A strategy is a method or a plan chosen to arrive at a desired future, such as the achievement of a goal or solution to a problem. A business strategy (on the other hand) is the firm’s working plan for achieving its vision and deliver value that customers are willing to pay for. In other words, a strategic framework focuses the company’s direction, ensuring resources and existing capabilities are used efficiently to achieve relevant objectives.

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Why is it important?

Your strategy determines your company’s high-level direction, driving all internal decisions.   Investment, hiring, development, etc. decisions will be made in accordance with corporate strategy. It enables cohesive planning and decision making throughout the organisation, advancing common objectives.

An efficient strategy ensures business growth, the establishment and maintenance of a strong competitive position, as well as strong financial performance.

Hence, the absence of a strategic framework guiding and aligning lower-level decision-making, will result in different departments pursuing individual trajectories, wasting resources, time and money in the long-run.

Make sure you come up with a crystal-clear strategy and communicate it to lower-level decision makers.

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Planning

The choice of objectives is at the heart of the strategising process, but an effective strategy also clearly outlines how the firm will meet these objectives. How will the strategy be implemented? This is planning. You should consider questions such as:

• how does the firm differentiate itself from competitors?
• what type of distribution facilities can it best take advantage of?
• how are revenues generated?

The planning process is a challenging one, as both the company’s market strengths and weaknesses have to be considered.

Make sure your plan is relevant, realistic, and suits the market you’re playing in.

A clear set of goals, when combined with an honest appraisal of an organisation’s strengths and weaknesses, will reveal relevant and actionable opportunities within the current environment.

Source: Building the Business Case, Forbes: The Importance of Strategic Focus, Forbes: What the Heck Is A Strategy Anyway?

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