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Read the highlightsA strategy statement communicates your company’s strategy to everyone within your startup. The statement consists of three components: objective, scope and competitive advantage. All three components must be expressed as clearly as possible. A well-written strategy statement will help employees and the organization to understand their roles when executing the company’s strategy. Without this understanding, your startup may be pulled in different directions and lose its focus. The purpose of the strategy statement is to ensure that employees have a clear understanding of the company’s strategy. Hierarchy of company statementsThe strategy statement is the fourth level in the hierarchy of company statements. It is more concrete, practical, and unique than the mission statement. Elements of a strategy statementThere are three basic elements of a strategy statement: the objective,
the scope and the competitive advantage. Defining the objective, scope and competitive advantage requires trade-offs, which are fundamental to strategy. For example, if a company decides to pursue growth, it must accept that profitability will not be a priority. If it decides to serve institutional clients, it may ignore retail customers. Defining the strategic objectiveThe strategic objective is the single, specific objective that will drive the business over the next few years. It is based on the maxim, “If you don’t know where you are going, any road will get you there.” It is not to be confused with the company’s mission, vision or values, which are not useful as strategic goals. The objective must be specific, measurable and time bound. It must also be a single goal (that is, growth or profitability), although subordinate goals may follow from the strategic objective. Maximizing shareholder value is one strategic objective. However, many strategies are designed to achieve this goal. When creating a strategy statement, you must answer the question: Which objective is most likely to maximize shareholder value over the next few years? Entering an existing marketIf you enter an existing market, your aim for the first year will be to maximize the market share that you capture from the competition. To measure that objective, you need to:
Entering a new marketIf you enter a new market, your first-year objectives will differ. They will not be revenue-oriented. Instead your objectives will focus on:
At the end of the year, ideally you will see evidence of traction around your vision:
The details will depend on the nature of your business, but in general, these types of measures will indicate whether a market exists for you. Defining the scopeThe company’s scope encompasses three dimensions—the target customer or offering, geographic location, and vertical integration (that is, whole product). Each dimension may vary in relevance (for example, the customer may be more important than geographic location). Clearly defining the boundaries in each area should make it obvious which activities to concentrate on (and which ones to avoid). The company’s scope does not determine exactly what should be done within those boundaries, as there is room for experimentation and initiative. However, it should specify where the company or business will not go. This will prevent employees from wasting resources on projects that do not fit the corporate strategy. Defining the competitive advantageThe competitive advantage is the most important part of the strategy statement. It describes the logic of why you will succeed, how you differ, or what you are doing better than the competition. To define the competitive advantage:
Developing a strategy statementFirst, create a great product strategy based on careful evaluation of the industry landscape. Then, develop a strategy statement that captures the strategy’s essence in a way that makes sense to everyone at the company. The process should involve employees in all parts of the company and at all levels. Work through the wording of the strategy statement in as much detail as possible. The end result is a brief statement that reflects the three elements of an effective strategy and makes sense to everyone in the company. It may include explanatory notes to clarify issues and implications. Summary: A strategy statement communicates three key aspects of your business (objective, scope and competitive advantage) to your employees to help them best execute their roles; without such clarity, your startup may lose its focus.Read next: A strategy canvas: A tool for developing a differentiation strategy for technology productsBuilding your go-to-market strategy for an international market? Sign up to the International Growth Collection to access specialized resources built in partnership with Export Development Canada. Learn more about the International Growth Collection What are the 3 parts of the marketing strategy statement?The statement consists of three components: objective, scope and competitive advantage.
What is included in a marketing strategy statement?Features of market strategy statements include a list of business goals, a list of actions necessary to meet these goals, market research and analysis that support the need for these actions, a description of target markets, annual or quarterly financial goals, and support resources needed to implement the strategy.
What is the third step in the marketing process?Step 3: Understand Your Audience. The third step of the marketing planning process is to understand your audience.
What does the third section of a marketing strategy statement of a new product describe?The third part of the marketing strategy statement describes the planned long-run sales, profit goals, and marketing mix strategy. Step 5- Business Analytics: A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives.
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