Effective business strategy is important for the success of your brand. In the competitive business world, the best strategy helps you win over your competitors. You get loyal customers and make more sales.
In this article, I will walk you through the meaning of business strategy and the best approaches to use for your business’s success
What is Business Strategy?
Business strategy is a plan a business or brand establishes to achieve its goals and objectives. It is imperative for business owners to ask three main questions for effective strategy;
- How can my brand create value for customers?
- How can my brand create value for employees?
- How can my brand create value by collaborating with suppliers?
Answering these questions allows you to better understand the needs of the people and how to tailor your products or services to those needs.
Every business should aim to provide people with value. Providing value is the key to success. People won’t spend their money on products or services, unless they are sure they will get value from it. Businesses who don’t create value most likely don’t succeed.
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Levels of Business Strategy
There are three levels of strategy in every successful business.
- The corporate level
- The business-unit level
- The functional level.
Setting goals or building strategies in this order will help you plan effectively, resulting in more success.
The corporate level
The corporate level is the highest level of the business strategy. The corporate level strategy should define your company’s ultimate objective. This level is important, especially for organizations that have more than one line of business.
For instance, a brand may be into manufacturing and marketing of a product. This brand has two business lines, one is involved in manufacturing while the other is involved in marketing.
This brand will need an overall corporate level strategy that addresses the main goal of the company. At this level, a business defines their vision and mission statements, as well as set goals that help to achieve those statements.
The business unit level
The business unit level is used for the multiple aspects of your brand. One strategy for one aspect . This strategy is beneficial because it gives a clearer view on the minute details in every business unit. It will help to easily spot which areas need changes. Once you know those areas, you can quickly make the change and promote your brand.
The functional level
The functional level of business involves each department of your business model. It deals with the day-to-day tasks each department carries out. Each department plays a role that differs from the other.
Though with differing tasks and responsibilities, these different department must complement each other and function properly for the overall growth of your business.
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The Elements Of Business Strategy
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The vision statement
Vision statement should define how you visualize your business. When people read your vision statement, they should think ‘Okay, here’s where this business is heading’.
It should communicate the dream you have for your brand. It helps customers and employees view your business the way you do.
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Mission statement
Mission statement is different from the vision statement. A mission statement should explain what you do, how you do it and who you do it for. Make sure your goals align with your mission statement; this will allow you to work according to your business vision.
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Core values
The beliefs and values you have greatly influences the success of your business. Core values explain the beliefs you have and the behaviors you accept from both employees and customers.
Examples of core values are integrity, honesty, respect etc. Once customers know these core values, they see your brand as trusting and are more open to do business with you.
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SWOT analysis
SWOT stands for strength, weaknesses, opportunities and threats. SWOT analysis enables you to know about your business growth or stability. It helps to identify business achievements and challenges.
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Long-term goals
Long term goals ultimately break down the vision statement you have already set up. These goals outline the plan on how you want to achieve the vision you have established.
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Short-term goals
Short term goals are little objectives that you work upon on your way to achieve the vision of your business. It’s like breaking down long term goals into smaller achievable units.
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For instance, you may want to achieve a long term goal in the next 2 years. You may decide on the actions to take each month or every 6 months till you have actualized them.
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Action plans
Planning without action is a waste of time and energy. Action plans help to break down goals and create actionable steps you can take towards them. It ensures that you work towards those goals since you know what to do at every stage of your business.
The 5 P’s Approach for Business Strategy
Henry Mintzberg, an expert in management, came up with the 5 Ps of business strategy. This approach is proven to work for many business endeavors.
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Plan
Planning is crucial and should be your first step when creating strategy. When you plan, you will have defined your business objectives and the tactics to achieve them. It helps you align efforts, allocate resources effectively, and adapt to changing market conditions, ultimately guiding decision-making and facilitating growth.
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Ploy
We can all agree that business competitors are real and they are always working to be the best. This is where the ploy strategy approach can fit well. The idea is to try and discourage competitors from taking a step that may be harmful to your own business.
It could be that they want to move into the same area as you. To combat this, you should expand your territory or store so they can leave the area. You shouldn’t go about threatening other businesses though.
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Pattern
Pattern defines the way you do things routinely. In the business context, pattern is the consistent features, trends of characteristics you observe in relation to your business. This pattern could be your brand’s financial performance, consumer behavior, business operational process or marketing trends.
Identifying and understanding these patterns can help you make informed decisions and capitalize on opportunities to mitigate risks.
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Position
The position approach helps you to know where your business fits within your market or industry. Position is usually influenced by your market presence, price or your product or service and branding. It also defines the way customers perceive you.
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Hence, you have to maintain a healthy presence and position. One that make customers to trust you. A favorable position can lead to competitive advantages and increased market share.
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Perspective
The beliefs and values you have greatly influences the success of your business. Perspective refers to a way of looking at a situation. This situation can either give you a challenge or an opportunity. Perspective will make you work on a given business challenge or make use of opportunities.
Conclusion
Business strategy is important if you will do well among competitors. When you have business foresight, it will be easy to align your goals and resources with the overall vision of your business.
A great business strategy should be flexible enough to adapt to changes in the ever evolving market.
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