Eight key elements of a good business strategy

What is a business strategy? A business strategy is an articulation of the general direction of a company in the medium and long term. It basically specifies how an entity competes in an industry. In other words, strategies define the rules and guidelines by which the mission, objectives, etc. can be achieved. Such strategies may cover the entire business or may relate to functional areas such as operations, marketing, finance, or human capital. Strategies differ from tactics, which are short-term approaches. Your organization requires a unique strategy to properly differentiate itself in the market. But what are the eight key elements of a good business strategy? What are the salient features of a good business strategy? The guidelines are contained in this article.

1. The vision, mission and values ​​of your company are vital. You need to define the purpose of your business. Your vision is where you want to be in the future, while your mission is the fundamental reason you exist. Your company values ​​mean the guiding beliefs that underpin your culture.

2. A SWOT analysis is another important element of your business strategy. You must analyze your strengths and weaknesses, which are internal, and your opportunities and threats, which are external. What industry are you operating in and how profitable is it? What is your competition? Where are you now? What are your core competencies? The evaluation of the competition, for example, considers aspects such as products, operating costs and prices.

3. Your unique value proposition is another big problem. This relates to the products and services you offer or claim to offer. How are they different from other companies? What unique value do you offer that is vital to the needs of your target customers? Your value proposition gives you the competitive advantage.

4. What about your value chain? This denotes the succession of activities to design, produce and market, deliver and support your products or services. Its value chain constitutes the sequence of activities through which value is added. Your value chain must be consistent with the needs of your customers. Activities that enhance value are called value drivers. These are tools to identify ways to create more value. The value chain includes primary activities and supporting activities. Analyzing activities along your value chain also helps identify competitive advantage.

5. The market or the client is also a key element of your business strategy. Where are you going to be active? What are the demographics? Are there expansion opportunities? What will you do – and not do? Are there segmentation problems? Do you understand the purchase criteria, for example?

6. Economic aspects are essential. You must indicate the desired quantified results. Consider the available resources and also the effective allocation of resources. Consider your skills and abilities. Is there any leverage I can take advantage of? Do you have methods to monitor and evaluate your financial or monetary performance?

7. Now what about implementation, including operational processes? How are you going to do it? How do you want to get there? For example, you can opt for accelerated growth or, alternatively, organic growth. Issues such as the policy framework that guides how the organization will operate become important. You have to balance the risk with the desired result. Also consider and choose from various business options. Its programs establish the implementation plans of the key strategies. These should cover budgets, performance goals, resources, objectives, and other relevant topics.

8. Finally, the last vital element of your business strategy is the cornerstone of continuous improvement in implementation and execution. Business strategy is a dynamic process. It is never static. You should be able to feel the change and modify your strategy accordingly over the years. You must be flexible and open to change. When you assess progress through reviews, you can implement new plans.