The function of strategy is to ensure that human, physical and financial resources are always placed in the most profitable position to provide the chosen customers with what they want, when they want it. Achieving a successful strategy requires six distinct steps.
Step 1: Goal setting
You need to establish the essential theme of your business, in terms of your vision, mission (or business purpose), business idea and corporate objectives. These will have to be constantly fine tuned – and maybe reviewed – during Step 3.
Step 2: Situation review (Where are we now?)
This step involves:
- detailed research into, and analysis of, external factors and business intelligence
- analysis of market statistics and dynamics, and market segmentation
- SWOT analysis (strengths, weaknesses, opportunities, threats)
- competitor analysis
- establishment of strategic assumptions
- analysis of personal goals and objectives.
Step 3: Position and balance (What could the future look like?)
This means drawing up strategic statements that are strong and consistent, and reflect the close interrelationships between them:
- (1) vision, (2) business purpose, (3) business idea, (4) perceived value
- (5) driving force, (6) distinctive competence
- (7) segmentation, (8) competitive stance
- (9) collective behaviour (or culture)
- (10) financial reward.
At this stage,
- (11) branding
may also have emerged as an important opportunity.
Step 4: Strategy formulation (Strategic intentions)
At this point you should be able to summarise:
- the strategic and implementation critical success factors, and the gaps and weaknesses in the position that have to be closed
- short-term and longer-term strategies and intentions
- alternative plans for the mix of activities and resources needed (the four Ps: product, promotion, price, place).
Step 5: Implementation (The action plan)
For each time horizon (for example, twelve months, two years, five years), you need to produce a framework that can be easily communicated and monitored:
- Intentions
- Actions
- Measurable (goals/targets)
- By when.
Step 6: Monitoring and adjusting (The review process)
- Hold quarterly reviews of your action plans
- Monitor performance against your key performance indicators
- Adjust your plans as necessary – bringing elements forward, or emphasising or de‑emphasising them, depending on progress.
For more help on this topic, email me or call me on 020 7099 2621.