The most successful strategies are those that consistently add value and are supported throughout the organization. The strategy needs to be consistent with the organization’s mission and compatible with both the internal and external environment. Value adding activities consists of those operations that are consistent with the organization’s value chain. For example improvements in competitive advantage have an acceptable risk factor, are flexible enough to cope with turbulence and are able to be measured.
The strategy needs to have the support of the organization and its members to ensure its success. Gaining support for a strategy is often dependent on the level of resource availability and support from key managers. In order to gain this support it is important that the strategies are explicit and communicated throughout the organization. Once this has been achieved it is important to provide motivation for its success. Strategies that are extreme at either level of the continuum are not likely to be supported. Another important issue is that of ensuring that employee belief systems are compatible with strategies.
Yet many business owners stumble when it comes to culling a single business strategy from a short list of attractive strategic options. In reality, there are probably multiple strategies capable of delivering similar outcomes for your business. Since indecision isn’t an option, you’ll need to step up to the plate and choose the best business strategy alternative for your company. Here’s how to do it . . .
- Competitive Awareness. The first step in selecting a business strategy is to evaluate the strategies currently employed by rivals in the marketplace. There may be a valid reason why the rest of the industry has adopted a specific business strategy. Then again, it might also be an opportunity to gain a competitive advantage by taking a slightly different approach.
- Ease of execution. Do your current resources and labor assets lend themselves to a smooth implementation process? Business strategies sometimes look good on paper but quickly lose their luster because the business owner underestimated the execution requirements.
- Long-term outlook. A business strategy that delivers short-term results may not be the best option. Rather than focusing exclusively on short-term outcomes, you may want to choose a strategy that positions your business for sustained, long-term growth.
- Employee buy-in. Employee buy-in is an important consideration in business strategy selection. In order for your strategy to succeed, it will need to implemented and executed by your workforce. When the workforce feels personally invested in the strategy selection process, they become incentivized to see it through to completion.
- Strategy blending. It’s perfectly acceptable to combine the strengths of several viable business strategies into a single, blended business strategy. Although conflicts sometimes preclude blending, many business owners ultimately create a hybrid strategy comprised of elements culled from the most promising business strategy alternatives.
Strategic Alternatives – Risk vs. Return
Every strategy that is implemented by a business would include both risks and rewards. We can then evaluate strategic alternatives through comparing them.
Every strategic implementation in a business always encounters uncertainties along the way. It is often thought that the greater the risk, the higher the return. However, this is not always the case. We can try to maximise return by minimizing the risk. This is how it should be in business. When too much risk is involved, it also signifies ignorance of many contributing factors, which is counterproductive. The bottom-line is to always approach each strategy with care and calculation. We must also establish the viability of the strategy that needs to be implemented. Strategies that face too much impediments in must be excluded, with focus on objectives that need to be achieved for the success of the business.
According to Wilson & Gilligan (1998), objectives that were achieved signify that the company made the right decisions and thus, was able to overcome the risks involved. Wilson & Gilligan (1998) also stated that good decisions are arrived by considering what the future may hold in store. Wilson& Gilligan provide an outline the four views of the future:
Ignorance – IT is where an organization sees the future as blank. When this happens, it is best to avoid making decisions until more information is at hand.
Assumed certainty – IT is where an organization has a known and viable outcome in the future, based on the important information it had utilise to make at an accurate decision;
Risk – IT is where the future outcomes are not very clear but are still workable based on assumed probabilities to work with;
Uncertainty – IT is where outcomes cannot be ascertained. (SIT, 2010)
Based on the above, the returns can be dependent on these four views. Returns relate to profit, market share and consumer awareness. When choosing and implementing a strategy, we must weigh the risks, based on the information at hand in order to make the right decisions that would result to better returns for the business. Otherwise, we must choose another strategy that can encourage certainties that are more positive.