What Are the 3 Approaches to Developing an Organizational Strategy?
Developing a well-defined organizational strategy to guide decision-making and drive success becomes increasingly essent...
As your business builds and develops, you need a clear path for setting the stage for your next big industry-leading idea or major business disruption. Whether you’re uncertain about what comes next, or can’t clearly see the full scope of the opportunities ahead of you, our team will help you create the foundation and structure to reach the full potential that is required. For organizations big and small, change is always impacting business. The ability required to win during significant change is decided by the way we lead our people.
We start with your goals and business needs. We’ll ask the tough questions to identify gaps in the organization and focus on your market specification to research, qualify, prioritize and create viable plans for a future-proof business game plan. We conduct a full review of your strategic plan, organizational design, and business requirements in talent. This includes market analysis, competitive review, and organizational valuation.
Here we challenge and define goals. We dig deep to create a robust analysis of key financial, legal, and operational information. We identify what success means to your organization and perform a 360-degree evaluation of all opportunities and barriers. We work with you to develop short-term and long-term objectives. These goals guide the next steps of the organizational strategy and give us key performance metrics to measure success.
We’ll build concrete growth plans focused on the future to drive execution and manage transitions. This is the roadmap for reaching our defined metrics for success. The game plan includes all of the steps we need to take to build the business and prepare for substantial growth. This plan could include change or adoption of key leadership roles, technical talent, or organizational redesign, depending on your specific needs.
This process comes down to the successful execution of carefully developed plans and strategies. We coach leadership and offer board oversight to help you make the best decisions to transform your organization. Based on the strategy and metrics defined throughout the consultation process, we help execute all activities necessary for organizational success.
Everything has to work together to achieve business goals. Structure, tasks, people, it all comes together to build a strong business prepared for growth. We apply our Medallion Matrix to ensure your most important investment, your people, are chosen wisely and ready to thrive.
Developing a well-defined organizational strategy to guide decision-making and drive success becomes increasingly essent...
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Organizational strategy is a vital facet of any successful business. Without organizational strategy, companies inevitab...
While there are many tactics for increasing innovation in your company, it is almost impossible to create strides in business growth without a well-developed organizational strategy.
An organizational strategy gets down to the brass tacks of your organization. It looks at what your company does, the processes it uses, and how these processes can be refined. It also looks at where your organization should be in the future and the steps needed to get there.
Organizational strategy also defines your organization’s culture. It lays out what your values, expectations, priorities and operational strategies are and will be in the future. Strategic planning can be the difference between a thriving, fast-growing organization and one that is floundering. Let’s dive into how companies can use organizational strategy to create sustained growth.
An organizational strategy is a plan or roadmap that outlines how a company will achieve its goals and objectives. Organizational strategies are essential tools for businesses interested in:
Organizational strategies provide valuable decision-making frameworks that make tough decisions like pursuing growth opportunities, planning investments, and adjusting to ever-changing market conditions, a systematic, efficient process.
Effective organizational strategies are clear, concise, and easy to communicate and implement across your entire brand or business. At the same time, organizational strategies must retain a degree of flexibility that empowers your company to adapt, evolve, and update strategies to stay ahead of the curve (and competition!)
A deep understanding of a company’s mission, values, and competitive landscape is at the heart of every organizational strategy. Leaders with the necessary insight into their organizations can use these strategies to make informed decisions that consistently drive growth and support long-term success.
A strong, data-driven organizational strategy is often one of the critical differences between companies that generate consistent growth and those that struggle to break even.
Without a clear and well-defined strategy, a company can quickly become directionless and struggle to achieve its goals. A robust organizational strategy provides a roadmap for the business, outlining its vision, mission, values, and objectives. It also includes a comprehensive plan for how the company will achieve these objectives and succeed in its marketplace.
A robust organizational strategy allows businesses to focus their efforts and allocate resources – like time, funds, and human capital – effectively. By identifying key priorities and allocating resources accordingly, companies can optimize their performance and maximize their return on investment.
Organizational strategy also helps businesses to stay agile and adapt to changing market conditions. Regularly reviewing and updating your organizational strategy in the face of shifting market conditions, customer needs, and similar factors helps ensure each decision aligns with the company’s long-term goals.
A well-crafted, data-driven organizational strategy is vital for any business that wants to cultivate reliable, replicable success that positions them ahead of the competition. It provides a clear, company-wide sense of direction, ensures efficient resource allocations, and enables companies to remain agile and responsive to changing market conditions.
Businesses can deploy several types of organizational strategies to establish a roadmap to success.
That said, businesses should carefully choose an organizational strategy that aligns with their company culture, managerial style, long and short-term goals, and more, to maximize benefits and curtail drawbacks.
Let’s explore five of the most common types of organizational strategies businesses leverage to achieve their goals. We’ll dive into each strategy’s essential features, benefits, and how they drive success.
Understanding these key organizational strategies can help everyone from small business owners to Fortune 500 CEOs outpace their competitors and achieve long-term success.
The five types of organizational strategies we will cover in this section are:
Let’s break down each of these strategies and dig into how you can leverage them to take your business to the next level.
Competitive strategy is an approach that businesses use to gain a competitive advantage over their rivals.
It involves identifying a business’s unique strengths and weaknesses and leveraging them to outperform competitors. A successful competitive strategy can lead to increased market share, profitability, and customer loyalty.
Many businesses deploying a competitive organizational strategy elect to pursue a “focus strategy.” Focus strategies revolve around identifying and serving a specific niche in their target market.
Companies that adhere to a focus strategy tailor their offerings to attract a particular group or subset of customers, allowing them to dominate a portion of the larger market. This strategy is perfect for companies looking to break into industries dominated by established market players.
Corporate-level strategies are overarching plans that define a company’s approach to managing its various business units, including allocating resources, identifying growth opportunities, and optimizing organizational efforts from the C-suite level down to new hires.
An example of a popular corporate-level strategy is called vertical integration.
Vertical integration occurs when a company expands its operations into businesses that are either upstream or downstream from its core operations.
Corporate-level strategies differ from competitive strategies by focusing on an entire organization’s overall direction and scope rather than just one aspect.
While corporate-level strategies are concerned with the organization’s long-term health as a whole, competitive strategies are more focused on short-term tactics for achieving success within a particular market.
Business-level strategies create a framework for gaining a competitive advantage in a specific market or industry through strategic actions and decisions.
Business-level strategies determine how a company will compete with its rivals regarding the goods or services offered, the target market, pricing, and marketing strategies. Business-level strategy can be broadly classified into two categories: cost leadership and differentiation.
Cost leadership is a business-level strategy where a company aims to be the lowest-cost producer in its industry. Cost leadership seeks to minimize costs in every aspect of the company’s operations – from procurement and production to distribution, marketing, and sales.
These cost-cutting tactics allow the company to offer its products or services at lower prices than its competitors, making it easy to capture budget-conscious and price-sensitive shoppers.
Differentiation, another example of a business-level strategy, hinges on offering products or services that stand out from those of its competitors. Companies can accomplish differentiation through innovation, quality improvements, enhanced design, or excellent customer service.
While corporate-level strategies are concerned with the company’s overall direction and involve decisions about resource allocation and mergers and acquisitions, business-level strategies address questions such as:
Functional-level strategies are concerned with how a particular department within an organization can contribute to the company’s overall strategy.
For example, under a functional level strategy, the marketing department’s strategy will focus on promoting products that fit the overall business-level strategy. The finance department’s strategy may be to minimize costs and maximize profits. The HR department’s strategy could be attracting and retaining the best talent to create a competitive advantage.
Each departmental strategy must align with the overall organizational strategy to achieve the company’s objectives. Effective coordination between departments is crucial in implementing functional-level strategies.
Functional-level strategies may involve changes to your company’s established processes, tech stack, and organizational structure. Functional-level strategies can also include the adoption of initiatives like:
These strategies are critical for the success of the overall business strategy, as they help to ensure that each function of the organization is aligned with the company’s goals and objectives.
Operating level strategies encompass your company’s implementation or “roll-out” strategies for new policies, decisions, and initiatives. Operating-level strategies aim to streamline and safeguard the success of changes at the competitive, corporate, and functional levels.
Building robust operating-level strategies provides valuable frameworks for vital business functions, like:
Developing and executing an operating-level strategy gives your organization a replicable and reliable path toward meeting sales targets, delivering products and services on time, managing costs and inventory effectively, and more.
Since operating-level strategies impact the implementation and success of strategies at every other level, operating-level strategies must support your company’s long-term goals, strategic direction, and values.
Organizational strategies are the roadmaps and guidelines companies use to inform crucial business decisions and achieve long-term goals and objectives.
Identifying the right organizational strategy for your industry, market, and business requires a solid understanding of popular or common organizational strategies. Gaining insight into each type’s unique benefits and drawbacks will position you to make an informed and strategic decision for your organization.
In this section, we’ll explore the four organizational strategies that are commonly used by businesses:
Let’s dive in and explore these four organizational strategies in more detail.
A Product/Innovation organizational strategy is a business approach that focuses on the development and introduction of new or improved products to the market.
This strategy involves investing in research and development (R&D) to create innovative products that meet the evolving needs of customers and outpace competitors. Naturally, companies that typically employ product/innovation organizational strategies have strong research, development, and production capabilities.
A knack for conducting market analysis and customer research is also crucial, since this strategy relies on anticipating the needs of consumers and creating an early-to-market answer.
Product/innovation strategies lend themselves to high-risk, high-reward scenarios.
Researching, developing, and producing a new or improved product requires a significant resource investment, but the potential rewards can be massive. Companies that succeed in their product/innovation efforts will enjoy increased sales, a strong position in their market, and positive buzz around their brand.
Revenue/sales organizational strategies revolve around increasing your company’s income by scaling its sales of goods or services.
This style of organizational strategy involves tapping into new markets, optimizing pricing to maximize profit while remaining competitive in the market, and conducting in-depth financial analysis to identify sales opportunities ripe for growth.
Developing a revenue/sales strategy that moves the needle can be challenging. You’ll need an expert-level understanding of your organization’s products, sales figures, customer data, competitive landscape, and more. But the payoff – steady, data-driven sales growth – is well worth the effort.
Service organizational strategies describe an approach to growth centered around customer service as a differentiation tactic. Companies that deploy service organizational strategies seek to carve out market share by creating customer experiences that surpass those that their competitors provide.
This strategy revolves around the idea that superior service will lead to customer loyalty and retention, and by extension, increased sales, revenue, and profitability.
Companies that adopt a service organizational strategy prioritize customer satisfaction, actively seek and respond to customer feedback, and strive to exceed customer expectations at every opportunity. By placing a strong emphasis on service, companies can differentiate themselves from competitors and build a loyal customer base that helps to sustain long-term success.
Process organizational strategies focus on improving and optimizing the efficiency and effectiveness of the various processes that are the lifeblood of your company.
Process organizational strategies promote analyzing and identifying the core processes at the heart of a business, then examining these processes from every angle to reveal inefficiencies, redundancies, or any other factors that may impact efficiency.
Identifying and eliminating inefficiencies in major operational policies can generate many benefits. Even the most minor improvement to productivity or efficiency can lead to upsides like:
Let’s take a look at a few examples of organizational strategies in action.
Examples of product/innovation-based strategies include:
Examples of functional-level strategies include:
Examples of service strategies can include:
The point of developing an organizational strategy is establishing a roadmap to long-term success. So if you want to create your own organizational strategy, you have to have a clear vision of what long-term success looks like for your company.
Do you want to focus on expanding your customer base? Optimizing revenue and sales with your current offerings? Shaking up your market with a groundbreaking product or service?
All of these paths call for a different style of organizational strategy.
The best organizational strategies capitalize on weaknesses in their industry and market. Conducting an in-depth analysis of your competitors is a vital step to identifying the ideal organizational strategy for your company.
Are you a smaller brand competing with established names? A stellar service strategy might help. Or maybe you’re an established brand interested in playing a larger role in your industry? A corporate-level vertical integration strategy could be the solution you need.
Taking the time to identify gaps in your competitors’ armor is an essential step toward identifying and implementing an organizational strategy that propels your business toward its long-term goals.
Once you’ve mapped out your organization’s goals and identified a promising path toward growth, it’s time to develop your strategy.
Developing an organizational strategy is a significant undertaking that could require insights and input from members at every level of your company.
However, organizations that invest the time and energy into developing a clear, concise, communicable organizational strategy that capitalizes on the strengths, weaknesses and opportunities in the market will find themselves steadily outpacing the competition in three, five, and even ten years.
Where do you want your organization to be next year? In five years? What is your plan to get there? Where do you even start in developing an organizational strategy?
A Medallion Partners, we help companies develop precise strategies to meet their cultural and financial goals.
Medallion Partners is a premium organizational strategy consulting agency with more than 15 years of experience.
Contact us today to get started.
A: Organizational strategies are large-scale tactics employed by companies to guide the overall direction of the business. Business strategies are more limited in scope and seek to optimize specific business units within the larger organizational structure.
A: There are three popular approaches to developing organizational strategies: The Planning/Goal-based Approach, The Emergent/Issue Approach, and The Resource/Systems-based approach.
A: The five types of strategic management include: Competitive, Corporate, Business, Functional, and Operational strategies.