strategy development stepsstrategy development steps

Business Strategy Development Steps

These are winning business strategy development steps:

1. Business Model

2. Business Objectives

3. Strategic Priorities

4. Strategic Options

5. Strategic Alternatives,

6. Decision and Implementation Phases

7. Controls and Monitoring, and finally

8. Measurement and Control

Let us discuss each in detail below:

Business Strategy Development Steps

1. Business Model:

A business model is a blueprint for growing and profiting from an organization. It is the basis for a vision and mission statement as well as for strategic decisions. It describes how an organization creates value and captures it. A business model describes how an enterprise creates products, markets them, delivers them, and captures value in exchange.

2. Business Objectives:

A business objective is a measurable performance result that the enterprise intends to achieve within a given time frame (1-3 years). An objective must be related to one or more strategic priorities. Business objectives determine the actions that management should take to plan and manage its activities. These actions are into strategies.

3. Strategic Priorities

A strategic priority is a set of interrelated business objectives that define the direction and focus of the enterprise. The priorities are determined by the business model and should be in line with the vision and mission statement.

4. Strategic Options

A strategic option is a set of alternative courses of action that management could pursue to further its strategic priorities. The key question is whether the enterprise has enough resources (financial, human, material, knowledge) to implement all feasible alternatives; or whether there are limits by constraints (environmental, regulatory, competition).

5. Strategic Alternatives

A strategic alternative is an option from within a set of feasible alternatives identified during the planning process that provides a preferred course of action for implementing an element of strategy. 

An alternative can be defined as:

A choice among alternative courses of action. A strategy represents choices about which alternatives to pursue at any point in time. Strategic alternatives are selected from the full range of feasible options based on their ability to create value through achieving one or more business objectives.

6.Decision & Implementation Phases

The planning process must include decision points at which managers make choices among strategic alternatives so that they can formulate implementation plans and achieve the organization’s objectives. Strategic decisions are those made at critical junctures in the life cycle of a strategy. They occur because certain opportunities or threats require an organization to re-evaluate its overall approach to strategy formulation or execution.

7.Controls & Monitoring

Controls refer to the policies and procedures deployed by management to ensure that activities are carried out as planned; monitoring refers to information gathering and analysis used by managers during execution to evaluate actual performance against planned performance. Controls are essential for ensuring proper operation as well as for detecting deviations from plans. They allow managers to react promptly when problems arise. Effective controls allow organizations to minimize risk while maintaining flexibility.

8.Measurement & Control

Measurement provides feedback on progress toward goals and objectives; control is the means for taking corrective action when problems occur. Measurement and control are critical for ensuring the quality of performance. To develop a sound set of controls, managers must understand what performance is supposed to look like. If a measure is not defined in sufficiently concrete terms, it cannot be used effectively to monitor and control performance.

Conclusion

Business strategy development is a process that will help you to define your strategy. This process helps you to decide whether your business model is right or wrong, whether your business objectives are right or wrong, what are the strategic priorities and what are the strategic options that you should choose to implement the strategy. Business strategy development will also help you to decide whether your strategic alternatives are right or wrong.

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