Successful companies revise their strategic plans to accelerate their growth, seek to gain a competitive advantage over competitors, post a merger or a major acquisition, etc.
Markets continually evolve. Customer preferences change. Technology disruption and innovation lead to the creation of new products or services. Global events, geopolitical upheavals, climate change, new leadership, and new ideas trigger the need to revise the strategic plan.
Normally, good companies revise their strategic plans every three to four years. These are not major strategy changes. Changes are undertaken to align the company to an altered market condition.
Let me illustrate the concept with an example from the IT services sector. Over the past twenty years, the industry has continually transformed itself. Some of the macro strategic changes undertaken by a section of the IT services industry are:
- Design development bespoke application development work
- Packaged Product Implementation
- Cloud and SAAS implementation
- Digital and agile transformation
- Blockchain and metaverse adoption.
The macro changes are evolutionary, like tweaking offerings in response to the changing conditions. The underlying business model is in the IT services sector, but changes to strategy have been made. Many of the strategic changes were accompanied by major organizational changes. Companies created sub-units with individual profit and loss accounts. These sub-units were empowered to hire resources and even to downsize.
Creation of near-shoring centers to leverage lower costs in time zones more convenient to major markets. Local hire numbers were dramatically raised to understand an important market better, improve client interaction and achieve overall efficiency. These strategic changes also responded to the political demand from these markets for localization. Corporations started involving themselves in local causes. It helped build relationships with local communities. It further led to a change in brand image from a foreign brand to a local brand. Listing in the local stock market was another strategy for responding to changing market needs. Changes influence the pace and frequency of change in strategy in customer perception, regulation, or both.