In a competitive business environment, building and applying effective strategies is a key factor for businesses to survive and develop. So what is strategy? What are the characteristics and roles of strategy in an enterprise? This article will provide an overview of the concept of strategy, its outstanding features as well as its importance in orienting and promoting the sustainable development of businesses.

1. Overview of strategy and related concepts

To achieve success, businesses need to master the concept of strategy and related factors. In this section, we will explore an overview of strategy, basic concepts and the important role of strategy in shaping the direction and development of a business.

1.1 What is strategy?

Strategy is decisions about long-term goals and the means to achieve them. Strategy links tactics to achieve the ultimate goal.

For example, when having a car, the owner can use it for different purposes:

• Improved travel experience
• Increase salary
• Increase social relationships
• ….

For each of these purposes, the owner must meet different skills. If increasing income is the ultimate goal, car owners need to strategize using specific tactics such as registering a service vehicle, learning a driver's license, learning how to use technology vehicle applications, etc. .

1.2 What is strategic management?

Strategic management is the process of organizing and managing activities to achieve long-term business goals, including optimizing profits, increasing market share and building brand value. At the same time, strategic management also responds promptly to market fluctuations and external factors such as society and culture.

1.3 What is strategic planning?

Strategic planning is the process of research, analysis and planning to guide a business toward its ultimate goal. A detailed strategy provides consistency in execution while still ensuring flexibility when adjustments are needed to suit changing markets. Contents that need to be planned include products, customers, pricing strategies and distribution channels.

2. The importance of strategy in business

From understanding what strategy is, it can be said that this is an important key for long-term business growth and development:

• Direction: Strategy provides clear direction and direction for the business with specific goals and consequences if those goals are not achieved. From there, employees can understand their responsibilities and have more motivation to complete their goals.
• Efficiency: Implementing strategy requires all employees to work towards a common goal and requires leadership to build an effective operating roadmap, optimize resources as well as create a positive, productive working environment. financial and production benefits.
• Proactive: By coming up with a strategy, businesses can become more proactive, solve problems quickly and respond to changing market trends.
• Sustainability: Applying a consistent strategy helps businesses stabilize and develop sustainably in a competitive and volatile market.

3. Formula for successful strategic planning

Strategy is an overall plan to achieve goals, determined by the formula:

Strategy = Goal + Resources + Means

• Objectives: Project objectives must be realistic, clear, specific and measurable. For example, a business aims to digitally transform management in 2 years.
• Resources: The factors an organization uses to achieve its goals include finance, human resources, technology, information, and physical resources. For example, businesses have large budgets, highly skilled employees, and modern infrastructure.
• Means: Tools, methods, techniques and processes for mobilizing resources to achieve goals. For example, businesses use 1C:ERP solution for resource planning and comprehensive business management.

4. Steps to building a breakthrough strategy

A systematic strategy building process not only helps clearly define goals and directions but also creates a solid foundation for businesses to break through current limits and achieve new successes.

4.1 Step 1: Set goals

Before building a strategy, it is necessary to determine long-term goals based on the actual situation. Businesses often aim for revenue, profits, market share or reinvestment. Strategic goals are the standards for evaluating development throughout the process.

4.2 Step 2: Assess the actual situation

To build an effective strategy, managers need to evaluate two main contents:

• Business environment: Research economics, technology, politics, society and law to identify opportunities and risks. This helps administrators understand the operating context and come up with appropriate strategies for the business.
• Enterprise internal resources: Assess strengths and weaknesses in management, marketing, R&D, finance and human resources. This helps improve and maximize internal potential.

4.3 Step 3: Build strategy

After determining goals and evaluating the situation, businesses move to the strategic selection stage. A good strategy answers three key questions:

• What is the goal to achieve?
• Who are the competitors and what are their strengths?
• What is my competitive advantage and how do I compete?

4.4 Step 4: Implementation

In the process of preparing and implementing the strategy, there are two important stages that are closely related:

• Organizational phase: Focuses on organizing and consolidating resources, both inside and outside the business.
• Policy phase: Develop more detailed policies to promote implementation of the proposed strategy.

4.5 Step 5: Measure results and adjust

At this stage, administrators need to determine whether the strategy is consistent with the company's initial criteria and goals. This helps evaluate the progress and effectiveness of the strategy, and control the desired direction of the business.

5. 5 Factors that determine the success of the strategy

Strategy plays an important role in different fields. To be successful, strategy needs to meet factors that are consistent with the company's overall goals, so what are those factors?

• Purpose: Determining the purpose when creating a strategy helps businesses find a path to development and focus resources to achieve their goals.
• Strategic scope: Determining the strategic scope helps businesses choose customers and market segments suitable for products and services.
• Customer value: Identify the needs and values that customers want from products and services to propose strategies to best meet those needs.
• Operational system factors: Conveying the value and benefits of products and services is an important factor in increasing revenue. Businesses should propose strategies to strengthen cooperation between Marketing and customer care to create a value chain and increase customer reliability.
• Competency factor: Each business has its own core values. Identifying this strength when building a strategy helps find a favorable development path and enhance its position in the market, while also orienting the goal of sustainable development.

6. Strategic levels in an enterprise

In businesses, different levels of leadership have their own strategic directions and questions. Includes 3 main strategic levels, each level needs to answer big questions:

7. Distinguish between strategy and tactics

Even in the concept of what strategy is, we can see that strategy is often linked to tactics. However, these two concepts differ in how they plan actions. As follows:

Both strategy and tactics are important in management and leadership, and are often combined to deliver optimal results in business operations.

8. Companies have successful business strategies

One of the best ways to learn about business strategy is to study real-life examples. Here are three companies that have overcome many challenges thanks to excellent business strategies:

1 - Best Buy

Best Buy, a multinational electronics retail company, has overcome competition from Amazon and retailers such as Walmart and Home Depot with a unique strategy. Instead of closing or developing new products, Best Buy repurposed store space to provide faster pickup services and ready-made items, increasing customer convenience.

2 - Nike

Nike is a leading global sports brand, notable for its iconic products and effective business strategy. Leveraging customer awareness to increase product value, Nike successfully builds customer loyalty, which is an important strategy for the brand's sustainable success.

3 - Starbucks

Starbucks, which owns the world's largest coffee shop chain, faced severe financial pressure in 2008 due to fierce competition and rising raw material prices. Profits dropped nearly 28%, leading to the closure of 300 stores and layoffs of 6,700 employees. To solve this problem, CEO Howard Schultz restructured his strategy, focusing on customers and re-establishing strong relationships with them.

9. Build an overall business strategy with 1C:ERP solution

1C:ERP is a comprehensive resource management solution, supporting businesses in building overall business strategies. Developed and deployed by more than 200 partners across 30 countries, 1C:ERP delivers outstanding efficiency thanks to advanced technology and rich experience from global businesses.

This solution allows businesses to comprehensively manage planning, budgeting, customer management, sales, purchasing, warehousing, production, finance and long-term assets on the same unified platform. . From there, it will be easier for administrators to come up with effective strategies.

• Flexible Customization: Open logic system, easy to customize according to specific business requirements and integrate with other solutions.
• Accounting Standards: Supports Vietnamese (VAS) and international (IFRS) accounting standards, suitable for both multinational companies.
• Cross-Platform Compatibility: Compatible with most popular database management software, operating systems and browsers.
• Improve Management Efficiency: Improve work processes, eliminate manual operations, provide a real-time reporting system to improve product and service quality.
• Security and Commitment: Encrypt data, strictly decentralize and record user operation history, ensuring transparency and information security.
• Cost Optimization: Optimize operating costs, easily control performance goals (KPI), and effectively improve investment value.
• Quickly Plan: Support businesses to quickly plan and control operational goals to achieve financial goals.

Understanding clearly what strategy is, its characteristics and roles in a business is a key factor in making the right decisions and building a suitable development roadmap. By applying flexible strategies as well as applying advanced technology, businesses can optimize operational efficiency, enhance competitiveness and achieve outstanding success. Let 1C Vietnam accompany businesses on the journey to building an effective and solid business strategy.