What Is a Business Strategy? An Overview
The future is not detached from the present. If you want make an accurate guess of where you business will end a few years down the road, all you need to do is answer this simple question: How Do You Define your Business Strategy?
If your business strategy isn’t clearly defined, that you will find impossible to develop and achieve growth, while also failing to meet your personal goals as an entrepreneur and business leader.
The Way to Succeed in a Business
There are a dozen ways to achieve success in business, but at the core is the fact that you should be realistic, both about what you can achieve with your existing resources and what opportunities the market has to offer. It starts with the realization that it is simply not possible to be all things to all people. And while being the market leader is an aim that all business should work towards, that is not the only way to achieve long-term success.
The key is to focus on your strengths, curb the weaknesses, and find a way to leverage these strengths to oust competitors. And this is where your business strategy helps you out.
Specifically, business strategy defines what needs to be done to meet business goals, which also mean that it helps you make sound decisions related to hiring (and firing) and resource allocation. And while all departments need to work independently and innovatively, a business strategy ensures that that there is no conflict between what each department is doing with the overall direction of the organization.
In short, your business strategy is a summary of how your business plans to achieve it goals and improves and sustains it position in the industry. This can be a short single page full of bullet points or a complete booklet that defines the purpose of the business, its strengths, target market, and product line-up.
The Need for Business Strategy
In almost every case, it is ideal to retain customers than to constantly chase new ones. And this is one major area where business strategy is extremely necessary. In the absence of a sound business plan, you will find it hard to generate customer loyalty. Businesses that have no specific guidelines on how to cater to existing customers risk alienating the later, and a competitor can easily snatch them out of your hand just by emphasizing on customer service.
So, what you need to do is develop a robust system of follow-up where calls are made and emails are sent to repeat customers not only to ensure that their products are operating properly, but also to let them know that your business cares for them. And depending on your line of your business, you can also send greeting card and gifts to repeat clients on occasions like Christmas.
Another place in which a business strategy comes in handy is resource allocation, as mentioned in the opening. Your business, no matter how big, will always have limited resources on hand, which necessities the need of efficient management so that these resources can be used with maximum efficacy. A sound business plan helps you weave together resources like employees, brand value, clientele, trademarks, and supply partners etc, to achieve a competitive advantage and also create products and promotion that speaks directly to your target market.
If resources are not managed efficiently, then the business is likely to lose both revenue and customers in the long run.
Thirdly, business expansion is also a goal which cannot be achieved without strategy. If your expansion goals are laid out in great detail, then it will help team leaders and executives to explore opportunities outside of your standard business practice to facilitate company expansion. You will be able to set aside budget and hire appropriate people for market research that can not only collect and collate data, but also analyze trends to help you spot untapped niches.
The How-to of Business Strategy
Now that you know what a business strategy is and why it is so important, let us now go over some pointers on how to deal with this essential process in the best possible manner.
It is all too natural to assume that you have created the best strategy for your business. However, today’s economic climate doesn’t allow you to relish on these mistaken notions of perfection. Just see how the business landscape has changed in the last 10 years or so due to the onslaught of social media and hand-held devices. If you were in before the age of Web 2.0, then you are living in the past. Any start-up of this era can give you a run for your money.
So, even if you are running a family business for the last 3 generations, never let go off your critical mindset. Question all assumptions and always encourage brainstorming.
Focus on Results
This follows from the previous point. When you set goals for your business, and strategies to achieve these goals, also have a realistic time frame in which you can expect outcome. If nothing materializes, then you need to go back to point 1, i.e. question your assumptions and brainstorm for new ideas.
This is the trial and error mindset that should drive your business. When you learn to take corrective action at the right moment, you are keeping yourself from amassing serious business issues in the long run, such as hiring the wrong kind of people to run your business.
Finally and most importantly, maintain a healthy balance between planning and action. While business strategy is necessary, but when you sit down to plan every point in needless detail, you are just wasting your resources. Your goals and strategies are not holy writ. They are not divine injunctions that you need to follow or else!
Never paralyze yourself by over planning. When you are operating in a competitive environment, every second counts. So learn to make decisions and implement them. If they work, well and good, and if not, then you should revamp your business strategy.
Image: everything possible/Shutterstock.com