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What Are Strategic Drivers?

        posted by , August 16, 2013

Strategies don't happen in a vacuum. They are influenced by a variety of external and internal strategic drivers.

Definition: Strategic Drivers

Strategic drivers are forces that shape an organization's strategy.

Strategies that fail to adapt to forces such as technological change, competition and regulations are a recipe for disaster.

strategic drivers

Strategies are shaped by both external and internal forces. External drivers include competition, markets, laws, taxes, customer needs and technological change. Internal drivers include profit goals, mission and office politics.

The following examples illustrate several common strategic drivers.

Strategic DriverExample
ChangeA chain of DVD rental shops must adapt to digital media formats.
ProfitsAn investment bank has achieved an average of 30% profit growth for 10 consecutive years. The firm is under great pressure to maintain or exceed this rate of growth.
PeopleBad publicity puts a fashion brand under pressure to be socially responsible when outsourcing to developing nations.
PlanetAn energy company faces pressure from employees, customers, partners and regulators to move towards a sustainable business model.
MissionAn internet search company is driven by its mission to make the world's information accessible.
EthicsAn organic food company establishes a set of sustainability principles that drives its strategy.
PoliticsA government institution has a culture of intense office politics that are the primary force that shapes its strategy.
Corporate CultureA sustainable building construction company attributes much of its success to its innovative corporate culture. Its executive management team validate each strategy to ensure that it aligns with the firm's culture.
Rewards & IncentivesThe executive management team of a software company seek strategies that maximize their incentive bonuses.
Regulations & TaxesNew regulations force an energy company to improve risk management practices.
MarketsThe price of gold increases dramatically. A mining company plans production increases.
Competitive ForcesAn electronics manufacturer ensures that its strategy prioritizes research & development to keep pace with the competition.
New TechnologyA car manufacturer adjusts its strategy when a competitor reveals new energy efficient technologies.
Customer NeedsA fashion brand keeps a pulse on ever changing fashion trends.
Opportunities & RisksA retail bank identifies a new type of investment product with significant market potential.

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