Strategic Drivers

Strategic Drivers

Strategic Drivers Jonathan Poland

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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:

Branding

Many organizations are driven to build a particular brand image and experience.

Budget

Budget constraints.

Competition

Competitive threats such as a price war or innovation by a competitor.

Competitive Advantage

The need to defend and build capabilities that allow you to compete such as innovative products or cost leadership.

Cost

Changing costs due to factors such as inflation, commodity prices and foreign exchange.

Customer Preferences

Shifting customer preferences such as fashion trends.

Economic Moat

A long term competitive advantage that is difficult for the competition to challenge.

Economics

Economic forces including growth, interest rates and inflation.

Goals

Primary goals such as revenue and sustainability.

Governance

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.

Industry Trends

The forecast or predicted direction of an industry.

Location

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.

Markets

Competition in pricing, products, promotion and distribution.

Mission & Vision

The purpose and direction of your organization.

Organizational Culture

A strategy typically needs to account for your corporate culture. For example, the level of resistance to change that might be expected.

Partners

Aligning with or complimenting the strategy of partners.

Principles

Guidelines that an organization has adopted to direct strategies and decisions.

Public Opinion

Opinions and values of the communities in which you operate.

Regulations

Laws and regulations or anticipated future regulations.

Reputation

Building or protecting a reputation.

Resources

Acquiring or retaining resources such as skilled employees.

Risks

Potential for losses associated with actions or inaction.

Security Threats

Security threats such as malware and hackers.

Security Vulnerabilities

Security vulnerabilities such as software bugs or a lack of information security awareness amongst employees.

Sustainability

Preventing harm to people and planet.

Taxation

Current and future tax efficiency.

Technological Change

Technology change may allow for new efficiencies or may represent a threat to existing business models.

Values

An organization’s values such as respect for employees, customers, communities and the environment.

Weather

Weather influences strategy in many industries, particular those that involve outdoor work such as construction.

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