According to Thompson, Peteraf, Gamble, and Strickland (2012), strategy “consists of the competitive moves and business approaches that managers are employing to grow the business, attract and please customers, compete successfully, conduct operations, and achieve the targeted levels of organizational performance” (p. 4). As leaders of companies (and even of families), a good strategy is needed to assess what the present situation is, where the business needs to go from here, and how the company can get to where it wants to be.
A strategic vision must be created in order for companies to develop an effective business model that will explain the rationale for why the approach and strategy will be successful. If the business plan does not contain a strategy that will provide profitability, the strategy is not good and it is possible that the business will not survive. A good strategy will fit the company’s situation by working with the strengths, weaknesses, competencies, and competitive capabilities. The strategy should also be able to help the company maintain competitive advantage and result in better company performance in terms of finances and market standing. The strategic vision describes the path a company will take to develop and strengthen the business. The strategic vision essentially provides the path for implementing the strategy and reaching the goals.
An effective vision statement must be graphic, directional, focused, flexible, feasible, and easy to communicate. Thompson et al (2012) state “an effectively communicated vision is a tool for enlisting the commitment of company personnel to actions that move the company forward in the intended direction (p 23). A vision statement is important to clearly communicate a company’s future. In contrast, a company’s mission statement typically describes the purpose of the business.
Finally, in order for strategy to be effective, a company must implement and execute the strategy to include staff, allocating resources, ensuring that policies and procedures facilitate execution, using best known practices, motivating people to obtain goals, tying rewards and incentives to the achievement of goals, creating a positive climate and culture in the company, and exerting transformational leadership.
Thompson, Peteraf, Gamble, & Strickland (2012). Crafting and executing strategy:
The quest for competitive advantage. New York: McGraw Hill Irwin.