A Guide to Building a Better Business Strategy

Whether your company is just starting out or you have big aspirations for future growth, every organization needs a strategic business plan to guide it toward identified objectives. Having clear goals matters. Without them, you risk steering your company off track, which could cost you both time and money. 

A strategic business plan is a document that lays out your company’s goals and points the way forward for your business. These goals could range from developing new products and targeting new market segments to solving underlying organizational problems and adapting practices to prepare for the future of work. Creating a business strategy also helps to improve company performance by aligning stakeholders around a single vision, uncovering biased thinking, and ensuring that you have clear key performance indicators (KPIs) against which to measure progress.¹

This step-by-step guide to developing a better business strategy is a good place to start.

Questions to ask in developing a sound business strategy

Building a solid business plan starts with asking the right questions. These questions will help you analyze where your company currently stands, where you want it to go, and how you can get there. They also give you the opportunity to explore current trends in the market and understand where your business fits in. 

Before you start creating a business strategy, make sure to ask yourself:²

1. Where is your company now? Take stock of how your business is currently performing.
2. How did you get to this point? Explore what tactics, strategies, actions, and decisions have resulted in your current success or caused difficulties. 
3. Where do you want to go from here? Decide what goals you want the company to accomplish within the next three to five years. 
4. How do you get to where you want to be? What steps do you need to take to reach your goals, and how do you go about taking these steps?
5. What are the biggest challenges you’re facing? Uncover what problems you’ll have to solve to reach your goal, what internal and external threats you’re up against, and what your biggest obstacles will be.
6. Who is your target customer, and how has this changed? What are the needs and expectations of your current target market, and how have their beliefs, values, and behaviors evolved?³
7. How is your industry changing? Are there disruptive players or technologies influencing your position in the market?
8. What should the company start doing more of? Analyze how your company is currently running and get input from your team on what they think is working, what could be scaled up, and what needs to change.
9. How are you measuring progress? Decide on metrics to track progress towards your goals and put steps in place to ensure regular check-ins.
10. How do you best serve your team and shareholders? Think about your employees and investors, and make sure your business strategy aims to benefit everyone, not just your customers. 
11. What skills or resources do you need to achieve your goals? Your team may need to be upskilled, so consider how you can create a culture of learning in your organization to fill any gaps. Also, think about other resources you may require to reach your strategic objectives and whether you need to outsource additional support.

What tools and frameworks to use when creating a business strategy

You can use various frameworks and tools to develop a sound business strategy that drives the future growth of your company.

The tools you draw on are entirely up to you. Different tools work better for different plans, so make sure you use one that works best with the goals you have in mind, rather than trying to fit your company into all of these molds. 

Below are four of the most common frameworks and tools used for building a strategic business plan:

SWOT Analysis

SWOT is an internal analysis tool used in strategic planning to identify and highlight your company’s strengths, weaknesses, opportunities, and threats.⁴ Team members have a brainstorming session where each member creates a list for each aspect based on their research and experience. Once created, they rank their entries in terms of importance and use them as a basis for creating their development objectives, tactics, and strategy.⁵

Porter’s Five Forces Model

This tool looks at what’s going on outside of your business and the critical economic forces impacting the market. These forces include current competition in the industry, the potential of new entrants into the field, the power held by suppliers, the power of customers, and the threat of substitute products and services. Applying this analysis helps you understand your industry’s dynamics and establish your company’s competitive standing.⁶

Balanced Scorecard

A balanced scorecard is a fundamental tool in business planning and execution that allows you to set, achieve, and measure your goals, strategies, and initiatives. The scorecard was originally created because many companies had the habit of basing their strategic objectives on their financial performance alone instead of factoring in several different KPIs. It looks at four main areas when creating a business strategy:⁷

• Financial: Are you meeting your financial targets?
• Customers and stakeholders: Are your customers still enjoying your product, and are you still creating value for stakeholders?
• Internal business process: Is your company working efficiently, focusing on quality?
• Learning and growth: Are you providing a space for development in human capital, technology, and culture?

VMOST

Standing for Vision, Mission, Objectives, Strategies, and Tactics, you can use this tool to ensure that all business activities are aligned with your core vision. It helps to offer clarity and keep the focus of all stakeholders on the future direction of the company. After all, while your business might be hitting all your targets, you could be wasting time and effort if those outcomes aren’t aligned with your plans. The framework supports you in establishing where you see your company heading, what steps to take to carry out your vision, what your quantified goals are, what needs to be done on a higher level to achieve them, and what specific actions you should take to execute your plans.⁸

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Steps to creating a business strategy

Now that you’ve identified internal and external factors influencing your organization and have decided on clear objectives, it’s time to create your strategic business plan. 

There are six main steps you need to take when developing this document:

1. Analyze where you stand

Using the questions and frameworks above, conduct a self-assessment to review your past and current performance. Be honest about where you stand in your market, and try to identify growth opportunities. Conduct internal and external audits to fully understand the marketplace, your strengths and weaknesses, and the competitive environment you’re operating in.⁹

2. Create a vision statement

A vision statement outlines the future direction of the business. This should ideally tie in with the company’s values and purpose – in fact, more and more top-performing organizations now recognize how critical purpose is to achieving success.¹⁰ The vision statement lays out the overall aim of your company and details what it wants to achieve in the long term.¹¹ This could range from product development to becoming a disruptor in your industry. 

3. Develop a mission statement

This statement focuses on the company’s what, who, and why. It outlines why a business exists (its primary function), what it does, who it aims to serve, how it creates value, and broadly speaking, its path to fulfilling its vision. In doing so, it helps to make the vision statement more tangible.¹²

4. Highlight strategic objectives

Set high-level short-term, medium-term, and long-term objectives and priorities for all business areas that can serve as milestones to hit on the path toward your vision.¹³ Make sure that each objective is SMART (Specific, Measurable, Attainable, Relevant, and Timely),¹⁴ and consider factors such as budget requirements, KPIs, and resource allocation.

5. Make tactical plans

Translate your strategic objectives into more detailed short-term action plans for each business department. This will help you fulfill your strategy by laying out the operational details for how the work should be done so that all team members understand their roles.¹⁵

6. Review and measure

Strategic planning is an ongoing process that requires constant reassessment.¹⁶ It’s crucial to review your strategic business plan regularly to ensure your tactics are still relevant and that you’re still on track to reaching your goals within time and budget constraints.¹⁷ Check that those in charge are measuring the success of every tactic their teams use to ensure you’re moving in the right direction. 

Developing a good business strategy takes many hours of analysis and groundwork that shouldn’t be overlooked. It also requires sound strategic planning skills and a commitment to developing such competencies where they’re lacking. An online short course can be invaluable in this regard, helping to equip you with skills that you can apply immediately in any field to improve performance in your current role. With the right training, you can add value in a changing business landscape, safeguard your business against disruption, and effectively guide your team and company forward while delivering strategic impact. 

To help you in your quest to create a robust strategic plan, we’ve created a basic business strategy template for you to complete.

Download the template and let us walk you through the process of developing a comprehensive strategy document. One click and you’ll be on your way to setting your company off in the right direction. 

[DOWNLOAD BUSINESS STRATEGY TEMPLATE]