate level.
- Functional/Operational – Make plans on for daily activity to support business strategies.
Strategic planning works best when it (and the processes/practices it drives) are relevant to all levels of your organization. The size of your organization only determines who will be doing the strategic planning. If you are a small organization, you’ll still need strategic plans for each level to make sure you compete well with larger organizations. Just remember, strategy and strategic planning work best as iterative and flexible processes. Understand the three universal strategies, then act on that understanding. Next, tailor the three universal strategies to your needs, then act on them. Then draft a strategic plan that explains how you’ll carry out those strategies (including and overview of what tactics might work well). Then act on it. If you incorporate lessons learned and adjustments for changes you’ll surely succeed.
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Until next time,
– Written by Seth Haigh