See how Quantive can help you achieve more of your strategy.
See how Quantive can help you achieve more of your strategy.
Why is a business strategy important?: a successful business strategy incorporates your company’s vision, its most important goals, and the plan of execution for achieving those goals.
Every business has a strategy — whether it’s well executed and intentionally crafted is another story. Business strategy is an ever-evolving topic, with an overwhelming depth and complexity worth hundreds of articles.
But in this article, we’ll stick to the most important concepts, covering:
Let’s get started by exploring the definition and importance of a good business strategy.
So where does it all begin with business strategy?
In short, it's the foundation for every method and tactic your business takes to accomplish its goals, business objectives, and mission.
Business strategy is the guiding principle and action plan for your organization. It’s built through a vision and mission, objectives, and a dedicated decision-making process.
A business strategy isn’t just a plan for what you’re trying to achieve as a company — it reflects both your internal and external environment equally. It should position your goals and offerings against your competitors, market demand, and new opportunities.
Without a connected strategy at the corporate, business, and functional levels, your teams will:
A great business strategy is your market differentiator, your competitive advantage, and your edge in performance.
An effective business strategy can be broken down into three distinct levels:
Corporate strategy is the “top-level” strategy that guides your organization. This is where strategy mapping, strategic planning, visualization, strategic management, and vision-mission development occurs. This foundational step ultimately determines the trajectory of your business.
To develop a thriving corporate strategy, a few simple, but important questions must be answered:
These questions help you understand your company’s identity and pursuits. That is:
Check out corporate strategy execution from a 30,000 ft. perspective
Business strategy is the middle ground between corporate and functional execution. It establishes and coordinates the positioning of your organization by applying the mission and vision to your competitive landscape.
If corporate strategy focuses on the internal environment, business strategy focuses on the external. Business strategy explores the questions centered on value, like:
With value creation at the core, investing in a sound business strategy is key to your team executing as effectively as possible.
Improperly positioned firms encounter competitive difficulties and can fail to sustain competitive advantages.
- Saylor.org
With the second-tier business strategy created, functional strategy has a foundation. VPs and managers influence the key decisions in functional strategy. They have the responsibility of bridging functional strategy to the business and corporate strategy.
Functional strategy is then managed by the departments, teams, and initiatives in an organization where the work is done.
Different functions require different strategies, each informed by the unique goals, aspirations, and needs of the department.
Without alignment between functional and business strategy, organizations experience an operational disconnect. While the functional strategy should meet the department's unique needs, it must also contribute to corporate and cross-departmental strategies.
Let’s take this one step further by examining how marketing and sales teams may work together. At the strategic level, they may share and depend on information like:
It makes sense for these departments to align their strategies, as they work with similar business goals in mind. When functional units align, their impact compounds.
The collective functional strategy funnels up to the corporate strategy, forming a collaborative organizational strategy across multiple levels within the organization.
With so many moving parts, contributors, and focus areas, ensuring a clear understanding of business strategy can be complicated.
While different models reflect different outlines or structures, business strategy focuses on six elements:
Start by clarifying your organization's vision and mission. These statements provide the foundation for your strategy and should be used as springboards for every decision, plan, and action.
Evaluate what your business can offer in relation to market demand. Identify your unique strengths and resources that set you apart from competitors, and see whether these align with your target audience’s needs, preferences, and pain points. As part of this, you should assess potential opportunities and risks in the market to see how you can best address or capitalize on these in time.
Develop a strategy that’s aligned with your assessment of the market. Incorporate additional insights gathered from market research and other internal data to best align your offerings and positioning to meet customer needs and stay competitive.
Assess the financial viability of your strategy by analyzing the potential return on investment and the costs associated with implementation. Develop clear financial projections and risk management strategies.
Ensure your strategy is aligned across corporate, business, and functional levels. Define overarching company-wide goals, departmental strategies, and tactical plans that support the larger strategic vision.
Set clear, measurable goals and objectives to track progress and performance. Define key performance indicators (KPIs) that reflect the success of your strategy and enable ongoing evaluation.
Execute your strategy according to the established plan, and continuously monitor performance against set goals. Regularly review metrics and adjust tactics as needed to stay on course.
Embrace a culture of adaptation and innovation, remaining agile in response to changing market dynamics and emerging opportunities. For example, many companies are using AI for business strategy to simplify planning, evaluating, and implementing strategy. Continuously seek feedback and iterate on your strategy to stay competitive.
Tracking the success of your business strategy implementation is not just about hitting predetermined milestones. It involves aligning your actions with your overarching vision, ensuring they support your long-term goals.
Here are a few best practices for effectively monitoring the impact of your business strategy and supporting strategic initiatives.
While your business strategy outlines your goals and key objectives, the defined measurements and metrics measure your strategy's success.
Goal-setting methods such as objectives and key results (OKRs) and key performance indicators (KPIs) can track progress by directly reflecting the strategic outcomes you're trying to achieve as a business leader. These OKRs and KPIs can include financial metrics (e.g., revenue growth, resource allocation, profitability, ROI) and non-financial metrics (e.g., customer satisfaction, market share, brand awareness).
Collecting the correct data is the backbone of effective performance tracking, which helps senior executives make the right decisions. Dig into various sources (i.e., financial reports, customer feedback, market research, internal performance metrics) to ensure your KPIs and OKRs are constantly updated with the most relevant data, keeping your strategy in tip-top shape.
Regular assessments are necessary when trying to keep your strategy on track.
By scheduling periodic reviews (such as weekly or bi-weekly OKR check-ins), you can consistently evaluate progress against predefined targets, identify potential deviations, and course-correct to keep your strategy relevant.
When developing a business strategy, what works today may not always work tomorrow. Stay vigilant, flexible, and agile, adapting your strategy (alongside its goals, benchmarks, and metrics) to account for market conditions, emerging trends, and new opportunities.
A well-crafted business strategy is a market differentiator and competitive advantage, vital to achieving sustained growth and success. By using the breakdowns and elements in this article, your organization can begin developing the best business strategies for your environment.
Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.
As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy and playbooks from a static formulation to a feedback-driven engine for growth.
