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Strategy

strategy overview

Overview of the company’s strategy – its long-term goals and plans on how to get there – provides benefits internally and externally. Internally, it helps executives and employees in the day-to-day management, and it provides guide post for the board’s oversight. Externally it helps investors, business partners and other stakeholders better understand the company and how it plans to create value.

Recommended Disclosure

01
description of long-term strategy

Describe what the company plans todo, how it conducts its activities and the expected results and impacts.

⇒ Explain how it will capitalize on strengths and address weaknesses to ensure greater success and profitability

INSIGHT  We want to be number one in all the markets we operate in” is not a strategy—it’s a goal. A strategy includes a thoughtful plan for how the company is going to move forward

02
Management review

Management overview (typically from the CEO) of the strategy and explanation of progress and setbacks in the implementation of the strategy, and any change of plans.

⇒ Introduces the rest of the strategy report, including strategic objectives and KPIs, risks analysis and the sustainability issues facing the companies.

⇒High-level review of performance on the company’s targets and KPIs

Definition Strategies

Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. (Chandler 1962). Good strategy is not just “what” you are doing, but “how” and “why” you are doing it. Just as a lever increases mechanical advantage, good strategy focuses sources of advantage on specific challenges
(Rumelt 2011).

type of strategieselements of strategy reporting

Growth

Businesses doing well generally have a strategy to grow their market share in existing markets and expand in other markets.

Transformation

Sometimes, companies must change their business models as a result of changes in technology, industry dynamics or consumer preferences.

Elements of Strategy Reporting

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Examples Of Reporting
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Strategy Overview—Toyota 2018 Annual Report

Toyota is pursuing a transformation strategy towards a mobility company, as electric and self-driving cars change the opportunities and risks for car manufacturers. According to the CEO: “over the past century, an estimated 15 million horses in the United States were replaced by the same number of cars. We may now be facing a paradigm shift of equal, if not greater, magnitude.”  

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Strategy Overview—ENBW 2019Integrated Report

In this example, German utility company ENBW describes its strategy to adapt to the evolution of the energy sector, describing its internal transformation toward the development of renewable energy while reducing conventional energy generation.

Strategy and Forecast—ENEL Integrated Annual Report 2020

In this example, Italian utility company ENEL describes its strategy long-term strategic plan to 2030 to position the company for the energy transition, mobilizing 190 billion euros of investments.