What is business strategy and tactics? How to build and execute business strategies effectively? This is a question that 87% of businesses in Vietnam have a headache without an answer. Please read this article to the end to understand and feel the problems through 6 detailed steps to guide the development and implementation of a business strategy shared by Business Coach TOP10 Southeast Asia – Coach Thomas Trinh Dang Khanh Toan.

What is Business Plan? What is business strategy and tactics?

Strategy is a set of choices used to achieve an overall goal, while tactics are the specific actions used when applying those strategic choices.

If there is a strategy without a strategy, there will be no concrete action.

If there is a strategy but no strategy, there will be chaos because there is no overall direction to guide the way.

In an organization, strategy is decided by the senior board of directors, and department heads’ tactics are implemented by junior officers and employees.

Business Coach Thomas Trinh Toan shares the topic “Building and executing excellent business strategies”

What is a business plan? 

Plans can be ‘programs of action’ or any ‘lists’, ‘diagrams’, ‘tables’ arranged in ‘schedules’, with ‘terms’, divided into ‘phases’, steps, ‘time’, with allocations of resources. , setting specific goals and determining measures, preparation and implementation in order to achieve a set goal or target.

Usually a plan is understood as a period of time in which we intend to act and through which we hope to achieve a goal.

Talking about a plan is talking about people who plan but do not do it, but they contribute to the results achieved as planned by the plan.

What is Business Strategy Execution?

There are many different definitions of  strategic execution. The trick we use is to approach decisions in 2 steps.

First, there will be one overall decision – one big choice – that drives all other decisions.

To make a big choice, we need to decide where to focus – the target customer segment – and how we need to deliver our unique value to our customers.

Those are the basic strategies. But built in this way, it helps us to better understand the second step, the decisions made in the following days – the small choices – that can help us get closer to the finish line. When these small choices are identical with the large selection, we get a CDOE model according to Mintzberg.

So, if the strategy is a model in the chain of decisions,  strategic execution will allow us to create the model of decision making.

In other words, strategy execution will help us to identify small choices with big choices. That’s the real business coach’s definition of strategy execution.

So what really is strategy execution?

Strategy execution is the bridge between a good strategy and corporate performance.

Strategy execution is a broad domain involving many processes and all functions of an area.

Strategy execution has its own rules. Making a strategy work is not the same as building a strategy. Those are different games with different rules, even unexpected difficulties.

Strategy execution involves everyone. From executives to workers, everyone is involved in strategic execution. Their roles may vary, but they all contribute to the collective implementation effort.

Strategy execution takes time. We can develop a strategy in a few weeks (or months at most) but to implement the strategy  can take years. It’s like sprinting with marathon running.

Strategy execution requires both short-term and long-term thinking. While implementing, we need to manage both the long-term execution plan and worry about the actual action to take the next day.

Strategy execution requires a specific set of behaviors and techniques that companies need to master in order to gain a competitive advantage. That is considered a separate rule. (Charan & Bossidy, Execution)

Good  strategy execution  requires a good strategy. Without a good strategy, the implementation will not survive. No amount of good execution can compensate for a poor strategy.

Strategy execution is not something we will worry about after we have outlined our strategy. We need to think about implementation while formulating strategy.

Strategy execution includes a solid timeline. We won’t do everything at once. The order in which work is done is important.

Strategy execution requires a seamless integration between business and personal performance. We can look at the performance of a business or an individual. But in order to implement your strategy , the connection between the two is very important.

Strategy execution  accounts for a large chunk of performance in most businesses. According to the Harvard Business Review, businesses often lose between 40 and 60 percent of their potential strategy in the implementation phase.

In many businesses, the strategy execution  is still a black box. They put their strategy on one end and create performance on the other.

Strategy execution requires a measure. Businesses need to start by understanding the high-performance stages of strategy execution. Benchmarking will help a lot.

It takes time to build capacity strategy execution. It usually takes small businesses 18 months to build their best strategy execution capacity. For large multinationals, it can take several years to get there. We should have a long calculation.

Strategy execution will provide many new opportunities to create competitive advantage.

Make sure your business is at the forefront to fully exploit the opportunities.

Strategy execution is an important part of a leader’s role and is required, leadership is needed to ensure successful strategy execution..

Unfortunately, for a variety of reasons, some managers—strategic travelers—see “strategy execution” as something everyone else should do, and they will focus on the “more important” things.

Strategy execution needs leaders, commitment, and serious consideration of taking on challenges and getting things done.

The importance of a business strategy? What is business strategy and tactics

“Without a STRATEGY, PLAN, an organization, business  is like a boat without a driver and will go OUT…” a ship has no fixed route and nowhere to go.. .

With Destination, you can create a plan, and with a plan, you can determine if “on the right track” or “off the road”. When you “go astray” you revise your course and keep correcting as needed, you will eventually reach your destination.

Why develop & execute excellent business strategies?

To make a big choice, we need to decide where to focus – the target customer segment – and how we need to deliver our unique value to our customers.

Clearly define the CORE PURPOSE of the business from the outset.

Consolidate large and small decisions to decentralize, delegate authority and in situations where consensus on decision-making is needed.

Create a unified decision model of the construction and investment for the enterprise system.

Prepare a plan for a long-term financial plan allocation.

Weaknesses of Vietnamese enterprises when implementing corporate strategies

73% of Vietnamese companies said that: “Difficult in Operational Administration” due to the level of personnel, allocation and use of resources (5M) of the company.

87% of actual SMEs: “Ideas and strategies have – but cannot be turned into reality” due to low long-term commitment, disorientation and “forgetting” the core purpose of the business (CS Insight) 2019)

In the first 7 months of 2022, nearly 95,000 businesses left the market, accounting for more than 10% of the total number of businesses across the country (Cafe F)

It shows that companies have not focused on long-term strategy, have not prepared for the long-term strategy implementation.

And the inevitable result is that it will not be able to survive in today’s competitive market.

Key elements for a successful Business Strategy implementation:

According to statistics by CS Insight in 2019, in order to successfully execute a strategy or business plan, a business needs to focus on allocating resources on four factors: People; Strategy; Execution and Finance, where:

Humans make up 15%

Strategy accounts for 15%

Execution accounts for 50%

and Finance accounted for 20%

The above analysis shows that Strategy Execution is extremely important for the sustainable development of a Company.

What are the essentials for building and Executing an excellent real-world business strategy?

Analyze internal factors that come from within the business

Include:

1. Core purpose (=> Vision)

2. Core Values (=> Mission)

3. “Rules of the game” => Enterprise cultural values

4. Goal (1-3-5-10 years)

5. Roadmap (strategic map) => Test and measure

6. Strengths – Weaknesses (SWOT)

7. Resources Available (5M)

8. Source of information access & processing

Analyze the factors of the external environment that affect the operation of the business.

Include:

1. Opportunities and Risks (SWOT)

2. Suppliers – Customers – Competitors (5 FORCES)

3. Elements of the business environment according to the PESTEL model, including:

3.1.Political Factors

3.2.Economic factors

3.3.Social factors

3.4.Technological factors – Engineering

3.5.Environmental factors – weather

3.6 LEGAL Element

Where to focus on building an excellent real-world business strategy?

1. Business development in real business strategy

Includes: targeted marketing activities; sales activities to the right segment, right audience, right quantity and always aiming to increase revenue and customer service activities

2. Building a business strategy in real situation

Businesses need to focus on: Assessing opportunities outside the market; build leverages to increase profits; the ability to expand the market and expand the business scale on the existing product lines; and finally, measure the market volume forecast to see if it’s true to its core purpose.

3. Core purpose, corporate vision?

What are the recognized core values of the business? What values can be turned into Corporate Culture? Turn into a slogan for the community to easily remember the business? What contributions and values will the business bring to the community, society and the country?

4. What is the execution factor that makes the strategy Excellent?

Execution includes operating, building standard and effective processes, adjusting processes more and more quickly, saving time and costs for businesses, bringing higher and higher profits. Accompanying is financial management, the most effective budget management based on industry factors.

5. Personnel and team factors:

This includes recruiting, training, retaining and developing human resources. In addition, senior leaders always have to promote and practice leadership capacity, foster the next talent to transfer power, delegate authority and share benefits commensurate with contributions.

6. Use the Map tool 5 steps to build a successful and sustainable business.

See more about 05 steps to build a Successful and Sustainable business here.

06 Steps to Build and Execute an Excellent Business Strategy:

The CDOE model describes the six steps of business strategy building and execution excellence developed by Mintzberg.

Step 1: Develop strategy – business planWhat is business strategy and tactics

1. Determining CORE PURPOSE, Core Values of Business Owners

2. Strategy analysis (based on WHAT – analysis factors when developing strategy)

3. Identify strategic changes (from… / to…) and roadmap to achieve the OBJECTIVE

4. Develop and establish a Strategic Plan

The actual model 1 client company aims to determine the current change is as follows:

The company then set up – selected 07 strategic issues to change, arranged according to the balanced scorecard, as follows:

Strategies Related to Finance:

1. Revenue and profit growth: Growth target / after 5 years increase by 10 times revenue and profit.

Strategy related to Customer aspect, including 03 strategic issues:

2. Clearly define the target customers; How does the company increase revenue / Profit per customer; How does the company attract new customers.

Aspects related to Internal Process

3. Sales: What is the minimum margin strategy to achieve? How to gain leadership and expand in the Construction industry?

4. Purchasing: Choosing to buy raw materials and choose products according to what criteria? What do we need to do for quality products? What do we need to do to make the product always well received by the market?

5. Customer service: How many warehouses and branches do we need? How is transportation for customers optimal? What is the service standard at stores and branches?

6. Availability of goods and capital adequacy: Inventory norms in regions? Regulations on sales – delivery – payment cooperation?

Aspects related to Human Learning and Development:

– What is the company’s specialized work group?

– What is the size and organizational model when covering the whole country?

– How do we have enough numbers and international-class personnel?

Step 2: Plan your business strategy What is business strategy and tactics

1. Set up a strategy map.

2. Measures and indicators (using  BSC, OGSM tools)

3. Develop and select a list of initiatives and plans

4. Set a budget to execute the strategy.

Describing the story of the above enterprise, from 07 strategic issues, the company’s leadership has built a Strategy Map as shown below, including 03 strategic topics combined with 04 aspects of corporate governance. according to the Balanced Scorecard.

In this strategy map, the Company has established key strategies to solve at the same time and in turn 07 strategic issues they want to improve in step 1.

At the same time, they have developed performance measures (SMARTs) and targets to be achieved. Indispensable in the strategy map are the actions and initiatives that must be taken to improve efficiency. Finally, budget planning to turn initiatives and actions into effective implementation.

Step 3: Adjust personnel structure, organizational structure Implement business strategy

1. Organization chart – operation: assess the level, capacity, quantity and quality to see if it is capable of changing, operating according to new trends to improve results or not?

2. Business units and departments: Is it possible to meet, train or hire new?

3. Support units and departments: Add or remove? More training or change?

4. Personnel team (quantity / quality):

5. Supplier portfolio: Is it consistent with the company’s new strategy?

Step 4: Make an operation plan Implement the business strategy

1. Improve key processes

2. Business plan / sales plan

3. Identify and plan Resources: assess the company’s ability to respond to the strategy, serving the sales work.

5. Building communication/information system

Step 5: Monitoring and Researching Business Strategy Execution

1. Strategy review – Strategy review

2. Evaluation of the Implementation Plan – Operational review

3. Check and adjust the strategy

Proposing the frequency of meetings to check and evaluate quarterly, monthly and weekly. There are 03 types of meetings that should be held periodically:

Strategy Review Meeting

Is the company executing its strategy well?

Objective: Monitor and manage strategic initiatives with metrics and indicators (BSC, OGSM)

Contents of the meeting: Monitoring by topic, Monitoring of list of initiatives, Monitoring of topic groups, Management of schedule.

Recommended meeting frequency MONTHLY.

Strategy Implementation Review Meeting

Are the Company’s activities under control?

Objective: Monitor and manage short-term strategic and financial implementation performance…

Contents of the meeting: Analyze change, Evaluate KPIs, Solve team problems, Review monitoring program, Check key factors

Meeting to check and adjust the strategy

Are our strategies Effective?

Objective: To periodically evaluate whether hypothetical outcomes are playing out as predicted…

Contents of the meeting: Research and analyze data, Evaluate profitability (costs/Customers), Check and analyze cause-and-effect relationships, Evaluate emerging strategies.

Step 6. Check and Adjust  What is business strategy and tactics

Implementation Feedback helps test strategy

Metric-driven implementation testing

Measure Year / Quarter / Week / Day

Main tools:

– Year plan (Revenue, profit, cash, variable costs, fixed costs…)

– Action Plan 90 days (Action Plan 90 days)

– Success tracking book, to do list towards long-term goals.

Adjustment: it is the lever

Meeting Processes for Effective Execution of a Real Business Strategy

Meeting process according to the LION formula:

L = Last Period: evaluate the work done

I = Improvement: the work to be improved

O = Obstacle: Obstacles and Focusing on Solutions

N = Next Period: Next Actions / Action Plan

Meeting process according to the POST formula:

P = Purpose: The main purpose of the meeting

O = Outcomes: things to improve

S = Structure: How to meet, interact, discuss…

S = Structure: How to meet, interact, discuss…

09 essential elements Business owners need to execute an excellent business strategy

1. Develop Action Schedule to implement the Strategy and Plan

+ What is happening in the present and future prospects?

+ What requires a lot of time and personal attention of the business owner?

+ What can be delegated to others?

2. LEADERSHIP “Strong Leadership”

3. Building  working environment,  organizational culture in line with the strategy

4. There are rewards and incentives for achieving key strategic goals

5. Allocation of resources (5M) to strategically important activities

6. COMMITMENT Establish appropriate policies to support the strategy

7. TEST & MEASURE Apply best practices and drive continuous improvement

8. Build an ENVIRONMENT with the necessary capabilities, capabilities and resources to successfully execute the strategy

9. Building and training to have an information and operational system to help company employees better perform their strategic roles

Who can help you develop and execute a business strategy?

Business Coach, Business Coach I Executive Coach with 20 years of practical experience Thomas Trinh Toan will help Business Owners do this.

Please immediately contact hotline: 1900 2929 44  and key 3 for advice. Or phone number 0868 77 3939 or email to support@actioncoach.edu.vn.

Thank you very much for your cooperation. What is business strategy and tactics