If there is a word that gets overused in the business world it’s strategy. So, what is business strategy? What are the types of business strategies that can be deployed? How’s it different than a strategic plan?
We are talking about it all. It can be confusing – we get it.
What Is Business Strategy?
Stratavize Consulting Inc. defines strategy as an organization’s positioning against competitors by the unique core value the organization offers to the ideal customer segment it serves. Essentially, it’s the company or organization’s competitive advantage. Every organization needs a clearly defined strategy.
Can donors give their money to a variety of nonprofits? Yes.
Then, does a nonprofit need a strategy? Yes.
Can hospitals and other referral partners send their patients to a variety of hospice organizations or possibly do it themselves? Yes.
Thereby, does a hospice organization need a strategy? Yes.
Do college bound students have many options? Yes.
Therefore, does a higher education institution need a strategy? Yes.
Every organization has competitors. Thereby, every organization needs a strategy.
Does Your Organization Have A Clear Strategy?
What product do you offer that no one else offers? Do you service your customers in a way no one else can? If you are unsure, you need a strategy.
We typically begin with helping our clients define their best envisioned future, their final destination, or their North Star. We describe the North Star as the impact you want to make on the human condition. In other words, how do you want to change the lives of those you serve?
North Star Question To Drive Your Strategy
How will your customer, client, community, student, or whomever you serve change as a result of your organization’s work?
Once you’ve defined your organizations final destination or the impact you want to make its time to discuss your strategy.
Key Question To Ask To Define Your Strategy
Here’s a question to help you get at your organization’s strategy:
What is the path to reach your final destination?
If you don’t have a final destination, you don’t have a solid strategy. You must define your final destination (North Star) BEFORE you determine your strategy, aka path, aka unique value.
A strategy does not include milestones, goals, objectives, or metrics. A strategic plan does. But, more on that later.
What does “being strategic” mean?
Strategy is about being future-focused and deciding the chosen path to reach the organization’s best-envisioned future. Therefore, it’s a framework for making decisions.
Being strategic means consistently making those core directional choices that support the value you bring/positioning and will move you towards that best-envisioned future.
What Are The Business Strategy Types?
We believe there only a few types of business strategies. Therefore, all organizations will fall into one of these.
Price – some organizations, like Walmart, compete on price. This is a hard way to compete because it can often be a race to the bottom. However, organizations can achieve price competitiveness through operational efficiencies or reduction in quality.
Product – this could be the quality of the product like Mercedes-Benz or innovative products like Apple. Apple isn’t the only one selling computers or cell phones, but they commit to endlessly innovating those products. Likewise, a nonprofit may offer services to a specific group it serves that no other organization does in the area.
Experience – this is your customer or client’s experience with you. Chick-fil-A uses experience as its differentiator. After all, they sell deep-fried chicken and waffle fries. They are not trying to offer innovative products and are not the cheapest. Instead, they promise a ‘pleasurable‘ experience. Many higher education institutions use the ‘student experience’ strategy to differentiate themselves from competitors. A better customer experience can be achieved through hiring people as a competitive advantage, innovative technology, or operational efficiencies.
Make sure to distinguish strategy from growth. Organizations can achieve an increase in revenue through cost reduction, merger or acquisition, or new market/customer segment entry. These are ways to grow revenue and expand, but they are not a strategy.
Elements Of Strategy Design
- Define North Star – this means getting clear on the organization’s best envisioned future and the impact the organization wants to make.
- Analyze – evaluate the current state of the industry, trends, predictions, & roadblocks.
- Create Distinctive Positioning: now define how your organization can offer a product, service, process, unique.
What is a Strategic Plan?
A strategic plan is a detailed road map that specifies the long-term goals, objectives, and steps that a business will take to attain its’ North Star. It acts as a road map, offering precise instructions for making decisions and allocating resources.
A well-designed strategic plan includes several essential elements. It defines the organization’s anticipated future condition by articulating its vision. It also lays out the organization’s mission statement, which describes the goals and principles that guide it.
Thirdly, it contains a comprehensive analysis of the organization’s internal and external surroundings. This analysis will determine strategic priorities, and goals will be set.
You Need A Strategy And A Strategic Plan, Now What?
To help you with the process, we have few questions to consider before contacting a consultant. We also provide you a few questions to ask once you’ve contact one. Read our blog 10 Questions To Ask Before You Hire A Strategic Planning Consultant.
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Interested in learning more about how Stratavize serves our clients as a strategy facilitator, project managers, and more? See our unique approach to strategy design and implementation.