Although some companies are able to extend their activity organically by acquiring new customers through a natural process, most businesses face significant expansion issues that can only be solved with strategic planning, which revolves around creating a strategic profile.
Since the main role of a strategic profile is to define a company’s activity, organizational concepts and competitive posture in a specific market segment, it focuses on relative performance across the most important competitive factors.
Developing the Strategic Profile of a Company
There are several external, internal and strategic factors a management team must consider before outlining the strategic profile of an organization. While external factors relate to the economic and social climate, market structure, legal/political considerations and technology, internal factors include resource availability along with short- and long-term objectives. On the other side, strategic factors define the position of a company in a particular industry segment.
Regardless of whether the focus is on external, internal or strategic factors, the management team of an enterprise must consider the following tips if it wants to develop a complex strategic profile, which grants access to the most lucrative opportunities for that particular business.
- Generate a Strategic Personality: To create an exceptional strategic profile, a product or service provider must be seen as a differentiator able to provide customers unique products and services; a low cost supplier ready to compete with other businesses in order to offer the best quality-price ratio; a prospector capable to change the market by creating new products and services; an analyzer willing to learn from his own mistakes in order to improve his products and services; and a defender who is always prepared to protect his customers against low-quality products and services. After developing a truly strategic personality, a business owner should direct his or her efforts toward creating a competitive formal framework.
- Establish Formal Framework: A fully functional formal framework represents a very important point for the strategic profile of an organization. Creating such framework is almost impossible without studying and understanding the differences among organic and mechanistic business structures. An organization that focuses on organic, natural growth should follow a decentralized structure that relies on informal systems, which are highly adaptable in fluctuating environments. Conversely, a company that focuses on mechanistic growth should opt for a strategic approach, which is quite inflexible and usually suitable for stable markets.
- Choose the Right Leaders: When developing a strategic profile, it’s critical to underline the presence or absence of transformational leaders, also referred to as task-oriented leaders or implementers. Very important to strategic change, these leaders focus on getting the work accomplished – an essential aspect for potential associates and customers. If a company centers its activity on transformational leadership, it should mention this aspect in its profile.
- Define Organizational Culture: Since organizational culture comprises the values and rules that establish how things are done in a company, most customers check this aspect before choosing the services of a certain organization. A business entity with a healthy organizational culture has great chances to gain a competitive advantage over its competition.
The aforementioned tips assist managers in creating complex strategic profiles for different companies. A great aspect about having a comprehensive profile is that it gives business owners the possibility to compare it with the strategic profiles of their competitors. This means that businesspeople can use strategic profiles to develop comprehensive business strategies that not only sustain growth, but also ensure competitive market positions.
Management teams can also use strategic profiles to perform SWOT (Strengths, Weaknesses, Opportunities and Threats) analyses, which compare internal strengths to weaknesses in order to allow leaders to decide whether the organizations they run are able or not to sustain growth. If strengths outweigh weaknesses, companies should establish appropriate strategic expansion plans. If weaknesses outweigh strengths, the respective organizations should focus on correcting specific issues, such as errors, budget pitfalls, staff shortages and productivity fluctuations, before going any further. These strategies can be developed and enhanced with an organizational development degree.