Business Basics - Week Three: Business Strategy

A business strategy is the collective term for all the steps a company takes to reach its goals and achieve its mission and vision. It involves understanding what the business does, what it needs to have, and what it needs to do to reach those goals. An effective business strategy serves as a blueprint for the different aspects of running your business.

According to Nirmala Reddy, Senior Management Executive, Consultant at Stanford Seed, and writer for Forbes Magazine, “If a company wants to stay competitive in the industry, it must create and execute a strategy that is good and sound. Amazon has been successful for years because their strategy is tightly tied to their vision.” The strategy reflects the strengths and weaknesses of the company and answers how the company plans to respond to the threats and opportunities in its given market. It also considers the resources it has and how to best allocate them to achieve its set goals. That is why a strategy is often called the lighthouse of a business; it guides and focuses all aspects of the business.

• Vision: A vision is a vivid mental image of what you want your business to be at some point in the future, based on your goals and aspirations. Having a vision will give your business a clear focus and can stop you from heading in the wrong direction. A vision statement captures, in writing, the essence of where you want to take your business and can inspire you to reach your goals.
• Values: The values of a business describe what is acceptable and what is not in pursuit of the vision. The values encompass ethical standards, legal requirements, and codes of conduct.
• SWOT Analysis: A carefully developed analysis of strengths, weaknesses, opportunities, and threats (SWOT) is a critical part of the strategy. This exercise helps define the business thoroughly and capture details that might otherwise be missed.
• Tactics: Planned business tactics define how the company will get the necessary work done most efficiently. English comedian and writer, Frank Muir says “Strategy is buying a bottle of fine wine when you take someone out to dinner. Tactics is getting them to drink it.”
• Measurable Successes: Every business needs a way to measure the strategy’s success so that adjustments can be made. This can be accomplished by setting SMART goals, meaning they are specific, measurable, achievable, relevant, and time bound.