Many businesses go to market without a consistent strategy and, therefore, are more likely to err on their way. Learn to design it step by step and stand out from the rest.
What exactly is a business strategy?
The business strategy unifies all the tasks a company must carry out to achieve a series of objectives. In this case, these objectives aim to ensure that the company develops all the activities necessary to position itself in the market and differentiate itself from other businesses operating in the same sector.
So, imagine if it is essential that your business strategy is well-armed to achieve results. The business strategy will also seek to obtain «x» levels of financial performance.
If you consider what position you want to be in within the market in which you move, you will have already found the essence of your strategy. At that moment, you must consider what you will do in the medium and long term to achieve it. The design and application of your business strategy will depend on the characteristics of your company and the competition in your sector.
Once the essence of the business strategy has been determined, what objectives should I set for myself? The most common goals when choosing your business strategy should be:
- Become a leader in your sector.
- Grow either in company size, geographical area, or scope of action.
- Achieve more significant profit and economic solvency.
Keeping these objectives in mind, you can answer all the unknowns and adapt your business strategy to the characteristics of your project.
What else do I have to consider in formulating my business strategy well?
The first thing you must do is an analysis of both the sector in which you operate and your own company. Thus, you must gather all the information you can about the exterior and interior of your business. To be a good entrepreneur, you should do both analyzes as thoroughly as possible.
Then, you must determine the best way to compete with the rest, set your objectives well, and take the appropriate measures that will lead you to achieve what your business is after. In summary, these analyzes can be delimited in:
- External: You will have to assess the political, economic, social, technological, legal, and environmental decisions that influence your business.
- Industrial: Here, you should be aware of the behavior of the companies that operate in your sector. For example, what bargaining power do they have with their customers or suppliers, what are their customers like and what they need, what are their products like and where they fail, etc.
- Internal: You will analyze your strengths and weaknesses.
You should ask yourself these fundamental questions to develop a consistent business strategy. Some of the questions you should ask yourself are:
- What is your business based on?
- Who and how is your ideal client?
- Where does your potential client move, and how do they buy?
- What does your client value the most?
- What products should you offer?
- How far does your business reach geographically?
- What do you do that your competition does not do for customers?
- What skills should be developed within your company?
- What are your strengths and weaknesses?
- What are the threats and opportunities of the environment?
- How do you think your company could grow?
- What can you offer potential investors to need external financing?
Examples of business strategies
Low cost
It is about offering competitive prices for our products and doing so with optimum quality. This strategy is based on competitiveness in the market and the reduction of business costs.
Product leadership
It is about offering new and unique products with higher prices and better after-sales service than the competition. The essence is to base the strategy on the characteristics and functionalities of the product in question. Customers give a higher value to the products and, therefore, are willing to pay what is necessary to acquire them.
Lock-in
It is one of the most complex strategies. Products that are very difficult for competitors to imitate are offered. What generates impressive loyalty, but in the long term?
Focus
It is about studying the market and seeing if a company has interesting business opportunities for you. In that case, you can consider allying with her to share resources, expand the range of products for customers, and both benefit from the deal. In this case, it is essential that you carry out an excellent internal and external analysis, as I mentioned before, to reach the best conclusions.
New geographical areas
Yes, as you have well deduced, another of the strategies is to consider working in new geographical areas, thus expanding the market.
Mark a specific market.
It is one of the business strategies most used by small businesses. It is about focusing and focusing on a specific market, thus becoming a company specializing in a particular offer.
Blue Ocean Strategy
It is one of the most revolutionary strategies. It is based on breaking the rules regarding the competitiveness between businesses. In other words, it intends to set aside the traditional competition between companies and expand markets by continuously innovating. The idea is that companies stop competing to achieve success and find new ways to generate value.