The Top 5 Objectives of Business Strategy You Need to Know

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The Top 5 Objectives of Business Strategy You Need to Know

Business strategy is the art and science of identifying, creating, and implementing purposeful plans and actions that aim to achieve key goals and objectives of an organization. Generally, a well-crafted business strategy can help a company to gain competitive advantage, allocate resources effectively, adapt to changing conditions, improve performance, and provide value to customers and stakeholders. In this article, we will discuss the top 5 objectives of business strategy that you need to know and apply.

1. Determine the Vision and Mission of the Company
The first objective of business strategy is to determine and communicate the vision and mission of the company. The vision refers to the long-term aspirations and purpose of the organization, while the mission represents the specific activity or service that the company provides to its customers. A vision and mission statement can provide a clear and inspiring direction for the company, guide decision-making, align stakeholders, and attract top talent.

Example: Apple’s vision is to “be a company that stood at the intersection of technology and liberal arts, and to create innovative products that change the world.” Its mission is to “design and deliver extraordinary customer experiences with innovative products.”

2. Analyze the External Environment and Industry Trends
The second objective of business strategy is to analyze the external environment and industry trends that affect the company’s competitiveness and growth opportunities. This includes assessing the market size, customer needs, competitors, suppliers, regulations, and macroeconomic factors. By understanding the external landscape, a company can identify potential threats and opportunities, differentiate itself from rivals, and adapt to the changing market conditions.

Example: Netflix conducted a comprehensive analysis of the video streaming industry and realized that the market was shifting towards on-demand, personalized, and original content. This insight led to the creation of Netflix Originals and the expansion to global markets.

3. Identify the Core Competencies and Resources of the Company
The third objective of business strategy is to identify the core competencies and resources of the company that enable it to deliver superior value to customers and sustain its competitive advantage. Core competencies refer to the unique skills, knowledge, and capabilities that the company possesses, while resources include tangible and intangible assets such as patents, brands, culture, and networks. By leveraging its core competencies and resources, a company can create and offer products and services that customers find valuable and that rivals find hard to imitate.

Example: Amazon leverages its vast logistics network, customer data insights, and cloud computing infrastructure to provide fast and personalized delivery, an easy-to-use e-commerce platform, and innovative services such as Alexa and Prime Video.

4. Set Realistic and Measurable Goals and KPIs
The fourth objective of business strategy is to set realistic and measurable goals and key performance indicators (KPIs) that align with the vision and mission of the company and reflect its strategic priorities. Goals can range from increasing revenue, market share, or customer satisfaction to reducing costs, risks, or environmental impact. KPIs are specific, quantifiable, and time-bound metrics that help to track and evaluate the progress towards achieving the goals. By setting clear and achievable goals and monitoring the KPIs, a company can motivate employees, focus resources, and improve accountability.

Example: Tesla’s goal is to accelerate the world’s transition to sustainable energy. Its KPIs include the number of electric cars produced, the reduction of carbon emissions, and the expansion of renewable energy sources.

5. Execute and Innovate Continuously
The fifth objective of business strategy is to execute the plans and actions effectively and to innovate continuously to improve the value proposition and stay ahead of the competition. Execution involves allocating resources, delegating responsibilities, communicating progress, and adapting to the feedback and results. Innovation involves seeking new opportunities, testing and learning from experiments, disrupting existing models, and creating new sources of value. By executing well and innovating frequently, a company can create a culture of excellence and growth, delight its customers, and create a sustainable future.

Example: Google’s culture of execution and innovation is reflected in its Agile methodology, 20% time policy, and moonshot projects such as self-driving cars and quantum computing.

Conclusion:
In conclusion, business strategy is a crucial aspect of any organization that aims to achieve sustainable growth and success. The top 5 objectives of business strategy include determining the vision and mission of the company, analyzing the external environment and industry trends, identifying the core competencies and resources of the company, setting realistic and measurable goals and KPIs, and executing and innovating continuously. By focusing on these objectives and applying them effectively, a company can better position itself to achieve its goals and create value for its stakeholders.