Strategic drivers are factors that influence the success of an organization’s strategy and shape the direction of its business. They are typically long-term trends or developments that have the potential to impact the organization’s competitive position, revenue, and profitability.
There are several types of strategic drivers that organizations should consider when developing and implementing their strategies:
- Market trends: These are changes in the market that can affect an organization’s ability to compete, such as shifts in consumer preferences, technological advancements, and economic conditions.
- Competitive landscape: The competitive landscape refers to the other organizations in the market that offer similar products or services. Understanding the strengths and weaknesses of competitors can help organizations identify opportunities and threats and develop strategies to differentiate themselves.
- Internal capabilities: An organization’s internal capabilities, such as its resources, skills, and culture, can influence its ability to execute its strategy and achieve its goals.
- External factors: External factors such as regulatory changes, political instability, and social trends can impact an organization’s strategy and business operations.
By considering these strategic drivers, organizations can identify the key factors that will shape their business and develop strategies that are aligned with their goals and objectives. This can help organizations stay competitive and adapt to changing market conditions. The following are common strategic drivers:
Many organizations are driven to build a particular brand image and experience.
Competitive threats such as a price war or innovation by a competitor.
The need to defend and build capabilities that allow you to compete such as innovative products or cost leadership.
Changing costs due to factors such as inflation, commodity prices and foreign exchange.
Shifting customer preferences such as fashion trends.
A long term competitive advantage that is difficult for the competition to challenge.
Economic forces including growth, interest rates and inflation.
Primary goals such as revenue and sustainability.
Governance is the practice of directing an organization in the interests of stakeholders including owners, creditors, employees, customers and the communities in which an organization operates. The interests of stakeholders is a fundamental strategic driver.
The forecast or predicted direction of an industry.
Location is a competitive factor that may shape strategy. For example, a superior location such as the only restaurant in a small airport is likely to affect pricing strategy.
Competition in pricing, products, promotion and distribution.
Mission & Vision
The purpose and direction of your organization.
A strategy typically needs to account for your corporate culture. For example, the level of resistance to change that might be expected.
Aligning with or complimenting the strategy of partners.
Guidelines that an organization has adopted to direct strategies and decisions.
Opinions and values of the communities in which you operate.
Laws and regulations or anticipated future regulations.
Building or protecting a reputation.
Acquiring or retaining resources such as skilled employees.
Potential for losses associated with actions or inaction.
Security threats such as malware and hackers.
Security vulnerabilities such as software bugs or a lack of information security awareness amongst employees.
Preventing harm to people and planet.
Current and future tax efficiency.
Technology change may allow for new efficiencies or may represent a threat to existing business models.
An organization’s values such as respect for employees, customers, communities and the environment.
Weather influences strategy in many industries, particular those that involve outdoor work such as construction.