Strategy development, also known as strategic planning, is fundamental to creating and running a business. Simply put, it’s a game plan that sets specific goals and objectives but like a game plan, it is capable of being changed in response to shifting market dynamics.
Set Long-term Goals and Share Them
Where do you want your company to be in five years? You might have objectives, such as an expanded product line up, growth plans, sales and revenue goals, profit targets and human resource plans, as well as broader brush goals. A company's goals are meant to be shared, so that everyone involved understands and works toward the same planned path to success; don't keep them to yourself.
Conduct a Market and Competitive Analysis
You need to understand your target market’s dynamics, which can include demographics and the characteristics of your target audience (how, when and where do they buy the product or service you offer). In addition, analyze your competitors, gathering information on the 4P’s of marketing: pricing, product, promotion and placement. Know what you’re up against so you can plan your market and competitive strategy.
Assess Your Company's Direction and Threats
By detailing exactly where your company stands on current profits and revenues, you can decide how to get where you’re going. Consider seemingly minor money-making details: Are you networking with your target audience and other professionals, asking for referrals, advertising or sponsoring events to maximize every dollar?
Do a SWOT analysis – Strengths, Weaknesses, Opportunities and Threats. This enables you to honestly evaluate your firm’s strengths and weaknesses based on the market data you’ve gathered. You also will be forced to evaluate opportunities and threats.
Decide Where You Want to Be in Five Years
How big is the gap between where you are now, and where you want to be in five years? An important part of strategy development is determining what steps need to or would need be taken to enable you to bridge this gap given what you’ve evaluated in your SWOT analysis. If the gap is too big, it's wise to review and possibly reset your strategic goals.
Map Out Your Strategic Plan in Writing
Putting your plan on paper gives you something (numbers, goals) to strive for. Start by mapping out your strategic plan in writing monthly for the first year, then quarterly, and finally annually for the later years. You should meet regularly with your stakeholders, management team and employees, to review how you’re actually doing versus the goals in your plan, and to assign tasks at all employed levels, so that everybody is working towards the plan.
The market changes constantly, with new competition coming in, prices shifting and global economics impacting things, for starters. Your strategic plan should be reviewed at least once a year, preferably every six months, so you can update your game plan as new information becomes available.