It provides direction as to

What your company aims to ultimately achieve (Vision),
What guides your daily works (Mission) and
What differentiating strengths you must develop to outperform the competition at what you do (Competitive advantage)

If, for instance, we say that our strategy is “to make customers want to return to us”, implied within it are our Vision to grow, our Mission to make quality and simultaneously competitively priced products and our Competitive Advantage (CA) centered on our organizational capability to create satisfying products in demand by our targeted customers.

At one leg we have our customer needs and at the other our configuration of the product. Business strategy should match the two with each other in a unique mix of effectiveness and ingenuity.

Benefits from having a business strategy are:

It makes us focused on the wants of the customer and on how to create meaningful products
It guides us to find a position where we can play the competitive game to our strengths while minimizing the influence of our competitor strengths
It gives a direction to the work of the company
It guides alignment and coordination amongst the company people
It generates tactics to win battles and overrun obstacles

In crafting a strategy many tools and frameworks are used like the Strategy Canvas, the SWOT, the Porter’s 5 or 6 forces, the Value Chain or the Business Model Canvas. Each when properly used builds on the insights of the others and together offer a more comprehensive search into what matters in your business thus helping to identify the business strategic elements.

The need for strategy may not come from the start of the company. Businesses originally operating by the owners’ gut feeling though OK in the beginning years, [...]