Strategy trilogy

What is strategy?

Strategy is something we hear very often nowadays. Everybody has a strategy but still so many companies fail. Why this? Maybe because strategy is a kind of a fashion word and it is often confused with tactics, objectives, goals etc.  Strategy is about determining the goal of the company for a time period and specifying the objectives (in between steps-milestones) and resources which will help to reach the goal. No matter how big or small a company is, a proper strategy will enable the company to maintain a sustainable competitive advantage over its competitors in the current fast changing environment.

Why do we need a strategy?

Developing a strategy helps to set directions and priorities which simplifies decision making since then everyone knows what should and should not be done. When strategy is put down on paper and is communicated to the staff, everyone works focused to the same goal. This optimizes resources utilization! Machines, equipment, money, facilities are all used within the strategy set. Very important too, people do not lose time working on irrelevant or low priority subjects but focus on their tasks.

How do we develop a strategy?

Analyzing the external environment in which the company operates is the first step in order to identify opportunities and threats coming from outside. An internal analysis will bring up strengths and weaknesses of the company itself. This provides a picture of the company’s potential and position in the market. Next step is to set a goal (e.g. to move from currently 8% to 14% market share within two years), create scenarios of alternative courses of action and decide for one. Once the goal(s) and course of action are determined, objectives (in between steps-milestones) are defined and the necessary resources and structures are put in place (strategy implementation).