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The goal of every business is to achieve lasting growth. Unfortunately, many entrepreneurs don’t realize the importance of business strategies to help them hit their targets.
Business strategies are powerful tools that help you take on inevitable challenges. It also serves as your guide in making important organizational decisions.
However, creating a solid business strategy to set you up for growth and success is no easy feat. It takes time, effort, and critical thinking.
In this article, we will let you in on the most effective business strategies that will inspire you to take your company to new heights.
What is a Business Strategy?
A business strategy covers the plan of action of your company to achieve your vision and objectives. It guides your decision-making processes and improves your stability in today’s hyper-competitive market.
You should consider your business strategy as the roadmap of your business. Without it, you can’t achieve your goals, and you will end up getting lost in the crowd.
Elements of a Good Business Strategy
Here are the important components of a business strategy.
Vision, mission, and values
Your goal as a leader should be to enable everyone in your company to share a collective mission and vision. These documents come in the form of a short written statement.
But what do these focus on?
First, your vision must be future-oriented and geared towards your aspirations and purpose.
On the other hand, your mission is focused on your investors, customers, and employees. Meanwhile, your values may cover environmental awareness, mutual respect, and many more.
Any entrepreneur knows how crucial a SWOT analysis is. This stands for:
S – strength
W – weaknesses
O – opportunities
T – threats
When you dedicate time and effort to perfecting your SWOT analysis, you can easily find organizational, marketing, and financial gaps to fill, among many others.
More than that, you can also take advantage of the data to stand out from your competition.
When it comes to developing a business strategy, you need to come up with a series of objectives you need to hit. These objectives typically need to be achieved in a 3-5 year period.
Strategic objectives cover the major goals of your company, and it also clearly details what your company should do to be able to achieve these goals.
As always, do not forget to communicate the goals to everyone so they are operating under the same assumption.
Another important element of a good business strategy is resource allocation. This does not only cover capital resources, but also human resources.
For this element, you need to carefully plan, manage, and assign resources to help reach your goals. To maximize your likelihood of success, you must learn to allocate these resources smartly.
You must understand the importance of articulating all the operational details of the work that needs to be done to ensure you amplify your efficiency.
For this element, assign people clear duties. In the end, this will save time and effort.
You can’t simply take a look back at your business strategy a couple of years from now and say you’ve achieved your goals.
You need data to back up your claim. Because of this, you must find a way to track your company’s outputs and evaluate your performance.
This will help you stay on track of your goals, deadlines, and budget.
Importance of Business Strategies
To help you get a clearer picture of how crucial business strategies are, here’s a look at their importance.
It establishes direction
Business strategies set the direction your company has to take and enable you to create goals to work on.
With a clear direction in sight, you won’t be confused about actionable steps you need to take.
For instance, your goal may be to become the biggest athleisure brand in the Philippines, but your business strategy will lay out everything you need to do to make your dream come to life.
It will make you unique
When you don’t have a business strategy, one of the habits you may develop is looking at your competitors and copying their best practices.
However, this will only result in competitive convergence, and it will be hard for your customers to set you apart from other brands.
With a business strategy in place, you can follow a unique plan that will make it easier for you to stand out no matter how saturated the market is.
It guides you in decision making
When you don’t have business strategies, you will not have a sense of direction and purpose for your company. This will make it hard to assess certain decisions.
For example, you may think investing in research for a new product makes sense to increase your sales, but it may only do you more harm than good because you don’t have enough manpower yet.
In a nutshell, a business strategy will help you set apart good and bad decisions.
It helps with job satisfaction
Your business strategy is not just important for your customers and company leaders, but all your staff.
This important document will enable your employees to stay more focused and increase their satisfaction because they understand their contribution to your company.
It enables you to measure success
Without a clear business strategy, you will find it hard to assess whether or not you’ve achieved your targets.
A business strategy must include your process in measuring what you have achieved. This way, you can maintain focus, and ensure that you are moving forward.
17 Business Strategies to Grow & Scale your Business
Don’t know where to start when it comes to creating a business strategy for your business? Check out some examples below to inspire you.
1. Cost leadership
For this type of business strategy, your goal is to ultimately project yourself as the most affordable provider of a product or commodity.
This is very effective in drawing in more customers, although you constantly need to work hard to reduce the cost of every single thing involved in your operations.
A lot of entrepreneurs falsely think that this business strategy is not good because the returns are low.
However, you can still maintain great returns after you keep internal efficiencies in check. This can be done by establishing rigid budget controls, and scaling your facilities to produce more items at a lower cost.
One of the most effective business strategies you can work on is to focus on selling more products to your customer. Cross-selling is a great strategy especially if you sell online.
By increasing the number of products you sell to a single customer, you can increase their spending. Even a single additional item can give you more profit without making an effort to acquire a new customer.
For example, if you sell notebooks, you can diversify your product list to cater to other office or school supplies.
3. Technological advantage
This strategy will help you release better products, which will keep your customers happy and improve your sales.
Having a strategy that focuses on technological advantage means investing a significant amount of your capital in research and development.
This can also include acquiring software to gain access to an exclusive technology that you can leverage.
4. Targeting a specific generation
If you have a niche product, you can target a specific generation. This is an awesome strategy used by some of the largest companies in the world.
For example, you can target the young market which includes Gen Z and millennials if you are selling Y2K-inspired clothes.
This can be done by tailoring your content and products to match their every need and desire.
Going back to the example, you can leverage videos on TikTok to market your products because the younger generation are mostly present in the said platform.
5. High prices
This is the opposite of the cost leadership strategy. You will be surprised at how much people are willing to pay to get the product they want.
By hiking up your price and positioning your brand this way, you can give aspirational value to your products. This will help you get more profit.
6. Offer innovative products
This business strategy is recommended for certain industries such as technology.
For this strategy, you need to distinguish your product or service by creating a cutting-edge or unique feature.
By making your product more unique, people will want it because it can give them something they cannot get from other brands.
With this strategy, you can also charge a higher premium to offset the cost of your unique product. You can make yourself stand out through design, quality, or even your customer service.
7. Improve customer retention
By now, you may already know that retaining customers is more affordable than acquiring a new one. This is an awesome business strategy to follow if you want to increase your profitability by building lasting relationships.
Increasing customer retention can be done in a lot of ways such as offering innovative products, offering great customer support, providing personalized content, and rewarding loyal customers, among many others.
8. Focus on customer service
This is an awesome business strategy if you want to stand out. Many companies are famous because they have built amazing customer service and support.
If you want to follow this strategy, you can focus on a more efficient call center, online support, or both.
By ensuring you offer an omnichannel approach to customer service, you can give your customers more flexibility.
9. Improve business sustainability
Your business strategy could focus on sustainability.
This can include reducing energy costs, implementing a recycling program, making sure you don’t ship out your products in plastic, and decreasing your overall carbon footprint.
You’ll be surprised at how much people are willing to rally behind brands that care for the environment.
10. Creating a movement
Have you ever encountered a brand that has a cult-like following?
For example, take a look at Apple. You can pattern your business strategy on creating a movement.
This can be done by fostering an image that your products are not just aesthetically pleasing, but also life-changing.
Working hard to win over your customers is the trick to getting them excited about every product release.
11. Establishing trust
Another business strategy that will help catapult you to the top is establishing trust.
Instead of shoving your products down your customer’s throats, you can take a different approach and educate your customers instead.
This will not only help you sell tons of products but also become a trusted figure in the industry. In turn, people will listen to what you are saying.
For this strategy, your goal is to purchase or acquire another business. This is unique from other strategies mentioned on this list that simply focus on your company alone.
When you pursue acquisition, you can obtain highly skilled staff, and attract a bigger customer base.
Keep in mind that this is a very complex strategy and you need financial and legal teams to ensure you don’t run into any issues.
13. Selling a story
Think about Nike. While you may think the brand only sells shoes and sports apparel, it does more than that – it sells you a story.
After all, this is the ultimate way to communicate. For every pair of shoes, or every new technology they offer, they have a story that comes with it.
If you are creative enough, you can attach a compelling story to any kind of product.
Simply think about the most interesting things about your brand and what your audience finds appealing, and use this information to your advantage.
It doesn’t have to be tear-jerking, or goosebumps-raising, it just needs to be relatable.
14. Digital marketing strategy
This type of business strategy is so popular that it doesn’t need an introduction.
When you ace this strategy, profit will immediately follow.
15. Public relations strategy
PR strategies are notoriously complex.
However, you need to get it right if you want to ensure your customers stay happy.
Acing your PR strategy will protect your brand image in the eyes of the media, your customers, employees, and stakeholders.
It will also make way for positive word-of-mouth advertising.
16. Focus on an omnichannel approach
To keep up with today’s changing business landscape, you must prioritize having an omnichannel business strategy.
This includes your online store, social media profiles, email marketing, customer support…the list goes on.
With this strategy, you can not only build brand awareness but also offer better and more flexible options for your target audience to purchase products and build a relationship with you.
Giving your customers access to your company in ways that are accessible and convenient for them is the best way to show them that they are valued.
17. Prioritize time efficiency
If you’re a small business owner, you are probably wearing too many hats.
But as you plan to grow your business through your business strategy, you also need to look at how tools and software can help you save time and effort, and minimize the risk of errors.
Related: Business Development 101
9 Tips on How to Develop a Business Strategy
Making your business strategy is a huge feat, and it’s easy to get overwhelmed. We’ve gathered some tips to keep in mind to make this undertaking easier.
1. Research thoroughly
Every business strategy should start with research.
- What are your competitors famous for?
- Are there services you need to implement soon?
- Are some of your products losing relevance?
- What areas of your business need to grow?
- What are your customers asking for?
Knowing all these things will give you insight into how to position your brand in the future.
2. Go back to your mission
When you have a powerful mission statement, you are one step closer to creating an amazing business strategy.
Always remember that your business strategy should encapsulate what you do, what you want to achieve, and who you serve.
Use this information as a guide especially when you get overwhelmed.
3. Examine your competition
You can’t create a competitive business strategy if you don’t know about other brands in the market.
Be prepared to get to know these companies, and assess what sets you apart from them.
This tip doesn’t mean criticizing your competition, it just means knowing their strengths, and weaknesses.
4. Know your audience
If you’re a huge company, you need to write several versions of your business plan depending on who the audience is – investors, venture capitalists, employees, or other stakeholders.
5. Be conservative in the data
Your business plan must contain projections and estimations.
If you are 100% sure that you will get a 60% market share in the next 2 years, it wouldn’t come off as realistic or credible, especially if you’re still starting and there are already big players in your industry.
Instead, make your projection more conservative.
6. Be realistic
It’s easy to get caught up with idealism when writing your business strategy.
However, being severely optimistic with your resources will only set you up for failure.
As much as you can, be realistic and assume that things will cost more, or take longer than anticipated. Through this, you can exceed your expectations.
7. Create an action plan
Creating and implementing your business strategy are not the same things. You need to create an action plan that will bring your business strategy to life.
This includes elements such as priority issues, metrics for measurement, roles and responsibilities involved, resources required, and many more.
8. Adapt when needed
Your business strategy is not meant to be printed and then forgotten in a file cabinet.
It is a living document that is meant to change depending on the market condition and your unique situation.
Review your business strategy at least once every quarter and change as needed.
9. Communicate it
Just because you and your managers know your business strategy does not mean every person in your team knows it, too.
Always communicate and repeat your business strategy. Do not assume that every staff member knows it by heart.
When every team member understands what you are working towards as a company, they can do their part better.
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