Strategy, though a small word, but carries so much of weight. Without this no organization can move even one step ahead and those which are trying to evade building strategies are only groping around in the dark with no particular goal or objective in view. This can be quite a dangerous proposition considering the constant competition level that the organizations have to tackle and win over every day they are in the business.
Strategy building can only by the top management or the owners as they look at the “bigger picture” of the business and have a more comprehensive understanding about where the business is going and the resources at disposal. Strategizing has to start with answering a few basic questions about the business such as – where is the business attempting to reach, its target markets and customer base, how performance can be improved in the long run, the environmental factors that can hinder or enhance performance as well as the meeting the expectations of the stakeholders.
Strategy building can be done at three levels – corporate level, business level and operational level, based on the level of business where the strategy is supposed to be implemented. After proper analysis of strategy, the right path needs to be chosen and implemented.
If its strategic analysis we are talking about we have to with Michael E. Porter’s Five Competitive Forces theory which by far is the most widely accepted method. This refers to identifying the competitive forces that affect the performance of the business. These include threat of new entrants, threat of substitute products or services, bargaining power of suppliers, bargaining power of buyers and rivalry among existing competitors. On the basis of the above the business strategy will be chosen and implemented after proper consideration into the market conditions. It’s all about setting the long term goals in the correct manner so that the business is steered in the right direction.