All businesses need a strategy to succeed. A business strategy is different from a business plan. It is more detailed, looks further ahead and is more visionary.
Why focus on business strategy?
It's easy to lose sight of the larger context when you're busy running a business, particularly a small one. But spending time on business strategy will help you:
- know where your business is heading and how to position it to get there
- understand the challenges and opportunities your business faces and the best ways to address them
- improve the overall performance of your business
Importantly, the task of forming a strategy for your business should not be delegated. Rather, as your business grows you can spend more time on it as others handle day-to-day activities. Strategic planning for business growth.
Business strategy tools
Many business tools can help you determine strategy. A popular one is a SWOT analysis, in which you:
- consider all your business strengths
- consider all your business weaknesses
- identify any business opportunities
- identify any threats facing your business
Analysing your results carefully will show you how to build on strengths, resolve weaknesses, exploit opportunities and avoid threats. See our SWOT analysis example.
Another strategy tool is a gap analysis, in which you analyse in detail where your business is now and then consider where you want it to be in the future. Next, you analyse the gap between the two in order to find ways to bridge it.
Forming your business strategy
A business strategy should be realistic, putting in place measurable targets for the medium term. It should be reviewed regularly. Measure performance and set targets.