As a strategy consultant I find that “Business Strategy” can be an elusive and mysterious term.
“Strategy” is often a source of confusion, not because it's inherently complex (good strategy should be simple IMHO), but because the term is used to describe a multitude of different ideas. Depending on someones approach, role and perspective they might be speaking about a number of different things when the topic of “strategy” comes up.
So. I thought to myself - why don’t I try and clear this up and set out a framework which captures all the main areas of a businesses “strategy”. I’ve found this framework helpful when speaking to executives and leadership teams because it helps to clarify different component parts of a business as it seeks to create value in exchange for customers cash.
What on earth is a “strategy” anyway?
Before we set out a framework for business strategy, it seems sensible to define what a “strategy” is in the first place.
A strategy is a high-level plan designed to achieve one or more long-term or overall goals.
It should explain what a business is intending to do. It should clearly explain a change from the status quo to a desired future.
In a business context, it involves making deliberate choices about how to allocate resources, set priorities, and take actions to reach desired outcomes. It lets everyone know what the business will be doing - and also what it will not be doing.
A well-formulated strategy provides a roadmap that guides decision-making and aligns the efforts of the organisation towards its vision and objectives.
Most businesses have a “strategy” - even if its in the CEOs mind or even if its considered the unwritten “status-quo”.
But if a business wants to change something about what its doing - if it wants to grow or improve - it will need a strategy. Leaders will need to clarify and align around what this is. Then they will need to use it to communicate and cascade it out to colleagues so that everyone can understand what they are aiming for. Progress will then be measured against it.
The format of a “strategy” can differ. I’ve seen some horrific examples - pages and pages of writing, 1000 slide decks and graphs and spreadsheets that numb the mind. In my view the best strategies are simple and can be articulated on one slide of a deck. A one page strategy. If you need more - you might have a comms issue. Or perhaps your strategy is not that worked out.
A good strategy should explain what the current context is, a compelling argument of why a change is needed and a high level vision of the future. Some of the best strategies I’ve worked on are actually written in the form of a strategic narrative. A story, which sets out whats broken with the world and why the brand is on a quest to fix it and how it will do so in a way nobody else is doing.
Key components of Business Strategy
So. with that in mind - what are the main component areas of business strategy?
Here’s the main areas I frequently come across:
Commercial Strategy
Brand Strategy
Product Strategy
Operational Strategy
People Strategy
Marketing Strategy
Sales Strategy
Customer Strategy
Lets run through each of these briefly:
Core:
Commercial Strategy
Usually the beating heart of a business is their commercial strategy - the business plan. This ensures the business is sustainable and can grow financially. It keeps the investors happy because it outlines the commercial opportunity. Typically it focuses on the economic aspects of the business, including revenue models, pricing strategies, cost management, and financial planning. It sets out the business model. It ensures that the business remains viable in the long term and has the resources to invest in future growth.
Brand Strategy
Brand strategy sits alongside the commercial strategy (brand purists would argue it should inform it) and is foundational for all other strategies. A good brand strategy should define the positioning, unique value proposition and core principles that distinguish the business and its offering in the marketplace. A well-articulated brand strategy simplifies decision-making across the organization, ensuring that every action aligns with the brand’s core identity and values. Attached to this will be a plan to ensure the brand consistently looks and sounds the same across all touchpoints. It’s about making sure that your brand resonates deeply with your target audience and stands out amid competitors. Its a long term view of where the business will play, who it will serve and how it will win.
Internal Focus:
Product Strategy
A core strategy is how a business will develop what it offers to the market. A product development strategy should be about creating ongoing value - and be based on the principles of the brand strategy. This strategy focuses on fostering a culture of innovation within the organization, encouraging creativity, and developing new products or services that meet evolving market needs - and offering which is of high value to customers and which is hard to copy by competitors. Innovation is essential for staying competitive and relevant in a rapidly changing business landscape.
Operational Strategy
An operational strategy is a plan focused on the design, execution, and management of the processes that create and deliver a company's products or services. It aims to maximise efficiency, reduce costs, and optimize the quality of output, aligning these elements with the broader business objectives. It includes the way the business manages its supplychain, IT, its people etc and it ensures everything is complient (e.g. ESG) and reported on in a useful way.
People Strategy
The people strategy focuses on attracting, developing, and inspiring employees and top talent. It’s about building a desirable workplace culture that aligns with the companies values and fosters employee engagement and productivity. This strategy covers recruitment, training, development programs, and employee retention initiatives - I usually call this a “Culture Programme”. Its essential becuase a motivated and capable workforce is crucial for executing all other strategies effectively. Its also super expensive (and disruptive) to have to keep hiring people. I often find a great internal communication plan with regular cadence, leadership updates to ensure there is a clear vision and clear company goals which everyone contributes towards is an essential component of building cultures that people care about.
External Focus:
Marketing Strategy
The Marketing Strategy is centered on attracting leads and building brand awareness, setting the stage for the sales process. This strategy encompasses all promotional activities, including digital marketing campaigns, content marketing, public relations, and advertising. It highlights how the brand will communicate to attract leads, focusing on both short-term lead generation and long-term brand building (demand generation). The marketing strategy should detail the key channels and events the business will utilize to engage potential customers, such as social media, email marketing, SEO, and more. This strategy is about crafting a compelling narrative around the brand and its offerings, enhancing the public perception, and creating an emotional connection with the audience that draws them into the sales funnel.
Sales Strategy
The Sales Strategy focuses on converting leads generated by Marketing into customers and deepening relationships with existing customers to maximize revenue and loyalty. It involves direct interactions with prospects through various sales tactics, personal selling, and customer relationship management. This strategy should outline the processes and approaches that the sales team will use to guide prospects through the sales funnel—from initial contact to making a purchase. Key elements include defining sales goals, identifying key performance indicators (KPIs), and crafting tailored sales pitches that emphasize the unique benefits of the products or services. It also involves training sales personnel to understand customer needs deeply and respond effectively, ensuring that every interaction moves a prospect closer to becoming a loyal customer.
Customer Strategy
Customer strategy is about creating experiences that delight your customers so that they come back again and again. It should encompass “Customer Success” and “Customer Experience” principles. This strategy ensures that every touchpoint with the customer is positive, reinforcing their loyalty and encouraging repeat business. It involves understanding customer needs, providing excellent customer service, and continuously improving the customer journey. A strong customer strategy turns satisfied customers into brand advocates and reduces customer churn. Its about retention.
Conclusion
Although all symbioltic I often find the ‘Commercial’ and ‘Brand’ strategy components are core to have in place for a company to have a clear direction. Together these outline the vision for the company - how it will create unique value in the market and how it will have the resources to do so. If one of these strategies is non existent or weak there is typically complications in other areas of the business. For example without a 'Brand Strategy' in play, its very hard for the Sales and Marketing team to develop compelling narratives and value propositions. Its hard for the People team to craft a compelling narrative to attract top talent.
The ‘Product’, ‘Operational’ and ‘People’ strategies are usually focused internally on how the company will deliver its offering whilst the ‘Marketing’, ‘Sales’ and ‘Customer’ strategies have an external focus on how the company will attract and retain customers.
It should be noted that although the framework outlined above serves as a guide, it should be adapted based on the unique challenges and opportunities of each business. If there is one thing I know, every business (its context, market, opportunities, financies, leaders etc) is very different. Therefore I’d encourage you to think critically about how these component parts can be customised to fit your specific context. But I hope its a helpful guide to clarify the strategic components of your business and I guess the question would be for you to consider how strong your strategy is in each.
Remember being in business is a journey. Crafting a robust strategy is not just about setting a course; it's about igniting a transformation that propels your company to new heights.
The key is to envision a future where your company not only survives but thrives - where your brand is delivering unique value to loyal customers.
Thats why, good strategy starts wiht the commercial and brand components.
After that, each component of the strategy you craft and build is a step toward improving the world, your industry, exceeding customer expectations, and creating a legacy of excellence.
So I hope this framework is a helpful guide as you lead with courage, innovate with purpose, and build with passion. The future is shaped by the bold decisions you make today. So, seize this opportunity to turn strategic visions into remarkable realities, and lead your team into a prosperous future filled with endless possibilities. And do this with clarity - one step at a time.
Happy Company and Brand building!