Business Strategy & Business Tactics Definitions

Continuing on the information needed to develop business architecture, here will start with the business strategy and the business tactics definitions

Business strategy refers to the plan of action that an organization develops to achieve its long-term goals. It is a high-level plan that outlines the direction and scope of an organization over a significant period, typically three to five years or longer.

Business strategy involves analyzing the organization's strengths, weaknesses, opportunities, and threats (SWOT analysis), assessing the competitive landscape, and identifying potential growth areas. Based on this analysis, the organization can develop a set of objectives and tactics to achieve its goals and gain a competitive advantage in the market.

The business strategy may include elements such as pricing, marketing, product development, partnerships, distribution, and customer service. It also involves making choices about which markets to target, which products or services to offer, and how to allocate resources effectively.

Thereby you could face the term business tactics, wondering, if is it an alter to business strategy, parent, or even a sub-part of it, then its time to get introduced to the business tactics definition

Business tactics refer to the specific actions and approach that an organization uses to achieve its short-term goals. Unlike business strategy, which is focused on long-term planning and overall direction, business tactics are more immediate and are geared toward achieving specific objectives within a shorter time frame, typically a few months to a year.

Business tactics may include things like pricing promotions, product bundling, targeted advertising campaigns, sales contests, and other initiatives designed to increase sales or improve profitability in the short term. Tactics can also involve operational changes such as streamlining processes, reducing costs, or improving customer service.

While business tactics are more immediate and focused on short-term goals, they should still be aligned with the overall business strategy. Tactics that are not consistent with the long-term direction of the organization can be counterproductive and ultimately undermine the organization's success.

In summary, a good business strategy helps the organization to remain focused on its goals, make informed decisions, and adapt to changes in the marketplace over time.

While business tactics are critical for achieving success in business, as they enable organizations to adapt quickly to changing market conditions and exploit new opportunities as they arise.

to understand business strategy and business tactics more here are a couple of examples:

EX1: Market Expansion

Business Strategy: Diversification Strategy

An organization decides to pursue a diversification strategy to expand its product offerings and enter new markets. This strategy will involve developing new products or services that are different from the organization's existing offerings and entering new markets where the organization has not previously operated.

Business Tactic: Product Development

To implement the diversification strategy, the organization decides to develop a new line of products that complement its existing offerings and appeal to a new customer base. The organization conducts market research to identify customer needs and preferences and then uses this information to develop new products that meet those needs. The organization may also invest in research and development to create innovative products that differentiate it from competitors.

As the organization launches new products, it may use various business tactics to promote them, such as targeted advertising campaigns, social media marketing, or promotional pricing to attract customers. These tactics support the overall diversification strategy by helping the organization gain traction in new markets and establish a strong brand presence in those markets.

as seen above, the diversification strategy and product development tactic work together to help the organization achieve its long-term goals of expanding its product offerings and entering new markets, while the marketing tactics help to support the short-term objectives of gaining market share and increasing sales.

EX2: Cost Optimization

Business Strategy: Cost Leadership Strategy

An organization decides to pursue a cost leadership strategy to become the low-cost producer in its industry. This strategy involves reducing costs wherever possible to offer products or services at a lower price than competitors while still maintaining acceptable profit margins.

Business Tactic: Supply Chain Optimization

To implement the cost leadership strategy, the organization decides to optimize its supply chain to reduce costs and increase efficiency. This may involve negotiating lower prices with suppliers, implementing just-in-time inventory systems, or consolidating shipments to reduce transportation costs.

The organization may also invest in new technology to automate processes, reduce waste, and increase productivity. For example, it may implement robotic process automation in manufacturing or use data analytics to optimize logistics and transportation.

By implementing these tactics, the organization can reduce its costs and offer products or services at a lower price than competitors without sacrificing quality. This supports the overall cost leadership strategy and helps the organization gain a competitive advantage in the market.

as described in this example, the cost leadership strategy (the business strategy) and supply chain optimization tactic (the business tactic) work together to achieve its long-term goal of becoming the low-cost producer in its industry.

considering that the BS and the BT could work independently will lead to the organization's failure to achieve its goals and objectives.

so to develop or analyze the business strategy and the business tactics, you need to be familiarized with their main components.

What does the Business Strategy composed of?

the components of a business strategy can vary depending on the organization and its industry, but generally include the following:

1. Vision and Mission: A clear and inspiring vision and mission statement that outlines the organization's purpose, values, and direction.

2. Goals and Objectives: Specific, measurable, and achievable goals and objectives that support the organization's mission and vision.

3. SWOT Analysis: A comprehensive analysis of the organization's strengths, weaknesses, opportunities, and threats, which helps identify areas of competitive advantage and potential risks.

4. Competitive Analysis: An assessment of the organization's competitors, including their strengths, weaknesses, and market positioning, to determine how the organization can gain a competitive advantage.

5. Target Market: Identification of the target market and understanding of customer needs and behaviors, which helps inform product development, marketing, and sales strategies.

6. Value Proposition: A clear value proposition that communicates the unique benefits of the organization's products or services to customers and differentiates it from competitors.

7. Resource Allocation: Effective allocation of resources, including financial, human, and technological resources, to support the organization's goals and objectives.

8. Implementation Plan: A detailed plan of action that outlines how the organization will execute its strategy, including timelines, milestones, and contingency plans.

9. Performance Metrics: Key performance indicators (KPIs) and other metrics to measure the success of the strategy and make adjustments as needed.

What does the business tactics composed of?

The components of a business tactic generally include the following:

1. Specific objective: A clear and specific objective that the tactic is designed to achieve. This objective should be aligned with the organization's overall strategy and goals.

2. Target audience: Identification of the target audience that the tactic is intended to reach, such as existing customers, new customers, or a specific demographic group.

3. Action plan: A detailed action plan that outlines the steps needed to execute the tactic, including timelines, milestones, and contingency plans.

4. Resource allocation: Allocation of resources, such as budget, personnel, and technology, necessary to implement the tactic effectively.

5. Performance metrics: Key performance indicators (KPIs) and other metrics to measure the success of the tactic and make adjustments as needed.

6. Monitoring and adjustment: Ongoing monitoring of the tactic's progress and effectiveness, and making adjustments as necessary to ensure that it is achieving its intended objectives.

now it's time to share with you how to develop a business strategy and business tactics, and how to ensure the alliances of the business strategy and tactic together.

the steps stated below are considered as a guide, which means they may vary as the conditions and the situation change.

The steps to develop a business strategy are:

1. Conduct a SWOT analysis: Start by conducting a comprehensive analysis of the organization's strengths, weaknesses, opportunities, and threats. This analysis will help identify areas of competitive advantage and potential risks.

2. Define the mission and vision: Develop a clear and inspiring mission and vision statement that outlines the organization's purpose, values, and direction.

3. Set goals and objectives: Establish specific, measurable, and achievable goals and objectives that support the organization's mission and vision.

4. Analyze the competitive landscape: Conduct a competitive analysis to assess the organization's competitors, including their strengths, weaknesses, and market positioning, to determine how the organization can gain a competitive advantage.

5. Identify the target market: Identify the target market and understand customer needs and behaviors, which helps inform product development, marketing, and sales strategies.

6. Develop a value proposition: Develop a clear value proposition that communicates the unique benefits of the organization's products or services to customers and differentiates it from competitors.

7. Allocate resources: Allocate resources effectively, including financial, human, and technological resources, to support the organization's goals and objectives.

8. Develop an implementation plan: Develop a detailed plan of action that outlines how the organization will execute its strategy, including timelines, milestones, and contingency plans.

9. Monitor and adjust: Establish performance metrics, including key performance indicators (KPIs), to measure the success of the strategy and make adjustments as needed.

The steps to develop a business tactic can vary depending on the specific tactic being used, but generally include the following:

1. Define the objective: Start by defining a clear and specific objective that the tactic is intended to achieve. This objective should be aligned with the organization's overall strategy and goals.

2. Identify the target audience: Identify the target audience that the tactic is intended to reach, such as existing customers, new customers, or a specific demographic group.

3. Analyze the competition: Conduct a competitive analysis to understand how competitors are addressing similar objectives or targeting similar audiences, and identify potential opportunities or challenges.

4. Develop an action plan: Develop a detailed action plan that outlines the steps needed to execute the tactic, including timelines, milestones, and contingency plans.

5. Allocate resources: Allocate resources, such as budget, personnel, and technology, necessary to implement the tactic effectively.

6. Establish performance metrics: Establish key performance indicators (KPIs) and other metrics to measure the success of the tactic and make adjustments as needed.

7. Execute the tactic: Execute the tactic according to the action plan, monitoring progress and making adjustments as necessary.

8. Evaluate success: Evaluate the success of the tactic against the established performance metrics, and use this evaluation to inform future tactics and strategies.

To ensure that a business tactic aligns with the business strategy, the following steps can be taken:

1. Start with strategy: Begin by reviewing the organization's overall business strategy and goals. This will help identify the objectives and target audience for the tactic.

2. Define the objective: Clearly define the specific objective of the tactic and ensure that it aligns with the overall strategy and goals.

3. Conduct a SWOT analysis: Conduct a SWOT analysis to identify potential strengths, weaknesses, opportunities, and threats related to the tactic and ensure that it is feasible and realistic.

4. Evaluate the competition: Evaluate the competition to understand how they are addressing similar objectives or targeting similar audiences, and identify potential opportunities or challenges.

5. Develop an action plan: Develop a detailed action plan that outlines the steps needed to execute the tactic, including timelines, milestones, and contingency plans.

6. Allocate resources effectively: Allocate resources, such as budget, personnel, and technology, necessary to implement the tactic effectively and ensure that they are aligned with the overall strategy.

7. Establish performance metrics: Establish key performance indicators (KPIs) and other metrics to measure the success of the tactic and ensure that they align with the overall strategy.

8. Monitor and adjust: Monitor the progress of the tactic and make adjustments as necessary to ensure that it remains aligned with the overall strategy and goals.