What is strategy and does it matter?

What is Strategy and Does it Matter?

By: Renee T. Sanders

Photo on 5-8-13 at 1.08 PM #3

Many would agree that strategy is no longer a static assessment of your business environment.  For many strategists, scenario planning was and still remains the tool of choice.  Many firms continue to develop corporate strategy during the annual planning cycle.  In fact, there are a lot of inputs, corporate wide, that are built into the planning process, such as developing the corporate budget.

Although we have seen tremendous improvement in the economy, the trend that continues to impact how we develop strategy is the shifting landscape.  Information technology has the biggest impact on the way a company develops its corporate strategy. The market still shows signs of restructuring, downsizing, and redefinition of the competitive landscape.

New entrants into the industry still present one of the greatest risks to a firm’s strategy and its ability to capture value.  Past techniques and tools depended on the organization to know who they competed against.  In a market that is as volatile as this, your strategy needs to be dynamic and fluid.  I am not saying that you need to change it monthly, but you do need to build in a measure of flexibility in the overall strategy development process.

Flexibility is a key requirement of strategy development

Understand why your industry is changing.  Is it due to technological advances, are there bottom feeders in your industry? Your biggest threat to your strategy will always be the new entrants in the market.  They will do it better, faster and cheaper than you.  They will add new technologies, where your technologies are dated.  They will dangle the carrot in front of your customers with very enticing promises.  They will change the rules for how business is conducted.  This is the new world order today.

Understanding what is impacting the change in your industry can provide a direction forward for becoming more agile in the strategy process.  In other words, what is the back up plan when you notice changes in the environment?  Your strategy process needs to be rigorous allowing for redefinition of your strategy.   This process is better known as emergent strategy.

Emergent Strategy Solutions

Emergent strategy is the blending of strategic analysis, strategy development and strategy implementation.  It is an unplanned strategy that can be implemented rapidly.  The key is to manage emergent strategies that can impact your market. Try incorporating your backup plan when competitors introduce new technological features into their products.

Responding rapidly implies your company is always constantly scanning the market for changes that could have a major impact on your profitability, market-share and customer base.  Anticipate counter actions by your competitors. Be sure that the top leadership is on board with the strategy development process and its implementation.  Buy-in at the top ensure’s a willingness to rebuild inside and out when the time comes for redefining your strategy.

So does strategy matter?  If you don’t have a strategy for your business, you won’t be in business long.  Strategy does matter, and what matters most is how responsive you are when changes are constant in your industry.  This is a time when we need to anticipate changes in the market, not just plan it based on the three step process.  Build flexibility and reliability and finally buy-in needs to happen at all levels.  Be sure to communicate the corporate strategy from the top down so everyone is on one page.

Cheers!

Follow me on Twitter @reneetsanders

Renee Sanders is a PhD candidate in business at Capella University, where her specialization is strategy and innovation. Renee holds an BBA and MBA from the University of Maryland University College. Renee currently works in for a defense contractor as the Director of Strategic Pricing and Price to Win.

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