Updated: Jan 9, 2020
by Amanda Pestana
Whether you have been in business for a long time, or whether you are just starting your business. Business Strategy is VITAL. Why? Because a company's strategy is the competitive moves and approaches to attract and retain customers, successfully, while pursuing opportunities to expand and grow your business, respond to changes within your market, manage operations, and reach financial and market performance.
A strategy guides team members to act towards the performance goals. It defines the competitive operating approaches the company consciously works towards. It also aligns the leadership thought process of the business, ensuring the team is working together and not against each other. Choices should be made based on what works best for an organization's capabilities and resources amongst the competition.
DISCLAIMER: There is no formula, prescription or specific roadmap that will guarantee your business will be successful, because it isn't one size fits all. It varies per business. The path your business should take needs to be uniquely designed and evaluated.
Some questions to reflect on:
How do you plan to maintain your company running and producing results?
What is your business market positioning?
How to attract and please customers?
What makes your business different?
What is your uniqueness?
How do you plan to capitalize on opportunities to grow your business?
How best to respond to changes?
How will the functional or operational part of the business be managed?
How will the company's goals and objectives be met?
It is the choices you make daily that will determine whether or not your business will succeed. What are the choices you, as the leader of your business, are making to ensure that your business will succeed? What choices and decisions are your team members making?
Many different paths, strategies, directions, and methods could lead to the success of your company; however, identifying which one works best for your business is essential because a strategy that worked for someone else doesn't mean that it will work for you. Therefore, you need to find a distinctive approach that is your own that will give you the competitive advantage you need to survive within your industry.
"The best performing strategies are aimed at competing differently." A strategy works best when it is followed by action and approaches aimed to set the company apart. Identitying your niche, and methods to deliver superior value and service will lead your strategy into a competitive advantage.
Here are a few examples of competitive advantages:
More extensive Product Selection or Services
Added PerformanceValue-added Services
Set a Company's Product Offering Apart
Offering More Value for the Money
Focusing on a Narrow Market Niche
Winning a Competitive Edge by Doing a Better Job or Serving Better
Developing Hard to Imitate Resources or Capabilities
Through competitive advantages, businesses enhance their financial performances. It's a company's competitive edge that holds promising sustainability for its future profitability. Knowing your niche is EXTREMELY IMPORTANT.
Sidenote: Week 5 of Marlena Banks's book Big Idea Food | A Weekly Devotional for Entrepreneurs, Side Hustlers & Dreamers, focus on knowing what your niche is. There is a niche with your name on it that doesn't belong to anyone else. It waits just for you, because there is no one else in the world that thinks, imagines, envisions, and sees things the way you do.
How to identify a Company's Strategy?
Diversification of the company's revenue and earnings
Actions to acquire, build or upgrade capabilities
Efforts to strengthen market position or influence
Approach to managing production, marketing, finance, and sales
Ability to capture emerging market opportunities
Responses and adjustments to the changing market
New product segments or geographic markets
Profitability by enhancing offerings to clients
Ability to compete profitably by reducing unit costs
As we are ever-changing as humans, so are our businesses. A company strategy will evolve, and the organizations that do not allow changes or adjust to changes are usually the ones that are unable to keep their influence or profitability within their markets. Just as marketing is a work in progress, so is strategy. A strategy is an ongoing task of crafting and modeling. A business strategy is always temporary or on trial pending adapting to new conditions and evaluating what works and what didn't work.
There is also a combination of a company's strategy being proactive initiatives and reactive adjustments. A portion of the plan comes from unexpected shifts, and another part of the procedure is responsive to elements. For example, a company's strategy crosses into the should not do zone and cannot pass scrutiny if it entails actions and behaviors that are deceitful, unfair or harmful to others, disreputable, or unreasonably damaging to the environment.
What is the difference between the strategy and the business model?
The business model guides the value of the business strategy and operating approach. It is the strategy that creates the blueprint adding viable solutions to maintain the survival of the business. It would be best if you had a combination of both for your business to progress.
What makes a strategy a good one or the ONE?
Three tests may be conducted to identify whether or not your business strategy is a good fit for your business.
The first test is known as the Fit Test. This test answers the following question "How well does the strategy fit the company's situation?" Is the strategy being tailored to accommodate the changes that currently exist in your business? The external and internal aspects of the overall situation of the company should be evaluated to answer the questions accurately and find the correct course of action.
The second test is known as the Competitive Advantage Test. Is the organization reflecting excellent or poor performance?
The third test is known as the Performance Test. Two kinds of performance indicators are evaluated at this stage which is the profitability or financial performance, and the market standing or competitive strength of the business at the moment.
Whether a strategy is proposed or currently existing within your business operation, stop to analyze the answers to these three tests before evaluating which course of action you should take. A good strategy with excellent execution will result in proper management. "The better conceived a company's strategy, the more competently it is executed." When the strategy works, the external and internal circumstances of the business align with the competitive capabilities and advantages of building company performance.
Directly attributed to the caliber of a strategy and proficiency of company performances is the degree of competence of the plan that is executed. Every company needs an excellency crafted strategy that reflects its unique niche achieving exponential results.