Achieve your goals with an organizational strategy
When running a business, there are many decisions to be made. Business leaders must decide how to allocate their funds, staff, and focus to best meet business needs and gain a competitive edge over other companies. That’s why having an organizational strategy in place is critical.
An organizational strategy can help you maximize your resources and work more efficiently to achieve your business goals. If you’re new to organizational strategies or need a refresher, explore the common strategy types, benefits, and examples below to discover how a well-crafted strategy can help your business meet its goals.
What is organizational strategy?
An organizational strategy focuses on how your organization will allocate resources to best achieve business goals. In essence, it’s an action plan for meeting your key objectives.
Each of your internal resources is the building blocks to your success. So it’s essential that you put them behind your highest-priority business activities to achieve continuous success.
Organizational strategies can take many forms, depending on what your goals are. They can help you grow your business, work to reduce costs or improve other internal processes. Organizational strategies can also be crafted to address a company-wide issue or target a specific business area.
The importance of organizational strategy
Explore the key benefits of creating and implementing an organizational strategy within your company.
Better resource allocation
Properly allocating your resources around projects that support your larger business goals is essential, especially if you’re running a smaller business with a smaller budget or limited staffing resources. A clear strategy behind allocating your resources can make them go much further.
Otherwise, it’s easy to have a half-baked or inconsistent process of allocating resources that leaves key areas underfunded or understaffed or spreads them too thin in a manner that won’t support proper growth in your highest priority sectors.
Improving decision-making
A clear plan and goals will simplify decision-making throughout the organization. It can be challenging for each team leader to decide how best to use their resources, such as labor hours and budgets.
When you have a clear organizational strategy, each department or leader will have a clearer picture of where they should focus their attention and resources and how that will contribute to the business’s overarching goals.
Unifying your team around common goals
A set organizational strategy can improve transparency and communication within your organization while unifying your team members around clear, shared goals.
Providing transparency around your goals, focus, and strategic decision-making can help improve employee morale, and having everyone united can reduce confusion and encourage teamwork to reach your overarching business goals.
Levels of organizational strategy
There are generally three layers of an organizational strategy.
Corporate-level organizational strategy
The corporate-level strategy is your big-picture strategy that focuses on the larger organizational structure and long-term goals. It should focus on how you’ll leverage and allocate your resources over the next several years to support ongoing goals like business growth, expanding product offerings, entering new markets, and more.
Business-level organizational strategy
The business-level strategy focuses on maximizing your competitive advantage within your industry. Like a corporate strategy, it is still a larger company-wide strategy, but it’s narrowed to focus on promoting your products and services and increasing market share.
Functional-level organizational strategy
The functional-level strategy focuses on one function or area of your business that presents an opportunity for growth or improvement. For example, if your customer rating scores have dipped, you may focus on improving customer service.
Types of organizational strategies (with examples)
Explore some common types of organizational strategies and examples from major companies.
Focus strategies
Focus strategies shift your business focus. The goal is to target a specific market segment. For example, you might target an underserved customer base. Or, you could attempt to differentiate from competitors.
To do this, tailor your product or service to a niche market. Instead of appealing to everyone, you address the specific needs of this niche.
Companies can also execute a focus strategy by narrowing their scope based on cost to target solely budget shoppers or only sell high-end items.
One example of a company using a focus strategy is BARK Air, an airline for people who want to travel with their dogs in-cabin. They are focusing on the pet owner market within the travel space rather than trying to appeal to all flyers.
Traditional airlines haven’t served this segment well, so a focus strategy to target this underserved market segment makes sense.
Cost leadership strategies
Cost leadership strategies focus on cutting costs such as production expenses and overhead to reduce the price of your product and better compete in the market. A famous cost leadership organizational strategy example is Amazon.
Amazon cut overhead by operating as an e-commerce retailer instead of a brick-and-mortar store, undercutting the prices of bookstores and overtaking in-person retailers to gain popularity with consumers.
Growth strategies
Growth strategies are designed to expand your business in a specific area. That may be through increasing market penetration, developing new products, expanding through partnerships or mergers, or exploring new sales channels.
One growth strategy that many businesses use is expanding their commerce channels by partnering with vendors like InstaCart for same-day delivery or capturing new audiences through social selling on TikTok shop.
Differentiation strategies
A differentiation strategy focuses on how your organization can stand out and be the best within your market and industry. You can diversify your product and service offerings. Additionally, you can elevate a service to act as a competitive advantage.
Furthermore, you can develop a marketing strategy. This strategy can build exclusivity. Alternatively, it can emphasize a unique aspect of your product.
One example is Build-A-Bear. Plenty of stuffed animal options are on the market, many of which are cheaper than Build-A-Bear’s offerings. Still, the company has differentiated by building an experience around its product.
The customization options and the in-store experience of making your bear or stuffed animal differentiate their products and services from competitors.
Diversification strategies
These strategies focus on diversifying your product or service offerings to increase revenue and expand your reach. A popular way to do this is by creating complementary product lines that build on your success.
For example, Apple was initially focused on making computers, but it later became known for iPod mp3 players and then moved into other tech areas like smartphones, tablets, and smartwatches.
This is a classic example of a diversification strategy. The company continues to expand in a specific sector, which is consumer technology. Moreover, it expands through products that complement each other. These products have a shared operating system and interconnectivity.
How to develop an organizational strategy for your business
Follow the steps below to create an effective organizational strategy.
Assess your current situation
Take some time to examine your company’s current state. Dig into your data to determine what’s working, what may not, and what resources you have available.
It’s also good to examine your current company culture and established values and consider how those will affect your organizational strategy.
Should you allocate more resources and focus on initiatives that align with your core values, like sustainability or giving back to the local community? How does your culture dictate how your team collaborates and what they need to meet their primary objectives?
Conduct a SWOT analysis
Once you’ve preliminarily reviewed your current situation, a SWOT analysis can help you dig deeper. A SWOT analysis is a tool for assessing your company’s position in your market. It involves evaluating your:
- Strengths: This is where you’ll note what’s working well, your competitive advantage or unique attributes, and your available resources.
- Weaknesses: These are the areas where you’re struggling or underperforming.
- Opportunities: This is where you have the chance to grow or improve. Think about what resources you could better utilize to address your weaknesses or how you could get a competitive edge over others in your market.
- Threats: These are potential problems that could hinder your success. Often, threats are related to impending changes in your market that you’ll need to adapt to or competitors who are outperforming you.
This information can help you decide what type of organizational strategy to implement. You may choose a functional or focus strategy to narrow in on a core strength or opportunity or a differentiation strategy to address threats from competitors.
Define your company’s goals
If you haven’t already, it’s time to define your goals. If you already have a business plan and goals, it’s still an excellent time to refine them before crafting an organizational strategy to align with them.
When setting new strategic goals, it’s best to use the SMART method by creating goals that are:
- Specific: Narrow what you want to achieve rather than setting broader goals.
- Measurable: Define the metrics you’ll use to measure your success in achieving these goals.
- Achievable: Choose goals that can be realistically achieved with your available resources within the intended period.
- Relevant: Only set goals directly contributing to your long-term plan and business strategy.
- Time-bound: Set a clear timeframe for your strategic initiatives, such as a business quarter or fiscal year.
Implement your strategy
In the strategy implementation phase, you’ll share your organizational strategy with internal leadership and team members to get everyone on the same page about your company’s focus areas and goals.
Explain how you’ll allocate resources to support those goals better and what role each department or team plays in that process. Then, put it into action.
Regularly review your organizational strategy
As with any initiative, regular review is essential. You’ll need to check in periodically to see whether your organizational strategy is having the intended result.
You’ll also need to adjust it continuously, as new projects may pop up or market demands may shift, requiring you to change how you allocate your resources.
More resources:
Understanding organizational culture, and why it’s important 
Organizational health: Understanding its components and impact
Avoid legal issues with compliant job descriptions
