Importance of strategy in business management
All successful businesses in this world are based on great strategies. Strategy and planning are two important steps without which you cannot think of a successful business. Whether you’re launching a new business, a new product, a new campaign, or a business division, you need to have a strategy first. 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 to Jack Welch and all the great managers and business leaders have spoken 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 came on board as CEO of GE, he knew there were big obstacles in GE’s way and that 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 don’t have a clear strategy and therefore every time a change happens or a new force arrives in the market, they feel defeated because they are not ready to change direction. If you want to bring about organization-wide change, you must first have a strategy that can help you go beyond simply achieving goals. From product launch to marketing and sales, and even finance and human resources, everywhere a good strategy is needed to win. The biggest tech companies like Google and Facebook are known for their excellent HR strategies. Apple and Microsoft are well known for their excellent product strategies. If Amazon became the biggest e-commerce giant, the reason was that it had a great strategy. From being just a book seller to being the largest online retailer, it was all based on the power of the leaders’ strategy. The strategy can be so powerful that it removes all small and large obstacles from its path. Jack Welch brought simplicity to his organization because he knew without it there would be clutter that could kill productivity by killing communication. He divided the entire business into several divisions where each had their own leader and each leader owned his business. He eliminated various levels of management to create a leaner, leaner, more productive structure. Communication could move faster and the decision that might otherwise take years could be made faster and in a matter of days. A strategy can change the direction of a business and everyone knows that GE has continued to expand despite the turbulent market and geopolitical situations.
Other large companies have also focused on the strategy to find faster growth in the international market. Apple, Microsoft, Starbucks, Nike, and all the other big brands have generated growth through excellent business strategies. They all have excellent products and marketing strategies. Apple’s product strategy has made it one of the biggest brands in the world. Similarly, Nike’s marketing strategy is globally appreciated 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 they know that businesses may 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 when all existing ideas are questioned, from innovation to globalization. It is the time for disruptive innovation and brands like Uber and Air BnB have found growth only through great ideas and business strategies. Just a simple piece of technology can’t help you win. Several brands have failed in this highly competitive world just because they made financial investments, but strategy-wise, theirs was weaker than their competitors. The number of your most critical competitors is always small and if you want to win you must have a stronger strategy than them. Flexibility, simplicity, and other strengths can be achieved through the use of a good business management strategy. Organizations with a complex business strategy and organizational structure find it difficult to change direction when change occurs. Technological changes can happen overnight and geopolitical and economic changes can challenge your greatest strengths. When new businesses emerge and challenge existing businesses with weaker value propositions, it becomes difficult for existing businesses to turn gears and such businesses fall apart.
Competition throughout the industry has increased in the 21st century and you must have a great strategy to make your presence felt. Having great managers on board would not be enough. You need to sync up to make use of the greatest strengths you have. Simplicity is a great strategy and the simpler your brand and product are, the more popular they are and the faster they grow.