Strategic statement
| Strategic statement |
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The strategic statement is a short version of a company's core strategy which articulates competitive advantages, objectives and defines scope. Those three aspects of business are crucial for strategy. Every company sets long term strategic goals and the direction for board policy. Strategic statement helps people that work for company to go into right direction during next years and to better understand and execute their roles.
Hierarchy of company strategic Statement:
- Mission, why the company exists
- Values, what to belief and hot to behave
- Vision, company's aim
- Strategy, plan to achieve it
- Balanced scorecard, how to monitor and implement the plan
Main elements of a strategic statement
Strategic statement is build based on three basic elements [1]:
- objective describes the goal that should be achieved in given time frame
- scope the part of business landscape in which company will operate
- competitive advantage is the nature of company strategy, It defines approach to do thins differently and better than competition
It is crucial for strategy to set those elements, this also requires to find right middle ground. If company aims to growth then profit is no longer a priority objective.
Strategic's Objective The strategic objective is one-fold concrete that will lead company in the near future. Strategic objective shouldn't be confused with values, vision or mission those elements shouldn't be use as strategic goals. Objective should be strict, limited by time and possible to be measured. Strategic objective should be only one but its possible to set secondary goals that are coming from it.
Scope Company scope has three dimensions:
- to whom addressing product, target group of consumers,
- where to address it, geographic location
- product
It is necessary to create boudoirs in every area it will help identify on which activities company should focus. There should be always space for indicatives and experimental projects outside of selected area, although it should point direction and highlight were business shouldn't go. It will secure company from wasting the budget on the things that are not going in line with company's strategy[2].
Competitive advantage This is the most important element of company’ strategy statement, It shows the mechanism what needs to be accomplished to succeed against competition. In order to defined it properly company should focus on be present value proposition[3], It has to be deeply analyzed why customers should purchase company's product, all difference between competition and own product should be highlighted. The most common standard value disciplines are: customer intimacy, operational excellence and product leadership.
Shaping strategic statement
Starting point for strategic statement should be making a product strategy, taking into consideration analysis of industry background. Essence of the company strategy should be included into strategic statement, created file should be easily understood by everyone in the company. During the process people from all levels should be involved.The work should be detailed but also brief and reflects three crucial elements.
Examples of Strategic statement
- Amazon: “To be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
- Apple: “Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.”
- Google: “Google's mission is to organize the world's information and make it universally accessible and useful.”
- McDonalds: “McDonald's brand mission is to be our customers' favorite place and way to eat and drink. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion.”
- Microsoft: “At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential.”
Advantages of Strategic statement
A strategic statement is a powerful tool that can help companies reach their goals and stay competitive in the market. It provides a concise overview of the company's objectives, competitive advantages, and scope of business. This one-sentence statement can be used to guide the company's employees and help them better understand their roles and objectives. Here are some of the advantages of having a strategic statement:
- It helps to define the company's long-term goals and direction, setting a clear path for the organization to follow.
- It allows the company to focus its resources and energy on the most important objectives.
- It also helps to create a shared vision among employees, making it easier to align individual goals with the organization's goals.
- It serves as a reminder of the direction the company is headed, helping to keep employees on track and motivated.
- It can help to foster a culture of collaboration and innovation, as everyone is working towards the same goal.
Limitations of Strategic statement
The strategic statement is a powerful tool for companies to understand and execute their goals and objectives, however, it is not without its limitations. The following are some of the most common limitations of a strategic statement:
- It is often difficult to make sure every key stakeholder is taken into account in the strategic statement. There is always the risk that a certain group's interests may be overlooked or not given enough weight.
- The strategic statement often lacks specific actionable instructions on how to achieve the goals it sets out. It is up to the individual departments of the company to interpret the statement and come up with their own plans to meet the goals outlined.
- The strategic statement is typically set years in advance, which means that it can quickly become outdated if the business environment changes significantly. Companies need to constantly review and update their strategic statements to stay competitive in the changing environment.
- The strategic statement is only as good as the people that execute it. If the employees and managers do not have the skills and resources needed to carry out the goals, then the statement will be largely ineffective.
To complement the strategic statement, there are other approaches to defining a company’s strategy, such as:
- Mission Statement - a short statement that defines a company's purpose and goals. It is used to provide guidance and direction to employees so that they understand their roles and how they contribute to the success of the business.
- Vision Statement - a long-term view of what the company wants to achieve. It is used to inspire and motivate employees, as well as to chart the company’s future direction.
- Core Values - a set of values that the company believes in and follows. They are used to shape the culture of the business and to provide a unifying force.
- Strategic Objectives - specific, measurable goals that the company wants to achieve. These are used to define the direction of the business and to provide a roadmap for success.
In summary, a strategic statement is an important tool in defining a company's core strategy, but it is just one of many approaches that can be used to define the direction and goals of the business.
Footnotes
References
- Barton S. L. (2010) Strategic Management Simplified: What Every Manager Needs to Know About Strategy and How to Manage it Universe, 21 sty 2010 - 188
- Blank, S.G. (2005), Four Steps to the Epiphany "Cafepress"
- Collis, D.J., Rukstad, M.G. (2008) You Say What Your Strategy Is? "Harvard Business Review", 1-10.
- Macintosh R., Donald M., (2015), Strategic Management: strategists at work "Palgrave", 978-1-137-03544-8
- Marsd D. (2012), Strategy statement: Articulating your competitive advantage, objectives and scope,"MaRS Library"
- Treacy M.,Wiersema F., (2006) Customer Intimacy and Other Value Disciplines "Harvard Business Review", 2/9/2006
Author: Bartosz Aleksander
