To achieve superior performance, it’s essential to know how to create a business strategy. You must create a robust business strategy that’s unique to you and clearly details how you will succeed in the competitive environment in which you operate.
There is no single best business strategy!
Instead, when creating your business strategy, it’s essential that you develop it using best practice, to ensure that you develop a strategy that meets the unique circumstances and goals of your business (including the market, industry and environment it operates in).
Knowing how to create a business strategy is an essential task for creating success.
How to Create a Business Strategy – The Framework
Developing a successful business strategy and realising its objectives is no small task.
At a high level, the strategy development process commences with an assessment of the environment the business operates in.
This is done by examining and assessing the:
Macro business environment to understand the key trends that may impact on the business and its opportunities
Industry in which the business operates, the key factors that drive its profitability and how these may impact the business
Market the business operates in including the nature of the customers, their needs and desires, market segments, location, relative demand and so on
By understanding how to create a business strategy, you can fully appreciate the key factors critical to the business’s success.
How to Create a Business Strategy - Knowing the Rules of the Game
Knowing how to create a business strategy involves understanding the ‘rules of the game’. That is, the environment the business operates in sets the parameters for what your business must and must not do in order to be successful.
In essence, the macro business environment establishes the ‘rules of the game’, and the industry and market establishes the competitive ‘arena’ where the game is played.
By understanding this, you can establish which rules must be followed and which ones can be broken – how to play the game better and outcompete your rivals.
Some of the key tools used for conducting this assessment include the Pestle Analysis, Five Forces Analysis, Market Analysis and the Critical Success Factor Analysis.
Using these tools is a key aspect of knowing how to create a business strategy.
How to Create a Business Strategy - Conceiving Strategy
Once you have a full appreciation of the ‘rules of the game’ and the ‘arena’ where the games is played, the next step in working out how to create a business strategy is to establish how you will ‘play the game to win’.
How you will outcompete enough of your rivals to achieve the growth and profit levels you seek. This involves:
Examining how well your business is situated and is performing within its environment, industry and market (its strengths and weaknesses)
Identifying or conceiving opportunities
Selecting an appropriate opportunity
Making the critical choices needed to create and sustain a competitive advantage capable of seizing the chosen opportunity while managing the associated threats
Conducting this analysis, evaluating the options and making the key choices are at the heart of knowing how to create a business strategy.
Some of the essential tools used for undertaking this assessment include the Competitor Analysis, SWOT Analysis, Value Proposition Canvas, Business Model Canvas and so on.
Implementing and Realising Strategy
A plan that is not implemented achieves practically nothing.
An effective business strategy involves not only making key choices (but crucially) taking action to realise the outcomes you seek. Knowing how to create a business strategy means:
Establishing a shared understanding and support for it
Applying it consistently and continuously
Developing appropriate metrics that can be used to measure the effectiveness of its implementation
Measuring performance and reporting progress
Learning and adjusting as you go
While your business strategy does not need to be written to exist, having it clearly communicated and understood is crucial to having it actioned.
Likewise, you must measure your progress and performance to ensure that you achieve what you set out to accomplish. If you do not measure performance, you will not know if you are delivering on what you need to.
Developing and Realising a Winning Strategy
By knowing how to create a business strategy and adopting a sound approach, you can effectively explore opportunities and conceive solutions to exploit them.
By developing a winning business strategy, you can sustain long-term competitive advantage and success!