Knowing the purpose of the strategy is the correct introduction to the subject of strategy. In general, knowing the purpose of any topic enables you to understand it correctly and use it optimally.
The purpose of the strategy refers to the goal of having a strategy. And it lies in these three main functions: Setting effective goals for the organization, Preparing plans to reach these goals, and mobilizing and employing all the organization’s resources to achieve these goals and implement the plans.
I’ve personally discovered the considerable difference that knowing the purpose of a strategy can make. So I encourage you to study this article which will explain the purpose of the strategy in more detail.
Table of Contents
The importance of knowing the purpose of the strategy
The following sections explain the importance of knowing the purpose of the strategy. additionally, show the benefits and advantages of understanding the purpose of strategy
The benefits of preparing a corporate strategy can be relied on in three main advantages, which are as follows:
1- Enabling the organization to set clear and effective goals that enable it to survive and grow in the market
2- Preparing plans, programs, and policies to enable the organization to reach its goals.
3- Mobilize and focus all the organization’s resources to implement the plans that enable the organization to reach its goals
Also, the importance of the strategy’s purpose becomes more evident when we shed light on the failure of companies and organizations.
For more information, you can refer to the strategic responsibilities and types of strategy articles.
The main reasons for the companies’ failure
The overall corporate failure rate is 90% in most statistics. Imagine with me how many companies fail. This number made me stop and think first before starting a new business or advising any business.
Also, this high rate of failure motivates research centers to specialize in studying the causes of a company’s failures and presenting their results through various publications, books, and magazines.
Unfortunately, I did not know the value of these essential tips unless I went through the experience and learned the hard way. Then, I went back to study these researches and linked them to the practical side and knew their importance. So I hope you learn by the easy way, which this article does.
One of the most important reasons for the failure of companies is the lack of sufficient knowledge of the market so that the organization or company can set clear and specific goals for it.
In addition, if companies can set clear goals for themselves, they often fail to develop plans that will enable them to achieve their goals. Some companies lose both clear goals and guarantee plans to reach them.
Finally, the strategy’s purpose is to develop a solution to the problems experienced by companies that lead to their failure or loss of their resources. For more information, you can refer to the strategic tips article.
The purpose of the strategy
The purpose of the strategy relies on These three main points:
- Setting goals
- Building action plans
- Mobilize and focus resources to achieve goals
The following parts of this article will explain the purpose of the strategy in more detail.
1- Setting Strategic Goals
Strategic goals are the results that organizations and companies seek to achieve. These objectives must be effective in the market and measurable. Usually, strategic goals are long-term goals compared to other operational goals.
Strategic goals are a compass that shows the location to be reached by the company. Based on these goals, the company can develop plans and draw up various policies and programs.
Given the importance of strategic goals, the first thing strategic teams do is define them because they are the compass that will lead the other teams to work on them.
Setting strategic goals is not an easy process as it requires deep knowledge of many different aspects. The following paragraph outlines the essential knowledge and experience needed to build transparent and effective goals.
Knowledge required to set strategic goals
The following points represent the essential knowledge needed to set the strategic goals.
- Accurate knowledge of the market in which the company or organization operates (competitors, customers, production and marketing methods, … etc.)
- Deep knowledge of the economic, political, and social conditions of the country or the geographical location in which the organization or company operates
- Predicting the future with changes in technology, customer preferences, the environment, etc.
This knowledge and information is used in the process of strategic analysis and making a strategic vision. These two processes are vital to clarify effective strategic goals for the organization.
In short, the strategic analysis process aims to study the organization’s external and internal environment to know the challenges facing the organization and the weaknesses that exist within the organization. To learn more about this topic, you can refer to the article: Stages of Strategy.
Examples of goals in some of their different forms
For example, the strategic goal of a car production company is that: Our car will be the most used in the world within the next ten years.
Then strategic teams analyze how to reach this strategic end. For example, the company must produce a car every hour, reduce costs, and use modern production technologies (this is a more explicit goal).
The more detailed goals are as follows:
- Increase the company’s annual income by 50% over the next three years
- Opening of 5 additional branches of the company after two years
- Work on reducing the production cost by 10% after one year
- Increased company profit by 10% after three years
- Move to nanotechnology within the next three years
The second purpose of the strategy, in the next section, explains how to reach these goals.
2- Building action plans
The purpose of the strategy did not overlook the operational process and its importance in achieving the goals or objectives.
Therefore, after the organization’s strategic goals have been determined, the strategy focuses on building strategic plans that enable the company to reach these strategic goals.
The strategic plan is the steps and tasks that the company or organization must undertake to reach the goals that have been set.
The function of the strategic plan is to move the company from its current position to the future position to be reached. The team divides The strategic plan into different stages; each stage has its own interim goals.
When there is no plan to be followed by the organizations, it often deviates them from the right path to achieve their strategic goals. Often, companies get lost in the details of the operational process, forgetting the goal and purpose of these businesses.
3- Mobilize and focus resources to achieve goals
Most companies complain of a shortage and limited resources. Therefore, must mobilize the organization’s resources to achieve the goals and implement the plan.
For example, we are reorganizing the organization’s structure to suit the established plan and defining the authorities, and allocating resources in line with the role of each part of the organization in implementing the plan.
Additional, The policies that must be followed by the decision-making process and the implementation of operations are also defined.
In the same context, the company’s vision and mission are formulated and circulated to be evident. The company’s mission and vision continuously motivate employees. And put their focus on the goals to be reached.
In this way, the organization will operate as a single unit that moves towards the goals based on the set plan, enabling it to reach its goals at the lowest costs and in the shortest possible period.
Knowing the purpose of the strategy enables you to define effective and clear strategic objectives or goals. It also helps you to build an integrated plan to reach these goals.
The purpose of the strategy is to protect companies from failure by minimizing the challenges they face during their journey in the market and enabling them to seize the opportunities in their environment.
The purpose of strategy is to define the organization’s goals and then ensure that all resources are employed and focused on achieving them and not deviating from them.
The purpose of the strategy includes two main parts: first, setting goals, and second, building plans to reach these goals.
Given the importance of strategic goals, the first thing that strategic planners do is to define strategic goals because they are the compass that will lead the other teams to work on them.
To set the strategic objectives or goals, the team must have a deep knowledge of the market in which the company or organization operates (competitors, customers, production and marketing methods, … etc.).
Also, setting strategic goals requires a deep knowledge of the country’s conditions or the geographical location in which the organization or company operates.
In addition, it requires work teams to have creativity, knowledge, and various skills: predicting future changes in technology, customer preferences, the environment, … etc.
Also, building effective plans is one of the essential elements of the purpose of the strategy. These plans work to enable the organization to reach its goals effectively.
Finally, the strategy works to mobilize and focus the company’s resources to achieve the goals through the set plan. And not to allow the company to scatter in business that does not serve the company’s future.