According to the GEM (Global Entrepreneurship Monitor) report, over 100 million start-ups are launched every year around the world. It is about 3 start-ups per second. With the advent of technology and easy access to the global market, building a company has become easier. A company with a strong business strategy becomes the winner and the one without a strategy would meet its doomsday inevitably. Hence, before building your company, it is important you have a clear vision of how you want to penetrate in the competitive business world.
What Is a Business Strategy?
The role of strategy in any business is important to its growth and brand establishment. A business strategy is a set of objectives or a high-level working plan to achieve growth and profit in the business. When the existing strategy does not work well, the company should change the approach and create a new set of strategies to sustain in the market. Hence strategies determine the company’s strengths, brand value, and revenues.
Each company has different strategies. It is about how they want to establish themselves and be identified in the global marketplace. For example, one brand may want to target the economically weaker sections by advertising their product to be the cheapest one while another brand may want to target the elite by showing the quality and luxury availed from their product or brand. Though they have the same purpose i.e. to earn the profit, their business strategies differ according to the target audience.
Why is Strategy Important in a Business?
Having a business strategy is not just to gain profit in a few years of establishment. A well-outlined strategy is important for sustainability. The business growth strategies should be created with the foresight of the future market and how the organisation can adapt to the changing market environment. A well-defined strategy is a guide to performing well against your competitor. It helps you identify the trends, business opportunities, customer behavior, technological changes. With a strong business strategy, you can adapt to those changes and increase the sustainability.
A business strategy gives a strong vision and direction of how the company wants to grow and communicating business strategy to employees is essential to instill a sense of shared responsibility.
How to Choose the Right Business Strategy
Building your business beyond the start-up level requires a clear focus and a well-defined strategy. There can be various strategies adopted by each company based on the objectives of the business. But there should be clarity on choosing the right strategy. Following are some of the strategies that can be applied to your business to achieve success.
Facilitating growth is the objective of this strategy and it is important to establish it by gaining a clear knowledge of the company’s strengths and weaknesses.
- The first thing would be to analyze the cost and revenue of the organization. Get a picture of profit and loss and which of the departments fair well and which one brings loss to the company.
- Identify the talents and skills in each employee and assign them to work according to their strengths and areas where they are specialized. This can deliver a steady output and good profit to your company.
- Get an understanding of who are your competitors and how can you compete against their business strategy.
- You must analyze if the market conditions are suitable for your business growth and if your company is prepared for inflations and vulnerable market situations.
Any business should operate with a clear vision and mission. The corporate strategy defines the market and businesses in which a company will operate. It gives an idea of why the company exists and what it is intended to become. Corporate strategy analyses the size of the marketplace, profitable goals, current social, political and technological environments and formulates actionable items to position the business accordingly.
Competition is one of the main reasons why we need a strategy in business. Competitive strategy is a long-term plan that is formulated to outperform the competitors by showing higher returns on investments. There can be multiple approaches towards this strategy. For example, one company may want to produce an item with all high-quality features and still sell it at a low price than their esteemed competitors. Some brands may want to set a benchmark in their product which no competitors can touch and some focus on making products for all segments of people based on their affordability.
Market research is an important component of business strategy. There are several market research companies that aid in setting the strategies for a company through research on market need, market size, competition etc. Popularly known as business development consultants, they study the consumers’ behavior and how the cultural, social and political factors influence that behavior. While carrying out the study, market research companies follow a systematic approach in gathering and interpreting information about individuals and organisations using statistical and analytical methods.
Establishing the Right Business Model
Once the strategies are set right, the entrepreneurs can focus on establishing a successful business model. Execute a pilot roll out to check the validation of the business model. It is helpful to test costs, pricing, and quality. Based on the result, make the corrections and plan for the major rollout.
Customer feedback should never be ignored as it is vital to make changes in the business strategy. Give extra attention to their opinions and work on the areas where you can improve the credibility of your business.
To establish the right business model, you can also get the help of business development consultants. They help companies identify challenges, weaknesses and come up with actionable solutions to drive business in the competitive market. However, small, medium or large your company, a business development consultant can help you monitor, review and analyse strategies in marketing, sales, advertising and other fields of operations.
With the numerous choices of business options available today, the success of your business model ultimately depends understanding what the customer wants and how you set the business strategy around it.