Importance of Business Strategy

Importance of Business Strategy

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Importance of Business Strategy

Business strategy helps an organization optimize its internal capabilities by addressing its weaknesses and leveraging its strengths. Business strategy enables the respective organization to asses its internal mechanisms and gauge their performance relative to their set trajectory. Similarly, it enables the firm to measure the company’s performance relative to their primary competitors. It follows that the organization can pinpoint their deficits and work towards correcting them. Business strategy helps organizations rectify present weaknesses; anticipate future risks, and optimal utilization of present resources.

Secondly, business strategy increases a firm’s awareness of the changes in the external environment. The organization identifies changes in trends and their implications for the firm’s future. The changes may range from technological innovations to consumer behavior. The firm is able to adjust its functions to leverage the present opportunities simultaneously neutralize the threats towards promoting sustainability (Agrawal, 154). Devoid of the above awareness, the firm may sink into oblivion as most of its functions may become redundant. Business strategy allows the given organization to thrive regardless the changing times by positioning itself effectively in the volatile market. The firm is able to develop appropriate tactics that will integrate the firm relative to the said changes.

Business strategy is essential in giving a firm direction. It facilitates harmonization of the organization’s functions towards a common objective. Business strategy strives to familiarize every employee with the firm’s purpose subsequently, integrating them into the organization’s mission and vision. The above concerted efforts increase productivity by enhancing coordination and mitigating redundancy of roles. Business strategy ensures that the firm’s resources and time are utilized effectively by being allocated to the intended goals. It is through business strategy that a firm recognizes their competitive advantage and tries to exploit it towards achieving its purpose.

Reference

Agrawal, H. O. (2016). An Approach to Business Strategy. Handbook of Research on Promotional Strategies and Consumer Influence in the Service Sector, 154.