The Importance of Business Strategy

This assignment delves into the significance of business strategy in ensuring operational success. It emphasizes how strategies provide a roadmap to achieve desired goals, adapt to changing market conditions, and navigate increasing competition. The study also highlights challenges like ineffective leadership and employee resistance during strategy implementation. Effective tools and techniques are crucial for successful strategy execution.

Business Management and strategic
management

INTRODUCTION
The strategy can be defined as systematic planning procedure which is designed to
attain overall objectives of business by considering internal as well as external environmental
factors. Strategies are highly significant for business as it assists in efficient planning and
executing business activities to achieve desired goals (Walker and Madsen, 2016). The
present study is based on the description of the strategy and its importance for business and
non-profit organizations. The study will include challenges faced by managerial parties in
implementation and development of strategy by considering relevant examples. In addition to
this, the study will also include the relevance of strategy in present competitive environment.
MAIN BODY
Strategy
The strategy is path followed by the organization to achieve their goals and
advantages over a long term. Strategy management is done through allocating resources in
such a way that fulfil the needs of customers, mould business process with the changing
environment and meet the expectations of stakeholders. In other words, it can be cited as,
considering the direction in which where the organization must go in order to attain
competitive advantage (Priem, Wenzel and Koch, 2017). It is the approach of assessing the
scope of the market by which company will get to know the competitiveness and activities
involved in those markets. The effective strategy ensures that business is performing its best
in the market and determine activities and resources that are essential to meet the goals and
attain advantages by considering the internal and external factors that will directly impact the
business.
Strategies are used at different stages of an organization as the existence of the same
is important for all operational activities the business varying on the basis of management or
a business group to individuals functioning in it (Morden, 2016). Different type of strategies
is enumerated as below:
Corporate strategy: This strategy concerns the total scope and aim of the firm in order to
meet the expectations of stakeholders. It is a significant stage as it thoroughly influenced by
business investors and guides to maintain strategic decisions within the organization
(Verbeke, 2013). Corporate strategy is frequently acknowledged as a mission statement.

Business unit strategy: This strategy is concerned with the competitive advantages in a
specific marketplace (Peteraf, Gamble and Thompson Jr, 2014). It assesses strategy decision
making regarding customer satisfaction, competitive advantages, products, driving
opportunities etc.
Operational strategy: It is concerned with the organizing of business activities in such a way
to serve the business-unit level strategic direction. Thus, this strategy concerns on issues
regarding individuals, resources and processes etc.
Importance of strategy in businesses and not-for-profit organizations
Business entities
With the changing business environment, from stable to the competitive environment,
the strategy is considered to be a vital part of attaining objectives of business set by mission
and vision of business entities. Strategy plays an important role in business success as there
are several reasons why strategy must be implemented. Firstly, there must be proper planning
in business, and effective strategy provides actions and directing plan, it introduces a clear,
precise and sound way for the same (Chen and Jermias, 2014). The strategy is inclusive of
proper direction for an organization to create a road map that how goals will be achieved with
a comprehensive action plan. Creating and following progress beside yearly working plan is
considered as a significant management tool. The company must concern the past experience
and make planning according to them in order to prevent the mistakes happened in the past
few years.
Subsequently, many types of research provided several concepts regarding strategic
management in order to efficiently making use of firm’s resources to achieve their goals and
objectives. Strategy refers to an integrated and complete plan intended to guarantee
achievement of business objectives (Albeladi and et al., 2014). Strategy assists in organizing
functions and merging them properly so as to attain competitive edge through value adding in
activities to satisfy ultimate users of products provided by business entities and to attain the
business goals of the mission and vision.
Not for profit organizations
Strategic planning enables NPO to use their human resources as well as financial
resources carefully and effectively. Furthered decisions related to expenses and costs are
based considerably on judgments regarding the impact they impose on improvement in

services (Omar and et.al, 2014). Nonprofit organization are mostly requested to give a
strategic plan in order to enlarge charity and public welfare plans to justify funds provided by
donors, alike to how business entities represent their strategies to justify capital sources of the
venture (Bharadwaj and et al., 2013). The strategic plan work as a guide to NPO’s group of
management while ensuring that team members are also putting their efforts to achieve the
same goals along with the same precedence.
Challenges faced by managerial parties in implementation and development of strategy
Strategies provide various benefits to business, but development and implementation of
strategy in operational activities are not an easy task. For this aspect, the company has to face
issues such as ineffective leadership and employee resistance (Kotler, Berger and Bickhoff,
2016). Strategic implementation starts with deciding on goals, prioritizing objectives and
allocation of resources but above all it requires a leader or a manager who is familiar with
systems and processes so they can develop and implement effective strategies (Madsen,
2016). They must be able to communicate effectively, motivate and encourage his team,
delegate authority and monitor execution.
Strategic implementation requires a lot of planning in alignment with mission or
vision, sense of urgency and effective leadership. The responsibility of leader doesn’t stop
here. They need to ensure that people understand the strategy, buy into it and take decisions
and actions accordingly. Further, strategies must be measured and monitored from time to
time. The main strategies should be related to price, product and customer specific solutions
should be according to customer needs (Eden and Ackermann, 2013). Different strategies
require different styles of leadership and different organizational behaviours. The attitude of
people in the organization depends on customer proposition, behaviour of leader, processes
and structure, commitment. Effective leaders lead and manage strategy implementation by
aligning people to the organizational goals (Booth, 2015). Ineffective leadership leads to
great resistance in implementing strategies. Ineffective leaders generally do not display
courage and are also not determined to push the initiative to achieving the desired outcomes.
The strategy is properly executed when there is a balancing act among the workforce
and their commitment towards organizational development. However, implementation of the
strategy is typical due to employee resistance. It is the act of struggling or opposing the
changes, modifications in the work place. In every business change is inevitable (Peteraf,
Gamble and Thompson Jr, 2014). Leaders need to manage change with minimal disruption if

it is not handled properly there is more resistance than necessary. Resistance to change is not
a problem but what matters is how it is managed. The success of the venture is threatened by
resistance to change. It can largely affect the productivity, quality, communication, employee
commitment in a workplace.
The introduction of new strategy involves a lot of planning like managing the stages
of strategy adoption, integrating work environment, managing employee unhappiness and
resistance (Burke, 2017). Employees’ actions are to be observed like late assignments,
absenteeism, verbal criticism, remarks, missing meetings related to change, talking to them
about changes can help in spotting resistance to change.
Some employees may need help in navigating the change. The more powerful the
employee resistance, in terms of job title, position etc. the more success they will have with
their resistance. If the employees have insufficient support in gaining result the resistance to
the strategy may intensify (Bryce, 2017). Organizations having the culture of support, trust,
involved and engaged employees and positive relationships can handle implementation and
development of new strategies.
Relevance of strategy in present competitive environment
The relevance of strategies is not affected in present competitive environment as
strategic thinking is inclusive of the direction of external and internal business environment.
The elements of the external business environment such as economic and technical are
considered to be chief factors driving opportunities and threats for the business (Omar and et
al., 2014). The never ending demand of the society is again a significant factor that must be
kept in mind regarding defining the competitive strategy by considering strength and
weakness of the business entities. Thus strategies are prepared on the basis of changing
market conditions not merely as per traditional theories. In accordance with the study of
Burke (2017), planning for activities will not be successful if it is not supported by
appropriate strategy.
Further, businesses need a strategy for ways by which they are conducting experiments, as
they need to widen their direction and scope of the experiments to ensure success.
Conventionally, the main focus has been given to providing of new products and services to
the customers (Booth, 2015). However, with the increasingly unstable environment business
process also becomes quickly outdated and unpredictable. Thus, companies are required to

revive their strategies to frequently adapt changes and make use of broad experimenting prior
to their competitors.
For this aspect, an example of Ikea can be considered as the company describes the
experimenting power along with business models to their wide range of products. Companies
like Ikea holds current assets and liabilities to do experiment with the business models. After
entering in the market of Russia, managers considerably observed that each time the company
opens an outlet, the value of nearer real estate’s improved drastically (Morden, 2016).
Further, Ikea made a decision to simultaneously discover two business models which were
dealing with their stores and outlets and driving the pleasure in the values of real estates
through the development of malls. At present, it generates more revenue by developing malls
rather than from its Conventional business of retail.
Ultimately, experimenting without appropriate strategy also fundamentally generates
a failure. For example, Intuit (a software company), has become very successful initially
while adopting new approaches to develop business. In 2005, it initiated an advertising
campaign in order to get through young filers of tax by making use of website named
rockyourrefund.com (Goffin and Mitchell, 2016). The website provided discounts and
schemes at Best Buy and Expedia and attained refunds of tax in the way of prepaid vouchers.
The campaign resulted in major failure, as no one makes use of the website.
Above description shows that strategy in current competitive environment assist in the
allocation of resource regarding the selection of the type of product and services will be the
part of a portfolio of the company. An effective strategy in these decisions is used to
guarantee greatest returns. Lastly, it assists in modifying operation plans as changing internal
and external environmental factors which create a positive impact on company’s position
(Kotler, Berger and Bickhoff, 2016). It makes entities alert and prepared for possible in
market shifts and offers opportunities to take actions to implement. It is because; strategy
builds a peak level self-awareness and offers a superior focus on resources and activities
which will assist in making the business more successful. In addition to this, the strategy also
states and serves strategic decisions in designing and tracking the organization.
CONCLUSION
In accordance with the present study, conclusion can be drawn that strategies are a
vital part of business planning as it assists in the viable roadmap to achieve desired
objectives. Further, irrespective of nature of business all organizations are required to make

use of strategies to ensure their operational success. However, development and
implementation of the strategy is not an easy job as managers have to face issues such as
ineffective leadership, resistance by employees and work culture issues. Thus, businesses are
required to implement the strategy by using appropriate tools and techniques. The study also
shows that strategy is significant for entities irrespective of changing market conditions and
increasing competition.

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