Business strategy is very important especially when you are trying to establish a new business or expanding your existing business. Millions of businesses in the world are running without any business strategies. They are present in the market but are not visible in the market. Let’s see how we can fix it. Are you one of them?
Why should we have a business strategy for our organization?
Why you should have to read this article– First of all, this article is suitable for all type of business. I am sure that after reading this article, you will be able to implement the business strategy of your business. If you have read other articles related to business strategies, then this article will give you a much more experience with quality information.
After reading this article I will advise you to implement the business strategy of your business. It does not matter how small or large your organization is. The business strategy does not have any side-effect.
Enjoy the article….
1.What is a business strategy?
Layman definition-A strategy that takes your business to the next level with less challenges. No matter what your goal is. You may be wanted to grow your business, It may be you are looking for huge money or you just wanted to famous in your industry. When we say business, a strategy comes automatically with a business. A proper planning of your business is also often called business strategy or business planning; however, business planning is a little bit different.
What is the definition of strategic management?
Business strategy often called Strategic Management– It involves the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.
It provides overall direction to the enterprise and involves specifying the organization’s objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision making in the context of complex environments and competitive dynamics. Strategic management is not static in nature; the models often include a feedback loop to monitor execution and inform the next round of planning.
Get detailed information regarding strategic management in Wikipedia.
Business strategy is two words but if we focus on word of strategy then you will have a better understanding of business strategy.
How strategy swill in late 1988?
Flashback– When Henry Mintzberg research on strategy in 1988 he found that strategy is not a simple term that we can define. Because of this, he could not point to one process that could be called strategic planning. Instead, Mintzberg concludes that there are five types of strategies:
Let see in this image.
This is good to know information but I know this information will not going to work for business but if you revolve around the business world then you should have some technical knowledge as well.
3.Why is the business strategy so important for all size of business?
There are millions of business is running at this moment. If you check online you will get million of page result. if you see offline business, there are millions of businesses around you. 1 in 10 people is involved in the business. But only a few become a brand and some of them establish themselves in business.
The business strategy allows you to structure your business according to your market demand.
Let say, you have small size business and your business running well then you have a chance to expand your business to medium size and then to large. if you do not have a business strategy then chances of growth will be less. Without a business strategy, a business cannot run well for a long time.
4.Why do we need a business strategy?
Big companies pay millions of dollars to make powerful business strategies against their competitors.
Business strategies are important for all businesses. As it is more challenging to be present in the market compared to 50 years ago. If you want to achieve growth in your business then you must have the business strategy in your business.
5.How do your business strategies work?
Let’s assume that you have decided to open locksmith business. Reason why I am taking this business, because so you can have a better understanding of the business where the option is very low. Most of the people think that locksmith business has a very low scope of growth. Most of the time people love to discuss online business, the business which can easily be imagined. But locksmith business has its own potentiality.
Let’s take a scenario-1
When you opened locksmith business you found that it is very difficult to stay in the market. Your rival holds the market very gracefully. It is very difficult to exist because of the less demand. No one wants to do a business with you. You managed to handle shop for at least 6 months. The customer is going to your rival’s shop. Now you are deciding to not to invest any more fund because you found growth is less as compare to other business. However, you are the master of your business but opening a shop did not work.
Now, have you ever think why your business is not run very well?
1.Why did you decide to close your business?
2.Why are you unable to compete with your rival?
3.Why is the customer not demanding your service?
4.Why you struggled to pull good business from your market?
There are thousands of factor involved not to grow your business. Only opening a shop or office is not a business. If you sitting idle and waiting for your customers to come and you think they will ask for you. This is not the current trends of the business. Nowadays; business is very competitive you have to maintain the pace of your market. Don’t worry about your customer. Millions of people living around you. And they are your customer. The only thing you need to do is organized your business. Organizing business means you have to take your first step which is your business strategy.
Now let’s take the scenario 2
In scenario 2 you have done a pretty good job. When you decided to open a locksmith shop you have planned each and everything. You made a business strategy to compete with your rivals. You have done following things:
a)You decided a good business name.
b)You did small marketing research. Because of limited funds, you decided to do small marketing research by your own.
c)After marketing research, you set up a business plan. You added following things in your business plan to make sure your business can run without any interruption.
- Keys to Success
- Company policy
- Company Ownership
- Start-up plan
- Market Analysis
- Market Segmentation
- Target Market Segment Strategy
- Service Business Analysis
- Competition and Buying Patterns
- Web Plan Summary
- Website Marketing Strategy
- Development Requirements
- Marketing Strategy
- Sales Strategy
- Management Summary
- Personnel Plan
- Financial Plan
- Start-up Funding
- Break-even Analysis
- Projected Cash Flow
- Projected Balance Sheet
- Business Ratios
In the business plan, you also did a detailed work on products. You keep following products like deadbolts, Padlocks, cylinderlocks, camlocks, safes, key rings, key chains, locking display cases, locking file cabinets and tool chests.
You also included services like cutting copies of keys, installing all lock products sold, on-site security, consultations, product repair etc.
After all this hard work now young open a shop you are going according to your plan. You followed your business strategy against your competitor. Now after few months you find your business started growing.
Note: This scenario is just to give you an overview of business structure. This is not an exact business module. I tried to explain to you how any business work where business strategies involved.
6.How important is the business strategy for any organization?
As I explained above how critical is your business if you don’t have the business strategy. As I already said business help you to grow in every aspect. If you want to become an entrepreneur then you need to have a strategy for your business. It is very important to make a business strategy plan for your business. If you don’t know to you can do that for your business you can also hire business strategy consultants. They will help you to organize your business in every manner of business psychology.
As I said no matter how big or small your organization is. You should take care business in every aspect.
Business strategy consultants can also help to get your business plan in your hand.
Now you have to decide yourself how you can take your business to the next level with strategy or without a strategy.
7.Where to focus while making business strategy?
Business strategy has its own deep root. If you will go deep into the Strategic Management you will get a lot of information related to strategies. But we will not go on so depth; otherwise, you will get confused. The purpose of this article is to help fresher and small businesses that are running a business without any strategy.
You have to focus on every corner. Wherever you can get business you have plant it well. Nowadays people mostly focus on digital marketing they make a strategic plan according to web requirement. But that’s not the case here. You have to focus on digital marketing and traditional marketing both. Make your business strategy accordingly.
8.How to create a business strategy?
Creating a business strategy is not an easy task. But it is not that much complicated as it seems to be.
There is proper structure to built business strategy. However, if you are not an expert, at least you can manage a business strategy that is essential at the beginning.
From the beginning, if you manage to create a business strategy for at least one year then it will be enough if your business is in small form. If you are fresher and you do not have any ideas how to create a business strategy you may include following things.
Your current position– It means where are you at this moment?
As you are thinking about your organization now, you want to see your original element (mission and value) to ensure that there is a change or not. More than likely, you will not modify these two areas often. Then you want to see your current situation or your strategic position. This is where you see what is going on internally and externally to determine why you need to change. You should regularly review your strategic position through a SWOT use. These elements are as follows:
- Mission statement: Very well self-explanatory. Why your organization is existing. What is the purpose of your business?
- Values and/or guiding principles: If you are establishing business it should have some value or guideline principal. It will allow you to gain confidence and also help you to take your people with pace as you are.
- SWOT: The concept of matching the distinctive competence of a company (its internal strengths and weaknesses) with its environment (external opportunities and threats) in the context of its objectives.
Your next steps:
It means where are you going? How to your business will sustain for a couple of years without any big challenges. If you find any roadmap so it would be easier for you manage your business in high competition.
How will you achieve your goal? You should make an achievement plan as well so make sure you will get the status of growth. So if you do business then your objective will take your business to the next level. And for that, you may set some goal to achieve. If you will do it correctly then it would be easier to get the achievement.
Note: This business strategy is for fresher or a starter who doesn’t have an idea to keep their existence in the market. However, I strongly recommend you to hire business strategy consultants. If you are starting a small business then you can apply this business strategy plan. I am sure this will work for you without any cost.
If you are starting a business and you don’t know how to start a startup then you should understand the business strategy before you start a business.
8.What is formulation? And why it is important?
A formulation is a process of developing the strategy or it is the process to create a series of strategic decision which helps the organization to understand about the competition according to market demand.
Now there is certain question arise how you will compete.
- What is the organization’s business?
- Who is the target customer for the organization’s products and services?
- Where are the customers and how do they buy? What is considered “value” to the customer?
- Which businesses, products, and services should be included or excluded from the portfolio of offerings?
- What is the geographic scope of the business?
- What differentiates the company from its competitors in the eyes of customers and other stakeholders?
- Which skills and capabilities should be developed within the firm?
- What are the important opportunities and risks for the organization?
- How can the firm grow, through both its base business and new business?
- How can the firm generate more value for investors?
If you consider these kinds of question in your business then it will help you to set a goal of your business.
9.How long your business strategy work?
As long as you are implementing this, in your business. Your business will go well. To be very practical, business strategy self-life can vary business to business. If you created a business strategy for 1 year. That might work for locksmith business but not for mobile phone business. Why it is like this, because of high competition everyone wants to keep one step ahead of others. If you cannot beat the other then after one year you will not be visible anywhere in the market.
The best example is Nokia. When Nokia stopped launching a new product in the market with the latest technology then they vanished within few years. Samsung consistently came up with the latest features and competitive price so that their products are involved in the huge market.
Business strategy is very important to all size of businesses at these days. If you have a shop or high-class office to run but without any strategy, so it is very difficult to sustain in the market for the long run. Now you have to decide you will run your business. With the plan or without a plan it is totally up to you.
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