Determining strategic direction is one of the most fundamental challenges facing a business owner, executive and board of directors.
It is only when overcoming the challenge of determining the strategic direction that a business owner, executive and board of directors can deal with the other challenges.
Strategic direction consists of:
With a strategic direction determined a business owner, executive and board of directors can move on to drafting a business plan.
Strategic business and financial planning are critical to the success of any company.
There is also constant pressure on all companies to continue growing and expanding.
Strategic marketing and planning is also key to building a smart growth strategy. It allows the development in a number of crucial ways:
Strategic direction and business strategy are evolving.
Those that were the right decisions at one stage may make less sense as time passes. This is why business owners, executives and board of directors must closely monitor and analyse company performance.
Financial challenges are some of the most difficult to meet.
Securing funding is also arguably the biggest financial challenge for any scaleup or SME if the right level of financing is not achieved then the business will not be in a position to grow.
Every business leader wants their profits to be as high as possible and profit improvement is something that every business owner, executive and board of directors needs to focus on. The challenge for any board is to create a clear, direct and measurable strategy to ensure that profits are maximised.
A well-judged and successfully executed merger or acquisition can also represent a rare opportunity for a business. It can deliver a huge injection of capital and ensure financial security.
If a board makes the wrong decisions as regards a merger or acquisition, it may cause serious damage. and Ill-conceived deals can lead to a downturn in customer confidence, sales and the overall value.
It is also difficult to plan a proper exit strategy, many business owners, executives and board of directors are so preoccupied that they never consider their exit strategy. Others simply do not recognise exit planning as a financial challenge they need to meet. This can also have a serious financial impact when an exit takes place.
It is important to develop an exit strategy, even if plans are often put into place three, five or even ten years before they are enacted.
In that way, there is sufficient time to best position the company for sale.
If a business owner, executive or board of directors is not thinking about a future exit strategy, they may fall behind.
The smart use of resources is key to any business.
That is true for human resources as much as it is for financial ones. Business owners, executives and board of directors must find a way to get the most from all resources. That is a fundamental operational challenge for any business.
The best business models are also proactive when it comes to risk management. Their risk management and legal strategies head off problems before they arise. The strategies are key to ensuring the business model operates successfully in the long term.
Businesses must hold themselves accountable to ensure fairness. Corporate governance is the means to do this. It also protects stakeholder values and interests at the same time. The challenge is to create a transparent and equitable corporate governance structure.
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