Writing a Strategy Statement
Before starting a business or forming an organization, one must first identify and solidify its goals and objectives. Without these, your business or organization won’t have the proper reasons to function. It won’t have the direction and guidance it needs to prosper. Success for a business or organization is a matter of good guidance and following the direction it has from the beginning.
A strategy statement outlines the specific strategic actions of a company. It gives the sense of direction for the company and serves as the blueprint of the company’s movement for years to come. It also sets the company’s long-term strategic plan.
Aside from that, it relays the company’s strategy at the grass root level and helps the management and employees perform their responsibilities in accordance with the guidance of the strategy statement. A strategy statement usually appears at the beginning of a business plan and usually follows the mission and vision statements of the company.
Components of a Strategy Statement
As it is a direct reflection of the business’ strategic plan, a strategy statement is usually made up of three components: the objective, scope, and competitive advantage.
Objective
You must be able to define the objective of your company. The objective is the single main goal or purpose that the business tries to achieve. It should not be confused with the business’ mission, vision or values as these three are not as useful as the strategic objective. The objective must be specific, quantifiable and has a time restriction.
For startups, your market strategy depends on the type of market you plan to enter.
- Entering an existing market
- If you enter a new market, you need to maximize your market share between your competition. To measure that objective you must determine revenue relevant to your objective market share, break it down by number or transaction and break down the rest of your sales to calculate how many leads, prospects and proposals would be needed with your revenue target.
- Entering a new market
- The first year objectives of your business will differ and it should not be revenue-oriented. You should focus on the enlightening potential customers about your vision and turning them into reference customers.
In general, these measurements will indicate whether the market has actively responded to your business. Also, see 9 Examples of Objective Statements & Samples
Scope
You must be able to precisely define the scope of your business. A company’s scope usually revolves around three dimensions– the target costumers, location, and the product. Clearly defining the boundaries for each dimension will determine the areas to concentrate on.
However, the scope does not determine the actions to be taken within the boundaries, you can always experiment and initiate actions that can test out your strategies. The scope must emphasize where the business’ direction and focus will not go. That will prevent you from wasting time and resources. You may also refer to 8 Scope Statement Examples & Samples
Competitive Advantage
This component describes your strategies on how and why you will succeed and what makes you different from your competitors. To define competitive advantage you must:
- State the value and benefits the customer can acquire from your business. Explain why customers should spend money on your products and/or services (i.e. what make your products and/or services worth it?). Compare and assess your value proposition against competitors to determine your distinctiveness.
- Outline your strategies for delivering premium quality products and/or services to your customers. Describe the activities that allow your business to bring value proposition to your customers.
- Create a business model that connects your actions and strategies to your competitive advantage.
Developing a Strategy Statement
In order to develop an effective strategy statement, you must first create a product strategy based on the industry landscape and base your strategy statement on it. It should capture the product strategy’s essence but at the same time, people will still be able to understand.
Second, your strategy statement should be a combination of effort from all employees of the business. This is to ensure different aspects and levels of the company can be heard and be involved in the making of the statement. The details you include in your statement should not only come from the upper levels of the business but in the lower levels as well. Also, see Everything You Need to Know About Brand Strategy
Your final strategy statement should be a brief statement reflecting the three main components such as the business’ objectives, scope, and competitive advantage. It must be a statement easily understandable by the employees and everyone in the company. However, you can also still include some notes to clarify issues and implications.
Another efficient way of developing a strategy statement is to answer three specific questions: who are you, what do you deliver, and why do you do it? These three questions are essentially what should be indicated in your statement. These will guide you in your brainstorming process. You may also see Importance of Business Plan
Strategy Statement Example
Takeaways
- In order to develop an effective strategy statement, you must first thoroughly examine and learn your business’ strategic plans. This will enable you to relate and unify your strategy statement with your strategic plan.
- You strategy statement should not be confused with the company’s mission and vision statements. Your strategy statement should be more concrete, practical and unique than the mission and vision.
- Remember that your strategy statement relays the goals and objectives to investors in order to convince them that your business has what it takes to succeed.
- It should be able to clearly explain why the customers should and will choose your company over your competitors.
- The information reflected in your strategy statement should be able to outline the initiatives that give your business an edge in succeeding compared to other similar business who have failed to do so.
- You strategy statement will surely impact your business. Reports suggest that the failure to develop an effective statement and the failure to successfully implement one is a major cause of the business’ closure.
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