Strategies are the fundamental, long-term behaviors of companies and their relevant subdivisions toward their environment to achieve their long-term goals. Strategic decisions are those concerning the choice and implementation of strategies. They have a major impact on the success of a company and are often associated with high risks and uncertainties.
In this blog post, we want to highlight some important features of strategies and strategic decisions and bring them closer in an interesting way. Furthermore, we intend to provide suitable information for your individual questions in order to find new approaches for problem solutions.
Strategies are goal oriented
Strategies and strategic decisions should help to realize the vision, mission and values of a company and to implement them step by step. In order to be successful, they should be based to a large extent on the needs and expectations of the stakeholders. These are stakeholders who have an interest in the company, such as customers, employees, suppliers, generally the entire society, etc. Strategies must therefore be formulated SMART, i.e. specific, measurable, attractive, realistic, and scheduled.
Competitive orientation has top priority
Strategies and strategic decisions should give the company a competitive advantage. In doing so, they should help to achieve a superior position in the market compared to competitors and subsequently secure and defend it permanently. The strategy development process should be based on the company’s strengths and weaknesses, as well as on the opportunities and threats of the environment. A frequently used method for analyzing these factors is the SWOT analysis. It originates from English and describes the strengths, weaknesses, opportunities and threats for a company.
Strategies should be action-oriented
Strategies and strategic decisions should encompass and promote concrete actions and activities required to achieve the company’s goals. In doing so, they must take into account and make the best use of a company’s available resources and competencies. A common technique for planning and managing actions is the balanced scorecard model (BSC), which includes four perspectives: Financial, Customer, Process and Continuous Learning or Enhancement.
Strategies are mostly dynamic
Strategies and strategic decisions should be able to adapt to the constant and difficult-to-calculate changes in the environment and in the company. On the one hand, they must be flexible enough to respond to new challenges and opportunities, but on the other hand, they must be stable enough to ensure a clear direction and continuity. An important prerequisite for a dynamic strategy is continuous monitoring and evaluation of results and regular adjustment as needed. This can be excellently mapped in the generally known management process.
In the long term, a marathon rather than a short sprint
One of the most important characteristics of strategies and strategic decisions in general is the long-term orientation of an organization. Implementing decisions usually require a lot of finesse and in most cases take a lot of time during implementation. Furthermore, the scope of organizational activities is of crucial importance. Here, for example, the question arises as to whether a company should focus on just a few targeted activities or on various ones without getting bogged down.
Strategic alignment with the business environment
Organizations need an appropriate and adequate positioning in their market environment. This is necessary to determine the extent to which their products or services satisfy clearly defined market needs. For example, a small company might try to carve out a niche for itself in a market. Conversely, for a global corporation, this could mean buying out a company that has already successfully established its market position.
Definition for strategies
Overall, the most basic definition of strategies could be considered to be the long-term orientation of a company. However, the characteristics described above also give reason to describe a more detailed definition for strategies as follows. According to this definition, strategies are the long-term orientations and tasks of organizations that continuously create competitive advantages in a permanently changing market environment through the use of resources and competencies, with the aim of meeting the expectations of as many stakeholders as possible.
ASCW Consulting Hamburg – Strategies for the Mittelstand and SME
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