How to Develop a Business Strategy — Part 2
In the last part of this series, I covered 2 of the factors that we need to think of while developing a strategy in an uncertain environment. Here is the link
In this article, we will discuss the rest of the factors that we should keep in mind while developing a strategy.
So let’s get started
Political Factors
Though we have been enjoying the effect of globalization so far in different aspects of life and business, there has been a rise in the antiglobalization movement. And the target will be always multinational companies.
The 3 forces that act on behalf of the antiglobalization aspects are enviromental, social, and ethical concerns. Those 3 forces will always come as pressure to enact specific legislative actions.
The strategist also has to pay special attention to the cyclic nature of globalization and anti-globalization. It was only a few decades ago that globalization was held by many, even by some critics, to be an inevitable, unstoppable force. “Rejecting globalization,” was like “rejecting the sunrise.” In that case , the reverse psychology has to be in a leader's thought process to pan out an optimized strategy for the company.
Environmental Factor
Automotive Sector is a perfect example of getting hard-hit by environmental factors. Because ignoring the impact of climate change, they have incurred both costs and lost opportunities in the new market. Tesla’s valuation is a slap on the face for traditional automotive companies.
The environmental factor can impact terms of profit and capital cost, and penal taxes and emission limits. And most of all, long-lasting damage to the brand value is viewed as environmentally irresponsible.
So a strategy should include provisions for preparedness to change vs the level of severity of the environmental risk.
People Factor
Human Resources/ Talent is one of the tenets of the modern organization. It is loosely tied to the demography but also need to be considered separately while developing a strategy.
As an example due to the recent work from home policy surge across the world, employees need more flexibility to choose where they want to work from. Obviously, the constraint is whether the job function can be performed remotely.
So the strategy should always have to focus on liberating and rewarding the employees based on their real values, not necessarily based on their hierarchy.
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