Saturday, April 10, 2021

Importance of Strategy in Business Management

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All the successful businesses in this world are based on great strategies. Strategy and planning are two important steps without which you cannot think of successful business. Whether you are launching a new business, a new product, a new campaign or a business division, you must first have a strategy. The best managers know the value of strategy and how critical it is to the health of a business. From Steve Jobs to Howard Schultz, Jack Welch and all the great managers and business leaders have talked and written about strategy and its importance. Behind great products and great marketing campaigns, there is the power of strategy. Kotler has also highlighted the value of strategy and how a good marketing strategy helps brands succeed in a highly competitive world.

When Jack Welch joined as GE CEO, he knew there were major hurdles in the way of GE and finding growth would be difficult. So, he decided to give his business a new direction. The strategy he used was simplification. What often happens is that executives and managers do not have a clear cut strategy and so whenever a change happens or a new force arrives in the market, they are left feeling defeated because they are not ready to shift direction. If you want to bring an organization-wide change, you first need to have a strategy that can help you go farther than simply achieving targets. From product launch to marketing and sales and even finance and HR, everywhere you need a good strategy to win. The biggest technology companies like Google and Facebook are known for their great HR strategies. Apple and Microsoft are well known for their great product strategies. If Amazon became the biggest e-retail giant, the reason was that it had a great strategy. From being just a book seller to being the biggest online retailer, everything was based on the power of the leaders’ strategy. Strategy can be as powerful to remove every small and big hurdle from your path. Jack Welch brought simplicity in his organization because he knew without it there was going to be clutter which could kill productivity by killing communication. He divided the entire business into several divisions where each one had its own leader and each leader had the ownership of his business. He removed several layers of management to create a leaner structure which was more agile and more productive. Communication could move faster and the decision that could otherwise take years, could be made faster and within days. A strategy can change a business’ direction and everyone knows GE has continued to expand despite the turbulent market and geopolitical situations.

Other big businesses have also focused on strategy to find faster growth in international market. Apple, Microsoft, Starbucks, Nike and all the other big brands have created growth through great business strategies. All of them have great product and marketing strategies. Apple’s product strategy has made it one of the biggest brands of the world. Similarly, Nike’s marketing strategy is appreciated globally for its ability to connect with its fans. An attractive strategy makes an attractive business. It brings synchronization and improves collaboration and communication. Big brands are always ready for the future and know that business can have to go through critical economic phases where only a good business strategy can help. The last decade has seen several phases of economic and geopolitical turbulence. Without an excellent strategy, it becomes difficult to face the changing winds. It is a time where all the existing ideas from innovation to globalization are being challenged. It is the time of disruptive innovation and brands like Uber and Air BnB have found growth only through great business ideas and business strategies. Just a simple piece of technology cannot help you win. Several brands have failed in this highly competitive world only because they made financial investments but when it came to strategy theirs was weaker than their competitors. The number of your most critical competitors is always few and if you want to win you must have a stronger strategy than them. Flexibility, simplicity and other strengths can be brought about through the use of a good business management strategy. Organizations that have a complex business strategy and organizational structure, find it difficult to change direction when a change happens. Technological changes can happen overnight and geopolitical and economic changes can challenge your biggest strengths. When new businesses come and challenge the existing businesses with weaker value propositions, it becomes difficult for the existing businesses to shift gear and such businesses crumble.

Industry-wide competition has increased in the 21st century and you must have a great strategy to make your presence felt. Just having great managers onboard would not do. You need to synchronize to make use of the biggest strengths you have. Simplicity is a great strategy and the simpler your brand and product are, the higher will be your popularity and faster your growth.

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