Business strategy may be defined as the means by which a business sets out to realize their desired objectives and to grow and make it realize profits. It may also be described as the long term plan for the business. A good strategy should cover a period of three to five years after which it is reviewed. The main reason for reviewing the strategy is because of the need to set other objectives after realizing the initial set objectives.

Before setting up to creating a business strategy, it is important that the management must understand the following two things. The first one is to understand the challenges it is facing which prevents it from being profitable. The other one is the knowing and anticipating where you want the business to be in future.

The identification of the problem may be challenging if you do not know how to go about it. The best way to do this is by answering the question why the challenge exists. At times the problem at the face of the company may just act as an indicator to show the existence of some fundamental challenges.

For instance, the poor sale may be as a result of poor marketing techniques or competition or even pricing. In order to reach at the fundamental problem, you should ask the question why until you reach a point where there is no further reason to answer the question why? After identifying the fundamental problem, it is now very easy to look into possible ways of addressing the problem. This then forms part of the strategy.

But at the face of it may be recording poor sales as a result of poor marketing strategies. You should therefore first ensure that there is accurate identification and understanding of the challenge as the first step towards creating an effective business strategy. The second guideline entails the formulation of action oriented solution to address the identified problem.

The general solution may be to add value to the products and also to make them look different from the other products in the market. After establishing the general solution, you should go ahead and make other specific solutions to address the other problems which enabled you to identify the fundamental problems.

If the main action is in regard to creating differentiation and adding value, some of the specific actions may include surveying what the customers are likely to need, creating a department in charge of research and development, and also rebranding the product to give it a new look.

The specific strategies are closely related and their overriding objective is to rectify the problem which affects the company. The objective of the strategy in this instance will seek to elevate the value of the goods and services in the eyes of the customers by knowing what they want and communicating the value of the products to the market in an effective way. This is the business strategy that works.