Corporate strategies

What is strategy? This question, which is both simple and profound at the same time, is at the heart of any business. In an ever-changing world, where uncertainty about the future is becoming the new normal, strategy becomes the key element that determines whether a company will thrive or get lost amongst a host of competitors. But how does one create a strategy? What should its elements be, and how do they fit together?

In this overview report, the SBS Consulting team examined the peculiarities of corporate strategies of international companies and the specifics of disclosing information about them. Information on the strategies of 50 large international public companies from 10 industries was analysed.

Strategy elements

Strategy is a high-level action plan aimed at achieving long-term goals while taking into account the uncertainty of the future. It requires a clear understanding of objectives, an understanding of how the business environment works, how to allocate resources and how to manage all processes. To help make sense of this, the so-called ‘strategy ladder’ comes to the rescue - a concept that organises the key elements of strategy and makes the strategy development process more structured.

1. Mission, vision, goals:

   Define the company's core purpose, shape the image of its future, and set the benchmarks for strategy.

2. Environment:

   Assesses customer base, priority markets, products, and sales channels.

3. Scenarios:

   Define the company's development paths, ways to achieve competitive advantage and integrate the various elements of the business.

4. Resources:

   Take into account the required competences, number of employees and amount of investment.

5. Management system:

   Includes organisational structure and key performance indicators (KPIs) for monitoring.

These elements form the basis of strategic planning and enable a company to adapt and grow in the face of uncertainty. In today's world, corporate strategy goes beyond purely financial goals. More and more companies are prioritising social responsibility and reflecting it in their missions. These missions serve as guidelines for business, setting the direction not only for internal processes, but also for interaction with society, customers and the market.

Strategies of large international companies

• Most large international companies focus their missions on society, emphasising the importance of sustainable development and social responsibility.
• Many companies develop missions that cover multiple aspects, including society, customers, company, and product, reflecting their aspirations to be of value in different spheres
• These results emphasise that corporate missions are becoming a tool not only for achieving business goals, but also for addressing social and environmental challenges, making them more multilayered and integrated.

The company's mission gives direction and meaning to its existence, but a mission statement alone may not be enough to create a complete strategy. To add depth to the mission and create a unique corporate culture, companies often supplement it with values and principles. These additional elements help to strengthen an organisation's internal identity and ensure its long-term development.

Values reflect the internal beliefs and traditions that define the company's character and support its strategic goals.

Principles provide order and rationality in the functioning of the company, forming the basis for decision-making.

Many companies reinforce their missions by complementing them with publicly stated values and principles. This helps to create a coherent image of the company and strengthen its connection with society, customers, and employees.

Case study

It is not uncommon, for example, for companies to outline a mission statement and reinforce it with a set of values, such as trust, effectiveness and commitment to change, to clearly communicate their core priorities.

Complementing the mission with values and principles strengthens its impact and makes the company's strategy more sustainable and understandable to both external audiences and its employees. This allows the company to stay true to its core beliefs, even in the face of change.

An important part of any strategy is the strategic goals, which help to realise the company's mission and move in the intended direction. These goals form the basis for planning and measuring success, and it is important that they are aligned with the company's mission.

There are three main types of goals:

1. Financial. Many companies set goals aimed at improving financial performance. This indicates a desire to strengthen market positions and increase profits.
2. Operational. Along with financial goals, companies focus on operational goals such as new product development.
3. ESG. Companies also focus on social and environmental initiatives such as sustainability and reducing their carbon footprint.

Companies frequently use a combination of different types of goals, allowing them to not only achieve financial growth but also address important environmental and social objectives. These multifaceted goals help companies not only achieve economic success, but also maintain sustainability and social responsibility, thus creating a harmonious strategy for long-term development.

Conclusion

In an era of increasing demands for transparency and openness in business, strategic information is becoming an important aspect of corporate reporting. Companies must not only comply with regulatory requirements, but also demonstrate their strategy and plans to ensure predictability and trust among investors and partners. The requirements of different regulators are similar in terms of the composition of strategic information disclosed, but not all companies publish important strategic information if it is not required.

An effective corporate strategy is a comprehensive approach that starts with a clearly defined mission and is complemented by meaningful values and principles. The company's mission serves as the basis for the development of strategic goals, which can encompass financial, operational, and social aspects. It is important that strategic goals are aligned with the mission and are aimed at the integrated development of the company.