Simply put, a business strategy is a documented plan for how a company or business will achieve its business goals. It contains a large number of key principles that outline how the company will attain its goals in the targeted time.
For example, it will explain how to stay one step ahead of the competitors, meet your customer’s needs, and examine your organization’s growth and relevancy in the competitive market. Therefore, it is a business strategy that will give the business a sense of how they are doing, its strengths and weaknesses, and how to use or eliminate them to grow.
However, not every business gets the strategy right. Even some of the world’s popular brands have struggled due to poor strategy, but later they realized their mistakes and constructed a good busines strategy to attain their goals. Many aspiring entrepreneurs wonder how to distinguish a bad strategy from a good one or the signs that your company is operating under a bad one.
Do you wonder too? Keep reading this business startup guide to good strategy and bad strategy!
Good Strategy Vs. Bad Strategy
A good strategy is about discovering the problematic areas of the business and designing a way of coordinating and focusing visible actions on dealing with those areas. However, when a strategy fails to define a variety of flexible actions is considered a bad strategy.
A bad strategy is long on goals and short on action. It will emphasize too much on the importance of goals and make business leaders realize that goals are all they need for the growth of their business. It will highlight the strategic objectives that are unclear and impracticable.
To hide these flaws, high-sounding words or phrases are used in the documentation of business strategy.
Elements of a Good Business Strategy
Create a Clear Plan
A good strategy for your business will always have a clearly documented plan. It will highlight your business’s strengths and weaknesses. Also, with a good strategic plan, business leaders will know how to make their business stand out.
Learn how to Handle Setbacks
When you run a business, setbacks are normal. Therefore, you must not get demotivated. Instead, create a plan to deal with your setbacks effectively and achieve your goals. A good strategy will always come with a plan to confront your setbacks.
Celebrate Progress
A business should always celebrate its progress, no matter big or small. If anything works, you must celebrate it to boost your workforce’s morale. A good strategy will always include a plan to celebrate your progress. By doing so, not only the business leaders will stay happy and motivated, but also the employees.
Review and Evaluate
To run a successful business, business leaders must review and evaluate their progress. Therefore, a good business strategy plan will include a review and evaluation process. It is upto business leaders whether they want to evaluate the progress annually or at the end of a long-term project.
Elements of a Bad Strategy
Fluff Statements
To spot a bad strategy fast, you must look for gibberish or fluff words in the business strategy documentation. The more verbose words are used, the more unclear and poor strategy is.
No Recognition of Challenges
A bad strategy will fail to recognize the challenges your business is facing. When you cannot define the business problem, you will not be able to evaluate or improve the strategy. Any strategy not focusing on your business’s problematic areas is undoubtedly not good.
Too Much Focus on Goals
Many bad strategies are just a statement of desire rather than a plan for overcoming business obstacles. When a strategy focuses too much on goals, it clearly indicates that it is a poor one. A good strategy will also focus on goals. However, it will come with a proper plan for achieving them.
Bad Strategic Objectives
A bad strategy will have tons of bad strategic objectives. Now, you must be wondering what bad strategic objectives are. Any objective that fails to address critical issues your business is going through is a bad strategic objective.
Take a look at our latest blog: Why is the Failure Rate of Business Coaches So High?
Real-Life Example of Good Business Strategy
Tesla
Instead of promoting itself as a brand of comfortable and modern cars, Tesla took a wise decision and declared itself as a brand of expensive and luxurious cars. As a result, they had to increase their manufacturing costs to deliver their customers the quality and experience they promised.
An essential point of Tesla’s business strategy is that they have sensibly evaluated all their problems beforehand and come up with wise solutions to them. They realized that the market for modern and luxurious cars is highly stiff. Therefore, to cut themself some edge, they decided to manufacture a cost-effective electric car for the mass market.
Not only this idea helped them grab the attention of a larger target audience, but it also helped them accumulate many investments. Therefore, overall it was a good business strategy!
Real-Life Example of Bad Business Strategy
Kodak
Kodak was a leading technology company providing industry-leading products and services for commercial print, publishing, packaging, manufacturing, and entertainment. At that time, their print processing methods were modern. However, the company’s business strategy to maintain its legacy and not update its print processing methods did not favour it.
Later the company crashed because competitors with many modern print processing methods emerged in the market.
Conclusion:
Business strategies can both succeed or fail. However, it is not the business strategy that will only fail; your business will fail also. Therefore, you must take time and create a strategy for your business wisely. However, it is not as easy as it sounds. If you are unable to devise a good strategy for your business, ActionCoach can help you with that.
Contact us today at 01442 773310 or email westherts@actioncoach.co.uk to create a good strategy for your business!
