To survive in today’s global market place, firms must be able to quickly exploit opportunities presented to them anywhere in the world and respond to changes in domestic and foreign markets as they arise. This requires a strong definition of the firm’s corporate mission, a vision for achieving that mission and an obvious understanding of how the company should compete with other firms. In order to obtain this understanding, firms must understand business strategies and its elements.
Business Strategies
A Business strategy is a synopsis of how a firm wishes to go about achieving their goals and objectives, whether by improving some aspect to sustain its spot in the business arena. Using the PESTLE and SWOT analysis would able a firm to know what strategies to implement or change.
Business Strategy is also known as Strategic Management. Strategic management is well-defined as the art and science of communicating, executing and assessing cross-functional decisions that allow a business to accomplish its goals. It is made up of three key elements which are strategy formulation, strategy implementation and strategy evaluation.
Strategy Formulation
Strategy Formulation helps managers construct a vision and a mission, know what their external opportunities and threats are, internal strengths and weaknesses, developing long term objectives and strategies. Vision is what a company would like to achieve in the future, for example, the Alzheimer’s Association vision statement is a world without Alzheimer’s.
A mission statement is a one-sentence statement illustrating the reason a firm is in existence and is usually used as a guide to staying on track with decisions, priorities and duties, for example, Porsche’s mission statement is “we are committed to providing an impeccable service to our demanding clientele of premium cars.”
External Opportunities
The external opportunities and threats are what the company cannot control while the internal strengths and weaknesses are what the company can control within the firm. These strategies should allow firms to have some competitive advantage. Competitive advantage is when a firm thrives in developing more value for consumers than its rivals. For example, Samsung’s competitive advantage over Apple is that they have more control over their devices. Companies tend to figure out what the competitive advantage is, so therefore firms need to conform to changes to trends and build on articulating, applying and assessing tactics to capitalize on those elements.
Strategy implementation is often called the ‘action stage’ because it’s after the strategies have been formulated, it’s executed. It involves continuous formation of objectives, plan policies, inspire workers and assign resources so that formulate strategies can be fulfilled.
Strategy evaluation is the final strategy which allows a firm to judge what strategies should or should not change. Management reviews every aspect from external opportunities and threats to internal strengths and weaknesses.
These factors especially external opportunities and threats are frequently changing, so therefore management must keep adapting.
What business strategies are you looking to implement in your business? Let us know in the comment section.