Creating a strategic plan is crucial regardless of the size of the organization. So we can definitely understand that strategy actually optimizes the organization for an increase in revenue and hence an increase in overall profits. One of the tasks assigned to the strategy department is to ensure price competitiveness while keeping an eye on margins. There is one hiccup here though. Let us know what you think of these five reasons strategy is important and share with us some of your own experiences. When we are trying to cater to our customers, there are numerous gaps which can arise from time to time. The good thing about this is, that it aligns the complete organization with one objective. 2. While most companies should collect such inputs periodically, the input collected when your future is at stake has a very high value because you will ask the right questions and you will actually analyse the data in depth. Too often annual operating plans are created from the rear view mirror. Required fields are marked *, Copyright © 2020 Marketing91 All Rights Reserved. After working with over 200 clients on a wide range of strategy management projects, we have confirmed that there are a multitude of benefits to having and working a strategy in organizations. In today’s day and age, looking forward and designing a strong strategy is the only way that certain companies can overtake their competition. The importance of strategy is manifold but the most important aspect is competitive advantage. Because strategy keeps analysing the current performance of the firm, it also carries out gap analysis. It takes time, resources, and distracts from the urgency of running the day-to-day business. With the future strategy in mind, these communications can be optimized for long term impact. Obviously you are not worried because you are a well planned guy. A good strategy helps yo create a foundation for ensuring growth and success. Through strategic planning, companies can anticipate certain unfavourable scenarios before they happen and take necessary precautions to avoid them. Today we would totally disagree. 4. You might filter the communication and you might give only selected information to the bottom most levels. This is not to say that leaders are not in tune with their customers, or not aware of their competition. However, without a clear picture of what you want the future to look like, it will always be more reactive than proactive. A document which is most important to your business or to your organization is the Marketing plan. Skills & Knowledge – If you know where you want to take your business over the long term, you will … Many companies advertise because they see a fantastic improvement in their brand acceptance in the market once they actively start promoting and advertising their products. Posted in Newsletter, Strategy Development, Strategy Execution, Strategy Management. If you can take the emotion out of your decision-making process, you’ll have a business and a team that is more focused, more productive, and more profitable. While you have to be prepared for the short term tactics, the main job of Strategy is to prepare you for a 3 year or 5 year or even a 10-20 year plan in some cases. Besides doing that, Marketing strategy actually tightens up the complete process and operations of the organization, thereby contributing to a possibly increased profit and an increase revenue. Strategy always has an eye on the future and it guides the organization in moving forward in a planned manner. You also know where you want to go. Here are five reasons why strategy plays such an important part of any company’s success. It also helps the decision making of each individual and even departments and groups collectively because they know what the organization wants from them. Both, products and markets are dynamic in nature. These innovations are possible only because the company which has invested time in it has looked at the possible futures and feels that such innovative products are well aligned with the direction the company is taking. This input might be from various internal customers like stockholders, distributors, dealers or others. 5. Building specific business strategies is an absolute necessity to increase the odds of success. To move toward a goal, an organization needs the ability to visualize that goal … When you are making your strategy, you look at where you are standing in the market currently and you plan down the line. It literally tells you how to rank your competitors one by one and then overtake them on your ladder to success. Provides solid guidance for creating clear, simple and understandable plans that are well structured … Strengths and Weaknesses – At first glance this seems too obvious and you are saying to yourself, “Of course we know what our strengths and weaknesses are!” We cannot disagree. All this is done AFTER the product placement in the store. What is the Importance of strategy to a Business or an Organization? Strategy is about making choices. The importance of strategy lies in the fact that it GETS you to plan long term. What is Midlife Crisis and How to Deal with it? And both of them have been sustainable and competitive because they have kept looking forward and kept planning their strategy. The same things apply to a company or a business. Skills & Knowledge – If you know where you want to take your business over the long term, you will have a much better idea of the kinds of capabilities you will need to achieve your goals. It also becomes easier to choose the marketing vehicles to carry the message. When we first started strategic planning work over 20 years ago, a client and good friend said that succeeding in strategy management is hard work. These resources might be people, equipment or any other thing which is redundant. It will not know its own position in the market as compared to its competitor and hence, the firm will not be able to derive a competitive advantage. Sharp Future Vision. What products, services and markets will be a part of the future and what we should not do? Because of marketing strategy, you are able to stay ahead of your competitors or at least you are able to beat the competitors who are below you in market standing. When you plan for so many years down the line, you become creative and also you stand on the toes of your feet because your competitors don’t look so strong 10 years down the line nor will you be insecure about your business. 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