Why is strategy important to business - Essay Example

Why Is Strategy Important To Business? Full & Number Section Number Unit Number Case Why is strategy important to business?In the contemporary age, competition in the market is much more than it was ever before. A lot of companies have established the businesses, thus providing the consumers with more options and variety both in terms of the product and the vendor. Consumers have been empowered. Companies need to have a unique strategy not only to excel in the market, but also to survive the competition.

This paper answers why strategy is important in business. Strategy provides a business with a base plan. Strategy is important for a business because it provides the management with the knowledge of the way individual activities and organizational personnel are interlinked and connected to obtain the business objectives. The strategy sets the direction for business depending upon the threats and opportunities of the macro environment as well as the micro environment. The needs of a business change in reaction to the changes of the environment.

There are numerous entities that bring a change in the environment. Such entities include but are not limited to the competitors, customers, stakeholders, rules, legislations, and political, technological and socioeconomic factors. With an increase in the change of the environment, there occurs an increase in the number of opportunities and threats for the business. Business does not only need to have a strategy in case of a change. Even with a stable environment, the stakeholders’ activities and intentions alter, thus causing a need for the business to review the current events and gauge the efforts to create value for the consumers.

The most fundamental element of strategy in the business is planning. Planning is an outcome of estimation. Estimation and assessment form the basic level of the strategic management process. First of all, the manager studies the scope of the product or service in the area that is intended to be produced from the business. Assessment of the buyer behavior aids the development of successful strategy (Pearce, 2008, p. 119). After this, the past, present and future trends in the design are reviewed with an aim to develop an innovative design that provides the customer with a product or service previously unseen or unused.

The development of design and the product involve prudent planning and scheduling and usability of the resources. Once the product or service has been developed, no more than 50 per cent of the work is done. The rest of the 50 per cent is about the advertisement of the product or service. This is the most crucial step in the process of strategic management. Only the product or service introduced to the consumers at the right time, in the right way and in the right place makes the strategy successful.

Alongside, it is equally important to choose as cost effective a way of advertisement as possible because the profitability of the business can not be compromised upon. Managers have to take the political and socioeconomic conditions of the place/country into consideration while deciding the time of introduction of the product or service to the consumers because they play a cardinal role in making a particular product or service a success or a failure. References: Pearce, J. A. (2008). Strategic Management. 10th Ed. India: Tata McGraw-Hill Publishing Company.