The key to the survival of any organization is a well-formulated business strategy and precise implementation. Every leader has a responsibility to focus on developing and executing the business strategy that contributes to the organization’s growth. Consider this critical decision made by Google in 2005. At that time, their search business was gaining mass popularity. However, the founders and management understood the need to diversify beyond search and acquired a small, mostly unknown company called Android in 2005. Who would have said then that Android would rule the smartphone ecosystem a few years later? Equally important was the acquisition of YouTube to diversify into videos. These business strategy examples were exceptionally impactful and resulted in strong business growth for Google over the next few years.
Business strategy refers to the direction (also known as objectives) that an organization should follow and the associated actions and critical decisions that will help drive the accomplishment of the strategy. Many organizations develop a vision and a mission statement that provide the overall objectives and help to determine the business strategy. A well-compiled business strategy also considers risks and challenges that the organization might face and prepares for actions to address the risks or challenges.
While evaluating the business strategy, leaders at all levels in the organization (top management, functional leaders, and business unit leaders) need to focus on the best course to fulfil objectives.
Presented below are the key factors and criteria that govern the business strategy in any organization. Attention needs to be placed on both the short to medium-term (1-2 years) and the long-term (beyond three years) strategy.
Focus on key stakeholders – Understanding the essence of the existence of the organization and the objectives of key stakeholders (such as the shareholders and investors as well as customers) helps in determining the business strategy
Strong upper management – The experience and industry knowledge of the top management (executive leadership) and the overarching business plan are key to formulating the business strategy in the best interests of the organization
Laser focus on changing industry landscape and all the players in the industry – All leaders in the organization need to 1) focus on and monitor the changing landscape and ecosystem and 2) maintain a view of the players in the industry. This helps in preparing business strategy or quick course correcting if applicable.
