How to define your strategy statement, objectives, scope, and competitive advantage

How to define your strategy statement, objectives, scope, and competitive advantage

In business, a strategy statement outlines the strategic goals of a company. The message should be clear and concise and outline the company’s steps to achieve its goals. A well-written strategy statement is a powerful tool for driving growth and profitability. We introduce how to define your strategy statement, objectives, scope, and competitive advantage.

What is a strategy statement?

A strategy statement should convey your company’s strategy within the workforce. It’s essential to help teams understand their goals and roles in executing strategy. 

Without a well-defined strategy statement, you may be pulled in different directions. And you can quickly lose your focus. A bad one is even worse. Packed with pointless words you think you should include is dangerous. It will distract you, alienate some of your customers and make you prone to jump on any cool bandwagon.

The strategy statement has three major components: Objective, scope, and competitive advantage. 

Defining the objective of the Strategy Statement

The strategic objective defines the direction in which the business is to grow. However, it is nothing like the company’s values, mission, or values. 

The strategic objective is more specific, time-restricted, and measurable. It has a single goal, but subordinate goals can be derived from strategic objectives. For instance, maximising shareholder value can be a strategic objective. But management teams can derive several strategies to reach this goal. 

Stepping into an Existing Market

Suppose you are stepping into a well-established market. In that case, your goal for the first year could be to gain the maximum industry revenue. Estimated from analysing your competitors in your market. For this, you may need the following:

• Find out the total income of your niche market 
• Divide the revenue by the number of customer orders
• How many leads, prospects, and proposals are needed by reverse engineering the sales funnel

Stepping into a completely new market

When you enter a new industry, your objective first year will not be the same as before. It may not be revenue-driven, but your objectives may focus on:

• Informing potential customers regarding your portfolio, vision
• Converting the early adopters into reference customers
• How are you going to build your customer base

At the end of the year (if not before), you can cross-check if your performance matches what you thought it would. Positive indicators for this include: 

• Increased website traffic
• A rise in inquiries from potential customers
• Mention of your products/services by industry leaders
• More customers and more cash in the back

While you may not hit all these indicators, the measures can prove a market for you. It’s easier and cheaper to establish a market with competitive intelligence beforehand. 

Creating the scope for the strategy statement

A company’s scope could include target customers, location, and vertical integration. These may change when what you offer customers is more important than geography. However, you must clearly define parameters and boundaries in every aspect. So it conveys which areas the company must invest more and focus on. 

Your scope may help determine what should be included within those boundaries. But a strategy statement needs lots of experimentation, research, analysis and action. Oh, in other words, competitive intelligence!

The scope of the strategy statement should specify the areas where the business must not go. So you don’t waste your time and resources on projects that don’t match your strategy. 

Defining Competitive Advantage

Competitive advantage is the most crucial part of the strategy statement. It defines how and why you succeed and how you are different from your competitors. It also highlights why you are better than the competition. 

Defining competitive advantage includes stating the customer value proposition. Define what you tell your customers and why they must choose your product/service. So answer why your value proposition is better than your competitors. If you can’t, then look seriously at what you are doing. Also, if you don’t really believe you are better than your competitors in that market, what are you doing it for?

Making it easier to understand how you are different

Highlight your unique competitive advantage, features and activities to meet your customer expectations. Develop a business model canvas connecting your advantage to the customer value proposition. 

Defining a Strategy Statement 

Now you can develop a strategy statement based on an evaluation of the market. Your strategy statement should highlight the essence of your company’s strategy. In a way that’s easy to understand for everyone within the company. Moreover, this process should involve every layer of your team. Only then can you define a strategy statement with utmost detail. 

How to define your strategy statement, objectives, scope, and competitive advantage

In conclusion, a strategy statement is a tool for you to create a long-term vision for success. By articulating a clear and concise strategy, you develop plans to achieve objectives. There’s no one-size-fits-all approach to creating a strategy statement. But things like mission and values, a market analysis, and goals and objectives should be included. 

Words by Swamini Kulkarni

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Created on Oct 10th 2022 05:08. Viewed 131 times.

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