Business strategy: Ins and outs
How do two businesses that have the same products gain a veritable market share and become successful? One part of the answer is – well-executed business strategy. A business strategy makes a huge difference in the success of a business. A robust strategy can make or break a business. In many cases, it is the differentiating factor between successful and non-successful business.
For a businessman or entrepreneur, it is vital to define a business strategy. Lack of a clearly defined strategy inhibits growth and blocks the road to growth. Failing to create a defined business strategy will deter you to achieve your personal as well as business goals.
Succeeding in a business
There are several ways to succeed in business. However, at the core of each way, underlies that business should focus on strength and its weakness.
While each business should strive towards becoming a market leader, it’s important to understand that a business can’t be all things to everyone. So the key to success here is to focus on strengths and curb down weaknesses. In this process, you achieve success and get ahead of competitors. This is where a business strategy comes to play.
A business strategy lays out business goals. Having documented goals helps you make hiring decisions and resource allocation. As businesses tend to have more than one department that works together, a business strategy also ensures that there’s no conflict among them.
In a nutshell, your business strategy is a plan to achieve business goals and sustain the business position in the industry. Typically, it’s a single comprehensive page with points jotted down. Additionally, it defines the business, target customers, and portfolio of products. Business strategy leaders have relied on documented strategy for a long time.
Why create a business strategy?
As explained above, the success of a business relies heavily on a strategic plan. And, as you might know, the success of a business depends at large on repeat customers, meaning a customer should come back to business repeatedly. As has been said several times, an existing customer pays off more than acquiring a new customer. A robust business strategy can help to build loyalty among customers.
Resource allocation is another area where business strategy comes into play. How do you divide your workforce to maximize profit? How your workforce is split and operates can make a huge difference in the success of the business. Taking the efficiency of one worker, workforce can be divided in a way that maximizes productivity and improves profitability.
Business expansion is also where business strategy plays a great role. Whether its product portfolio expansion (or a new market) or expanding to new regions, the success of your expansion plan will depend largely on your business strategy.
How to create a business strategy
Business strategy leaders rely on three important aspects to create a robust strategy.
1. Stay critical
What’s working today might not be as relevant tomorrow. What worked in the past, may not work today? Strategy leaders look at their strategy with a critical eye. They weigh the pros and cons of the business and its feasibility to bring the desired output in the present scenario.
Business strategists work with a goal in mind. They craft a business strategy to achieve goals in a realistic time frame. If the strategy doesn’t work out the way it is desired to be, they are expected to go back to the basics and revise the strategy.
3. Take action
Action-planning is an important part of business strategy. Sitting and discussing needless details of processes is a waste of time, instead, business strategy leaders propagate taking action.
Action results in the output. Over planning can sometimes hold you back from taking actions. A rather better approach is to continue action and make changes to the strategy as you see it fit.