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Knowledge Bank

What is strategy?

Strategy is how you intend to achieve a result.

There are many possibilities on how to achieve something, therefore it is essential to clarify the particular how (strategy) you choose.

This choosing of your 'how' facilitates clarity, focus and differentiation from others.

Strategy is how you intend to achieve a result

Business Strategy

"Business strategy is the creation of a unique and valuable position, involving a different set of activities."
(Michael E. Porter)

In business, strategy is the 'how' that makes you different and accelerates you towards your goals (desired results).

Having a clear strategy means having to decide on what you will, and won't do. This can be difficult for adolescent businesses who have in the past done anything just to survive and grow.

Having a clear strategy means that you will be something more than operationally excellent. That is, you have to do better than run well and deliver on time, on budget and on spec. You have to have a unique position (that differentiates you from your competition) and you need to provide additional value to your stakeholders (beyond reliable product/service delivery). It is these features of uniqueness and value that enable growth and longevity.

Setting your Business Strategy can be difficult because it requires you to draw a line in the sand between what you will do and what you won't.

Examples of strategies

For example:

To differentiate yourself from your competitors...

Are you going to be a low cost provider?
Will you be the recognised experts?
Do you offer out of this world service?

To attract and retain the best staff will you...

Pay at the upper quartile of market rates?
Offer flexibility to achieve work-life balance?
Be a fun, social place to work?
Provide the best operating conditions - equipment, processes, training, etc?

To increase your profitability will you...

Focus on sales growth?
Instigate efficiency improvements?
Launch existing products to new markets?
Multiskill your workforce?

Different scopes of strategy

There are also different scopes of strategy.

Strategies can be quite 'high' level, that is, relate to the general direction of the business, or they can be quite specific. More specific strategies are often referred to as tactics or initiatives.

Irrespective of scope it essential that all business define their strategy clearly so they know where they are going and how they intend to get there.