Business Strategy - The How and the Why You'll Win
How to Build a Comprehensive Business Strategy
A great business strategy doesn’t just tell you HOW to win. It tells you WHY you’ll win, too.
The WHY is grounded in two parts of a strategy document that are often overlooked: the external market assessment and the internal organizational analysis. These two sections tell you everything there is to know about why the chosen business strategy is the best course of action for your company. They describe the specifics of your situation, outside-in and inside-out and ensure that your future objectives and investments will have the right kind of impact.
At its core, the market assessment answers two questions:
What are the opportunities that exist out there in the market that my company can go after?
What are the barriers and risks to leveraging these opportunities?
A great market analysis looks at the totality of opportunities, not just the ones that the company is already engaged in capturing or that are obvious ones. This phase in building the business strategy should come with an exhaustive list of what is happening in your vertical and the opportunities for creating value that will exist in the next 2 to 3 years.
The internal organizational analysis also answers two key questions:
What are the BEST opportunities for my company to go after?
What are the challenges the company will face and what is the investment required?
At this phase, you start matching the position and capabilities of your company with the opportunities you have discovered in the market assessment phase and you prioritize them based on how accessible and rewarding they are. You also look at what it will cost you to approach these opportunities and what are the needed investments - from CAPEX, to people to R&D spend. And you map out, through scenario planning, what are the likely competitor responses to your planned moves.
And, finally, at the third pahse of the process, the business strategy lies out the future focus, intiatives and structure that the company will adopt in order to capture the market opportunities with the most potential and grow to occupy a better position in the market. At a minimum, the business strategy needs to answer:
What are the company’s objectives and strategic initiatives for the next 2 to 3 years?
What are the changes and investments that need to happen to get to the desired market and economic performance?
Business strategy development is very rewarding when done right. It’s one of the most important initiatives a company will embark on, because it:
Provides the company with a solid and honest understanding of the market environement and the position of the organization in it,
Focuses the workforce on the opportunities with the most return on investment,
Offers the best preparation for execution.
Here is a detailed template for developing your business strategy, also available on The Strategy Deck Resources page.