What is Business Strategy?

Business strategy is about understanding (1) Where you are as a company, (2) Where you are moving toward, and (3) How you will get to your desired future. Effective strategic decision making is vital in all areas of the business – not just the CEO and board members in deciding the company’s overall direction, but also for the front-line managers who will determine how the company’s vision will be transformed into an action.

Effective business strategy involves difficult choices – including which target audience to target, what products/services to offer and how to find the best way to decrease costs and maintain high profits. With the constant changing business environment, the company faces more challenging risks and obstacles. Even after the business strategy is well-formed and designed, a company must remain humble and alert to change, and view strategy as an ongoing and evolving process for the future growth.
The question remains to the senior and management team: Why do we need a solid and sound business strategy?
This can be explained in various manners and accordingly with the smart answers.

1.  Strategy helps identify new ways to bring profits. 

  • Development of Product Extensions (new products based on existing offerings)
  • Changes to the Product Mix (The range of available complementary products)
  • Price Adjustments  (Increase or Decrease in Costs)
  • Expansion toward new markets (Potential developments)
  • Deep Thinking about Product Performance in the Market (Which products and markets to abandon or save)

2. Strategy increases the effective use of limited resources.

It makes sure the limited resources within the company are devoted to the most important customers in order to remain their loyalty and get them to buy even more of the existing company’s products/services. It also guides the company to remain focused on what is the most important aspect of their business: How to remain afloat. It forces the company to utilize the best option in improving the company’s future growth and success.

3. Strategy improves the internal structure of a company’s organization.

By evaluating the company’s strategy, the managers can add or strengthen the necessary business skills to their own department. The clear strategy shows where the most improvements can be done, and why certain activities have been successful. Most importantly, the clear business strategy provides focus and impetus needed to develop among the company’s employees the skills, drive and culture to meet the clients’ need profitably. The clear strategy can provide a rewarding way to the company’s employee –  to improve among themselves, to build pride and value about their association to their great companies.

4. Strategy improves the employees mindset. 

When a company provides a clear sound business strategy and provide the right tools to the employees, the employees feel more empowered and embraced by the sound strategy. Employees like to do meaningful work that matters. So the company that embraces a sound strategy and  provides clear vision will make their employee think about these three aspects: (a)What they do, (b)How they do, and (c)Why they do. Empowering the employees can increase their commitment, engagement, creativity and productivity for the work they provide. By adding social values and meaningful commitment to their work, the employees believe in what they are doing and have confidence in the direction of the company is heading.  This momentum, in long term, breeds future potential growth and development in the employees’ skills. They will strive to improve their work performance because they feel and know that they are valued member of the company, not as an asset to be sold around or replaced.

5. Strategy improves potential products and services offered to the clients.

A strategy will not be successful if it doesn’t provide benefits to the clients/customers. By understanding the needs of the clients through research and frank with their customers’ feedbacks, then applying this understanding to guide the company’s decisions and products/services development. In short, the strategy that aligns with customer profitability with understanding of their needs will create long term products, not the short term sales with the potential impending financial fiasco.


In short, a sound strategy can:
1. Brings New Ways to Bring Profits
2. Increases Effectiveness of Limited Resources
3. Improves Internal Structure of an Organization
4. Improves the Overall Employees’ Mindset
5. Develops Profitable Potential Products/Service aligned to Clients’ Needs

Thank you for reading this post!

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