Business

The Basics of Strategy – A Comprehensive Guide

For those who have already written, read, leafed through, or simply watched books on strategy, you quickly noticed that their volumes are rarely less than 800 pages. Consequently, it seems important to us to specify that this article does not in any way aim to bring all the elements composing the subject. Really, this paper needs to be easy, synthetic, and pragmatic. It aims to provide certain elements of understanding of the strategy in a realistic way and is intended for the uninitiated through trade advertising.

What is business strategy? History and origins

How can we simply define the business strategy? By browsing the literature on the subject, we find a plethora of definitions. Here is one that seems relevant:

But first, we must point out that business strategy has its origins in the military domain.

Indeed, the greatest military strategists, used this concept to carry out their fights by studying in particular the distribution of the opposing means as well as the movement of their armies before the war, then the different movements performed during combat.

But it is only from the 19th century that this notion begins to take an economic orientation, with the struggle between the bourgeois class and the working class, exposed by Karl Marx. It highlights the strategy of the economic and political seizure of power by the working class.

However, it was simply from the 1950s that business strategy experienced a great boom, with the highlighting by Harvard in the United States of the strengths and weaknesses of the company as well as the risks and prospects that happen. in its atmosphere.

Following this, we can identify 4 major eras in the evolution of corporate strategy with the help of a brand strategist:

The 1960s: Establishment of strategic analysis models with the assistance of sending military officers

The 1970s: operational method, implementation of activity portfolio optimization matrices, introduction of the notions of strategic planning (Igor Ansoff)

The 80s: competitive analysis, discovery of Porter’s work to get ahead of its competitors by predicting their behavior

The 90s/2000s: general model abandoned, emphasis placed on strategies that constantly adapt to their environment, essential strategy aimed at optimal positioning vis-à-vis its competitors

Why is it important to have a strategy/s inside an administration?

To begin with, it is important to have a strategy to define a course or, in other words, to set an orientation, a guideline. Then, this strategy is essential to concentrate its efforts on its objectives of success, and, consequently, to avoid dispersing itself. In addition, it is essential to define the framework of the company and give meaning to it. Ultimately, a strategy seeks to simplify action and lessen ambiguities.

Ultimately, the best way to be convinced of the importance of a strategy is to ask the question the other way round: what do you do if you don’t have a strategy? Here is a possible answer: let’s wait to see what happens, and react accordingly… This may seem surprising, but this is often the way that a great part of SMEs and startups work, without being aware of it.

Strategic decisions

As soon as we talk about approach, the notion of selection is important. Indeed, when developing a strategy, it is impossible to achieve everything, and we must make certain choices. These choices are called “strategic decisions”.

Strategic decisions are characterized by a long-term orientation, the definition of the scope of activity with the aim of creating a competitive advantage, which is difficult to imitate, as well as an optimal allocation of resources. Moreover, they are extremely influenced by competition.

Strategy in practice: strategic management

 

By nature, in organizations we tend to focus on rather operational aspects such as improving the quality of service, visual presence, sales management or even financial performance. All these elements are important for the proper functioning of the company. Though, we should not forget that we are in the operational, or in other words in the successful implementation of the strategy and not in Strategic Management. This is invented of the following factors:

How to develop a strategy?

From a point of view that can be described as simplistic or reductive, the strategy is limited to three fundamental questions:

  1. Where are we?
  2. Where are we going?
  3. How do we get there?

However, the approach is clearly pragmatic.

In a more comprehensive and specific way, they can be redeveloped as follows:

  1. What for? vocations + missions
  2. What to do? goals and objectives + activities + positioning
  3. How to do? organization + planning + implementation of actions

Even if these questions fit on three lines and seem to be common sense, they are crucial for the establishment of a strategy. Furthermore, it is obviously more difficult than it appears to solve them in a structured and precise way.

Understand the different strategic levels

The strategies intervene at different levels of the company, but at three mainly. The main thing, at first, is to know in which level we are. The different levels are as follows:

The corporate strategy concerns the organization (adding value – choice of geographic coverage, product and service offer, distribution between activities).

The strategic approach

At a certain point, the approach to be taken must be formalized to become methodological. Below is the well-known LCAG model which essentially relates to Domain Competitive Strategies (DCS):

  1. Formulation of objectives
  2. Identification of the strategic problem
  3. Proposal of a catalog of solutions
  4. Evaluation of these solutions
  5. Choosing a solution
  6. Implementation of the chosen solution

Environmental Scan and Resource Assessment

In any diagnosis prior to the strategy, many factors and forces present must be studied in order to have the necessary knowledge.

  • Environments
  • Economic
  • Competitive
  • Request
  • Social and societal
  • Scientific and technical
  • Policies and regulations
  • The resources
  • human
  • physical
  • Financial
  • Reputation
  • Technological
  • Organizational
  • Informational

Conclusion

Strategy is a difficult science but not certainly complicated. If we want to maximize the possibilities of success of an organization, it is essential to work on the different strategies or at least on the business strategy. Strategies aren’t just for big companies. An SME or a startup need it just as much, if not more.

In training, we meet several business leaders for whom the term “Strategy” is scary. This is often owing to the trouble of knowing the subject and knowledge what it can bring to their business. These fears are completely legitimate. But how to get power over the development of the business, uniformity between the different actions and activities, and at the same time have the possibility of predicting threats and prospects?

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