What Are The Three Essential Types of Business Strategy? (2024)

Clear, well-defined strategy is essential for a business’s success. Without a detailed, thoughtful strategy, a business can wander through the wilderness. Within the domain ofwell-defined strategy, there are three uniquely different and crucialstrategytypes:

1. Business strategy
2. Operational strategy
3. Transformational strategy

These three different strategies are crucial for a business’s success. While they are distinct entities, it is worth noting that a common consideration across all types of strategy is yourpeople, process, and technology. Without this, strategy is a set of lofty ideas, ungrounded in reality and unaccompanied by a plan of action. Connecting “lofty ideas” to practical, well-thought-out steps is the key to successful strategy implementation.

Let’s look further into each of the threetypes of strategythat are key to a business’s success.

1. Business Strategy: Customer Experience

The first of the three types of strategy isBusiness Strategy, which focuses on how yourcustomer will experience your business. It is primarily concerned with how a company will approach the marketplace and asks questions like “Where do we play?” and “How do we win?”

“Where do we play?” covers questions like:

• Which customer segments will we target?
• Which geographies will we cover?
• What products and services will we bring to market?

“How do we win?” covers questions like:

• How will we position ourselves against our competitors?
• What capabilities will we employ to differentiate us from the competition?
• What unique approaches will we apply to create new markets?

Senior managers typically create the business strategy. After it is created, business architects play an essential role in clarifying the strategy, creating tighter alignment among different strategies, andcommunicating the business strategyacross and down the organization clearly and consistently.

Executives are just beginning to bring advanced, highly credible business architecture practices andpurpose-driven CX designinto the strategy discussions early to provide tools, models, and facilitation that enable better strategy development.

Resource: Check out our ebook “How to Design an Elevated Customer Experience” to discover tools you can apply to your business strategy for a customer-centric business model!

2. Operational Strategy: People & Process

The second of the three types of strategy is Operational, which focuses on yourpeople and your processes. It is primarily concerned with accurately translating the customer-centric business strategy into a cohesive and actionable implementation plan.

Operational strategy answers questions like:

• Which capabilities need to be created or enhanced?
• Which processes need improvement or a complete redesign?
• Do we have the people we need, and do they have the right skill base? (Ex: talent retention plans throughStrategic Learning and Developmentprograms.)

Resource: Interested in employee retention and talent development as a part of your operational strategy? Download our latest ebook, “How to Do Strategic Learning and Development“!

Most business architects are currently working in the operational strategy domain, reaching up into the business strategy domain and communicating with leadership for direction.

They work from the middle out to bring clarity and cohesiveness to the organization’s operating model, typically working vertically within a single business unit while resolving issues at the business unit boundaries. More mature business architecture practices work cross-functionally and in multiple verticals or move from one vertical to another. Leadership and business architects who are successfully delivering in one role should be actively developing the skills they need to move into other strategy domains.

3. Transformational Strategy: Platform Technology

The third strategy type is Transformational, which focuses on how yourtechnology can enable and transformyour organization. We aren’t talking about automation… we are talking about true digital business model transformation. It is seen less often as it represents the wholesale transformation of an entire business or organization.

This type of strategy goes beyond typical business strategy, requiring radical and highly disruptive changes in people, processes, and technology.

Transformational strategy is generally the domain of the Project Management Office (PMO), organizational development, and consultants. Few organizations go down this path willingly and with a reasonable expectation of the resources it takes.

These efforts are incredibly complex and require highly experienced and knowledgeable technical resources. At Accelare, we called themPlatform Design Engineers. There is also a significant benefit from applying business architecture discipline though it is rare to see business architects playing a considerable role here.

What is the Bottom Line?

Not all strategy work is the same. Each strategy type requires a unique set of skills, resources, varying approaches, and plans to execute that strategy. Here at Accelare, we are experts in working with businesses of any size to develop successful strategies for transformation, operations, and business. Use our expertise to create a competitive advantage for your business today.