Strategic Statements- Definition, Elements, Implementation And Examples - ALCOR FUND

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Strategic Statements- Definition, Elements, Implementation And Examples

  • October 9, 2020
  • AF Bureau
Strategic Statements- Definition, Elements, Implementation And Examples

Introduction

To understand strategic statements lets go through a scenerio. Have you ever faced a situation wherein your clients tell you that you don’t have a clear idea of what they hope to accomplish with their business? 

 

Or if they do have a clear idea, it’s not written down. Sound familiar?

 

 

That’s why I always recommend that if you have a start-up, you need to have a clear and overall understanding of the strategy.

 

Without precise directions, it could easily lose the focus and be doomed to fail.

 

That’s where the strategy statement plays an eminent role as it gives a precise set of instructions to all the employees.

 

I have written this blog to help you know about the strategic statements,  elements involved, how to write them by enlightening some real-life examples of companies.

 

Strategic Statements Definition

A strategy statement defines the strategic actions of a company. It acts as a blueprint of the company’s movement for years to come. It also sets the company’s long-term strategic plan. 

 

A strategy statement appears at the beginning of a business plan and follows the vision and mission statements of the company.

 

Before we get down to explaining all the elements in detail, let me tell you that the strategy statement consists of six main elements which i am going to discuss.

 

Strategic Statements Elements

 

Strategic Statements Elements

 

Let us scratch the whole surface by defining the elements of the Strategic statements’ hierarchy.

 

There are six main elements and starting from the bottom those are:

  1. Vision, which represents what we want to be
  2. Mission, which explains the reason we exist
  3. Values, defining the things we believe in and our behavior
  4. Strategic Objectives
  5. Scope
  6. Competitive Advantage.

 

Vision

To fully visualize your project at the moment and in the future (something like 5 to ten years), you need to create a vision.

 

For instance, Microsoft’s vision is to empower people through great software, any place, any time, or any device. Wal-Mart’s vision is to become a worldwide leader in retailing.

 

It contributes to effective decision making and effective business planning.

 

Vision statements are about the future. Mission statements, to be effective, should create an urgency in the present.

 

Let’s look at an example. I will be able to assert that this is often perhaps the simplest vision statement ever written:

 

Vision

 

That is vision: painting a transparent picture of how the planet is going to be different someday.

 

But remember, you would never attain your vision because you would understand your organization’s trajectory and make changes to your vision to maintain freshness and relevance in your particular industry

 

Organizations that thrive always remake themselves to remain prior to downturns in their Sigmoid curve (see illustration). The vision must stay far sooner than current reality to stay relevant and drive positive change.

 

Vision

 

In the Sigmoid depiction of organizational life cycles, leaders must keep decisions at the correct times and effective follow-through.

 

So, a vision statement is for the organization and its members, unlike the mission statement which is for the customers or clients.

 

Mission

This explains the reasons why your company or project exists. It describes what the organization does (present capabilities), who all it serves (stakeholders) and what makes an organization unique (the reason for existence).

 

For instance, Microsoft’s mission is to help businesses and people throughout the world to realize their full potential. Wal-Mart’s mission is To provide ordinary people with a chance to buy the same thing as rich people.

 

The mission is about time-bound goals. Let’s take a glance at the subsequent example which is additionally one among my favorites:

 

Mission

 

Here we have JFK throwing down the gauntlet. We will get a man on the moon- tells us about a clear goal. It will happen by the top of the last decade — a transparent timeline. Sparing no expense shows how the mission will get done.

 

So, the Mission statement formula is 

 

Mission = Clear Goals + How + Time Limit + Tools for building clarity and humor

If you still have to explain what your organization does and why after reading it, then you don’t have a good mission statement.

 

If you aren’t changing your company’s mission, purpose or structure, then what you’re doing isn’t “strategic” but it’s still going to be important.

 

This must be a change in an action (tactical or strategic) to try and do something different a minimum of temporarily or permanently, or why would you undertake the project at all?. 

 

So, spend the next 10 minutes writing an engaging personal statement that crisply defines your goals for the next month.

 

Mission WorksheetValues

This represents a set of beliefs of your organization with how the organization will behave. 

 

This involves decision-making processes with some core principles to maintain the organization’s culture.

 

What comes as absurd is that people often focus on technical aspects of the project and often oversee these core values that make the machine run smoothly.

 

Values

Strategic Objective

The strategic objective is the single, specific objective that will drive your business over the next few years. 

 

It is very important to be precise and not mix this element with mission and values.

 

I can freely say that this is the motor that will drive your machine over the next several years.

 

Your objective should be specific, measurable, and time-bound. It must be a single goal for either growth or profitability.

 

One of the most common objectives is maximizing shareholder value. So, when creating a strategy statement, you must answer the question: Which objective is most likely to maximize shareholder value over the next few years?

 

For example, for early-stage startups, the objectives relating to your market strategy depend on the type of market you plan to enter.

 

Scope

The company’s scope encompasses three dimensions—the target customer, geographic location, and vertical integration (whole product). 

 

Clearly defining the boundaries make it obvious which activities to concentrate on and which ones to avoid.

 

It should specify where the business or company will not go. This will prevent employees from wasting time and resources on projects that do not fit with your company’s strategy.

 

Competitive Advantage

Can you present the details that make you specific compared to the others?  What will your consumers remember you for? Are you better or more efficient?

 

This will help you in giving up the right answer to what is your advantage.

 

As soon as you establish a competitive advantage you can be sure that the strategy you have is the right one.

 

Every advantage consists of two segments:

 

Statement of the customer value proposition 

This explains why consumers should be loyal to your products and services.  If a strategy cannot explain that, then your offering will end up in failure.

 

Deliver the customer value proposition 

One of the ways to do so is capturing the unique activities; the other is a complex combination. Here all boils down to consistency about making choices.

 

How to write a strategic statements

Create a product strategy

 

Create a product strategy

 

First, create a product strategy based on your industrial base and landscape.

 

Then, craft your strategy statement based on it. that captures the strategy’s essence in a way that makes sense to everyone in the company

 

I recommend to use this template that includes the three key components of any product strategy:

 

  • Business goals
  • Target audience
  • Audience needs

 

The product strategy should describe who the product is for and why people would want to buy and to use it; what the product is and why it stands out; and what the business goals are and why it is worthwhile for your company to invest in it.

                                                                                                    Roman Pichler

Use the core product strategy statement to choose topics

Use your core product strategic statement as a basis for brainstorming the ideas and choosing which topics to say yes to.

 

Bring together stakeholders to evaluate business ideas as a group. I recommend using a product decision-making matrix like the one shown.

core product strategy statement

Product Roadmap

The product roadmap describes what products and features will be built to realize the strategy and vision, who is responsible for building those product features, and, also, an estimate of when those products and features will be released.

 

The biggest problem with this definition is of course that in a lean/agile world, we might not know yet what “features” we will build to achieve the goals we have.

 

Theme-based roadmaps start with a problem statement and move towards a solution, rather than start with features and struggle to keep up with a far more rigid roadmap.

 

                                                                  -Janna Bastow, founder of ProdPad

 

Theme-based roadmaps have a transparent advantage in lean/agile organizations over feature-based ones, which are always subject to tons of revision and supply a false sense of certainty.

 

However, they may require gathering stakeholder buy-in since they’re not necessarily the primary thing that individuals expect after they hear the “roadmap”.

 

Create a Brief Final Statement

 

Brief Final Statement

 

Your final strategy statement should be a brief strategic statement presenting the main components such as the business’ objectives, scope, vision, mission, values, and competitive advantage.

 

It must be a statement easily understandable by the employees and everyone in the company.

 

Strategic Statement Example

Sara Lee Corporation’s Strategic Statement

Let’s go through the strategic statements of Sara Lee Corporation which were acquired by Tyson Foods later.

 

Invest to accelerate internal growth:

Focus and direct investment spending on strategic opportunities to build shares. This will also accelerate unit volume growth in key product positions.

 

Develop the lowest cost for all product categories:

Emphasis size and measure operating efficiencies and cost structures in all areas of the corporation to reduce costs consistently and to increase return on sales without sacrificing quality.

 

Make Acquisitions:

Acquire businesses that fit Sara Lee Corporation’s strategic focus and which provide increased opportunity for growth consistent with our mission.

 

Leverage brand names and strategically link businesses for synergy:

Generate growth by extending and building brand positions. Also, improve returns by developing synergies and combining divisions among businesses.

 

Pursue cross channel distribution for established brands, products, and, positions:  

Increase unit volume and return on sales with the cross-channel distribution.

 

Tech of America

 

Tech of America

 

About 10 years ago, Teach For America created a strategic statement. Let’s go through their objectives and strategies as shown. 

 

Ikea strategic statements

Can you think about summarizing your strategic statements in less than 15 words?

 

Now that sounds simple. But it’s more difficult than it seems. 

 

But, remember one thing that clarity is so important for good strategies that companies should make an effort to understand what it means and how to achieve it.

 

To understand the power of clarity, let me retell this 15-word strategy statement example of Ikea.

 

IKEA’s value proposition is focused and different. For the consumer, IKEA has a clear positioning in their minds and is sharply contrasted with other values.

 

Keeping to a 15-word limit can help you achieve that kind of clarity and avoid confusion and misalignment so easily hidden in a 100-page document. Implement it in your next strategic statement and see what happens.

 

Well, from all of those examples, several key factors are fundamental to all or any form of strategy. There’s

 

  • An understanding of where you are now
  • A clear sense of where you would like to end up
  • An assessment of what stands in between, 
  • A decision about how to approach the challenge
  • A specific course of action to undertake.

 

Wrapping Up

Finally, building a compassionate society, by providing an integrated set of solutions to a target group is what these elements of strategic statements are all about.

 

Once you learn how competitive advantage, objectives, Mission, Vision, Values, and scope as the core elements of strategy statement work, you will become number one in your niche in the market.

 

This is easier said than done but do not give up.

 

You can also use our Venture Capital Pre Screening Assessments to evaluate your business and design a strategic Statement. This will also help you in getting funding  for your business in just 5 steps.

 

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