Strategy: Definition
The concept of a strategy is often rather difficult to define. The specified phenomenon pertains not only to the business setting but also to the everyday use of strategizing as the tool for decision-making (Markides, 2004). Therefore, several parameters for determining the validity of a strategy need to be considered. These include the target population, the products or services that will be offered, and the method with the help of which the specified opportunities will be delivered. Thus, a strategy includes two key agents, which are the creator thereof and the decision-maker (Markides, 2004).
Elements of a Strategy
The creation of a strategy requires the ability to envelop all available solutions and elicit the decision that satisfies the needs of all stakeholders. It is critical to view the process of strategy development as a set of activities that are closely interconnected and interrelated (Markides, 2004). However, due to the limitations of the human mind, one cannot possibly embrace every aspect of multiple intricate links within an organizational strategy. However, several key principles such as maintaining a balance between the key activities, ensure that they are compatible, that they meet the market demand, and that they are the constituents of an “interrelated system” (Markides, 2004).
Developing a Strategy
Therefore, designing an elaborate strategy requires an in-depth analysis of internal and external factors that define a company’s ability to function in the target market. In order to ensure competitive success, one should construct a strategy statement, which will help prioritize the key steps to be taken and define the time frame within which the selected objective should be accomplished. The specified pieces of advice are especially important for an organization that wanders into a previously unexplored area and needs to establish a strong presence in a particular market. Therefore, any strategy should include the following elements to remain viable: goals, scope, competitive advantage, and trade-offs (Collis & Ruckstad, 2008).
Objective and Scope
It is critical to determine the frames within which the project will be implemented. For this purpose, one needs to construct the hierarchy of the company’s statements and determine the direction that the firm is willing to take in the specified area. The firm’s mission, values, and vision, which constitute the corporate philosophy, have to provide the foundation for the design of the strategy, which will be guided by the balanced scorecard. The latter includes the objective (ends), the scope (domain), and the advantage (means) (Collis & Ruckstad, 2008). Defining the objective, however, may be difficult since the traditional notion of maximizing the shareholder value does not provide actual recommendations for the steps that need to be taken.
Competitive Advantage
Due to the extraordinarily high levels of rivalry in the global market, designing a competitive advantage is critical. It allows an organization to become immediately noticeable and instantly recognizable among a range of similar projects. Thus, the tools for designing and increasing competitive advantage have to be introduced into the organizational environment (Collis & Ruckstad, 2008). Sustainability should be considered as the basis for the competitive advantage since ti will allow allocating corporate resources reasonably and leveraging expenses within the corporate context. In order to construct a competitive advantage, one will need to design a value proposition and a map that will pinpoint the company’s current position in the target market (Collis & Ruckstad, 2008). Thus, a competitive advantage that will make a firm instantly recognizable and very memorable can be created.
Edward Jones’s Activity-System Map
When considering particular devices for creating a competitive advantage, one should use the Edward Jones’s Activity-System Map as a starting point (Collis & Ruckstad, 2008). The suggested framework sets the platform for increasing the value proposition of the produced goods and services, therefore making an organization successful in the environment that is characterized by high rivalry rates. The map allows locating the intrinsic links between seemingly unrelated processes within an organization, thus confirming the idea of a firm as a single entity where every element is linked to the others (Collis & Ruckstad, 2008). The map covers the items such as marketing, product, price, and location; headquarters, regional structure, and ownership; technology, branch support, investment, and compensation; and other aspects of a firm’s functioning.
Strategy Statement and Strategic Sweet Spot
Developing a strategic statement that will provide the foundation for the firm’s further functioning in the global market is critical. Without the specified step, a company is unlikely to succeed in its strategy. Thus, one needs to create the statement that addresses the needs of as many stakeholders involved as possible, at the same time being very clear and positive. The statement needs to appeal to individuals, investors, and company members (Collis & Ruckstad, 2008). By meeting the company’s needs and customers’ demands, at the same time being distinctly different from rivals’ offerings, a project will succeed.
Building a Strategy: Directions
However, to build the strategy that can be described as superior, a firm will have to think “beyond customers, products and activities” (Markides, 2004). Specifically, a company needs to foster the creation of an environment that, in turn, helps to apply the selected strategy. Specifically, it is critical to integrate the new principles of functioning in the global market at all levels, including organizational, production-related, and communicational.
Need for Change
It is important to bear in mind that the modern economic environment is very changeable and prone to influences of disruptive innovations. Therefore, a company will need to adjust its strategy to the alterations that the selected market experiences. It is important to realize that no strategy will remain sustainable forever, and that a firm has to adjust to new trends and tendencies emerging in the context of the target economic setting (Markides, 2004). Thus, tools for change forecasting and adjustment to the alterations in a particular business setting are required. For this purpose, a firm may need to integrate the concept of non-incremental innovations into its framework of functioning in the global market.
Conclusion
The phenomenon of a strategy is very difficult to explain and define, yet, when shaped properly, it allows making a firm extraordinarily successful. Therefore, strategies aimed at building competitive advantage and promoting innovative solutions should be seen as crucial to the effective functioning of a firm. With the specified principles in mind, a company leader will guide their project to the ultimate triumph.
References
Collis, D. J., & Ruckstad, M. G. (2008). Can you say what your strategy is? Boston, MA: Harvard Business School Publishing.
Markides, C. (2004). What is strategy and how do you know if you have one? Web.