A business strategy typically is a document that clearly articulates the direction a business will pursue and the steps it will take to achieve its goals. In a standard business plan, the business strategy results from goals established to support the stated mission of the business. A typical business strategy is developed in three steps: analysis, integration and implementation.
In the analysis step of business strategy development, one of several methods is used to analyze a firm’s market, resources, obstacles to success and specific advantages. The goal of strategic analysis is to identify what a business wants to accomplish, the strengths it can bring to bear on accomplishing the goal and weaknesses that need to be addressed prior to integration and implementation. Strategic assessment methodologies can include evaluating the business environment, gaming various competitive scenarios, determining what market forces are at work and rating competitors, among others.
Integrating a business strategy usually is one of many steps in a larger business planning process. A business plan begins with an overall vision. From the vision, a mission statement for the business is constructed, usually the shorter and more precise the better. A mission leads to specific goals the business will achieve to accomplish its mission and that in turn leads to strategy to achieve goals. Specific tactics are usually then developed to support the business strategy.
This process usually begins with senior managers who then communicate the strategy to respective teams. Each team is made to understand how the strategy will affect its daily activities. Taking the business strategy to the lowest level of the company possible helps integrate the strategy throughout the firm. Business strategy can be applied to small businesses, too.
Implementation of the business strategy typically follows assessment and integration. Individual teams in the company, which understand respective roles in bringing the strategy to pass, implement the specific tactics developed to support the strategy. At the implementation stage, individual business units or teams often have a subsection of the business strategy on which they focus.
Business strategies usually include a measurement component as well. The measurement component of the business strategy is derived from the overall goals established to accomplish the business mission. Goals are broken down, usually by both business unit and time estimated to accomplish them. The business strategy includes a component to periodically compare current progress against goals. Based on how well the business strategy has led to goal achievement, the strategic analysis process is repeated to adjust the strategy as necessary.