What Is Business Strategy and Why Is It Important? | Business Strategy

Business strategy is the plan for how a company will compete in the marketplace. It’s important because it helps determine what your business can do and sell, who your target customers are, how you’ll reach them, and more.

The first step to creating a strategic plan is figuring out what you want to accomplish and making choices about focusing your efforts. Once done, you can figure out how much time and money are needed for each of these tasks.

And finally, if necessary, make trade-offs between these different objectives until they all fit within the budget allotted by management. This post will show some examples of solid and weak business strategies with suggestions on improving them.

Business Strategy Example 

business strategy

Weak business strategy example I know a “real” company selling an online course but has not developed a strategic plan to market the system.

They have outsourced the marketing to their customers who are beta testing their product. If this sounds like your organization, please read through it carefully and develop a strong business strategy.

We’ve all seen online courses that promise instant enlightenment or untold riches in exchange for small up-front payments or ongoing monthly fees, although the products vary considerably. 

Most offer some form of shortcut to success by cultivating positive mental attitudes and visualizing goals — very much along New Age lines. While many people find such valuable material as part of daily life practice, evidence about its effectiveness as a path to worldly success remains thin.

However, with the explosion of social media and connectivity over the past five years, there’s now another way to market such products: part of a larger ecosystem that includes online communities built around these products and services.

Identifying Your Business Goals and Objectives

The first step in strategy development is identifying your business goals and objectives.

“We want to reach more customers for our new course by marketing it as part of an ecosystem.”

(Excerpted from COMPANY’S NEW COURSE DESERVES STRONG MARKETING PRESENCE)

Weak Business Strategy

week business strategy

Weak business strategy example II When you write a book, you need to figure out how to market it so that people will buy it. You can do this with trade shows or conferences, or you can go the traditional route and sell it online through your website or at a physical store.

This author decided she wanted to create a bookstore where people could buy her Kindle books and other authors’ works. But instead of going the traditional route. 

She opened up shop in an area that doesn’t have much foot traffic or opportunities for drop-ins from passersby. 

She also didn’t consider that plenty of good websites out there do the same thing without taking up all her square footage.

She figured if someone came in to look around, they might find something to purchase, but it’s infrequent for anyone to take a chance on something new without knowing what it is beforehand, so why space waste?

Weak business strategy example III This is the best business strategy I’ve read in a while. Granted, it’s not earth-shattering, but then again, this company didn’t need to be world-shaking since they were trying to sell pens.

A couple of years ago, we stopped by an office supply store and found ourselves mesmerized by a wall display of multi-colored pens. We bought some multi-color pens for our home office to not constantly pick up one pen off our desks when we needed another color.

But even after replacing all the pens in our drawer with multi-color versions, we kept running out of certain colors — just like before! And then, when you finally ran out of the last two blue pens in your multi-color pen pack, you found yourself at the office supply store again.

The owners of this company realized that multi-colored pens are not the answer to their problems; they need better pens! So they took on an innovative approach.

They had their engineers research how people use pens and what the problems could be with current technology. Then they created a smartpen that would have a refillable ink cartridge, a variety of colors in one pen, and a very comfortable grip for writing. 

Along with this new product came an incentive program: if a customer bought ten smartpens, they got one free! This is strategy development 101: solve your customers’ problems by creating something better for them instead of just offering them a way to avoid a crisis.

Strong Business Strategy 

strong business strategy

Strong business strategy example I To enhance your company’s international presence, you need a powerful website that is fully translated into as many languages as possible. 

You can easily do this by hiring talented programmers worldwide who speak multiple languages and specialize in programming for websites. 

Then it would help if you had the website translated into multiple languages through a translation service that is checked by humans and checked again by computers so that there are no errors in any of the translations. 

It Will creates a unique website with all the bells and whistles people expect from a high-quality international business.

Why has Strategy Evaluation Become so Important in Business Today?

Strategy Evaluation business

Businesses today are inherently more complex than ever before. The successful companies of the future will be the ones who understand their customers, competitors, and markets better than anyone else.

One way for businesses to keep evolving is by acquiring other companies that they think would fit nicely into their portfolio. However, to know what might work for them, they must evaluate all potential opportunities justly. 

Here is strategy evaluation becomes essential. The company can determine which opportunity is most profitable through strategy evaluation given various scenarios and sets of constraints.

Questions can be answered by discussing the advantages and disadvantages of different business strategies.

Advantages: 

When companies focus on only one type of product or service, they might become very good at it, making them more competitive than their rivals. 

They also don’t need as much money to promote and advertise their products or services as companies that offer multiple types of products or services.

Disadvantages

Suppose the company only produces one type of product. In that case, it could alienate those customers who buy different products and might start buying from the company’s competitors instead. 

Also, if a rival company decides to start producing a rival product, the company with a narrow focus could be in big trouble.

A jaguar in a zoo is in a cage, which can be seen as a strategy to keep the jaguar from getting out and attacking people. But if someone puts up an electric fence around the zoo instead. 

They are making more of an effort than simply putting up a cage because the jaguar might be able to get out of a cage but not an electric fence. Regardless, the zoo’s strategy is to keep the jaguar contained.

A teacher provides all or most of his students with paper, pencils, and notebooks to use throughout the school year. It is seen as a strategy because it makes writing easier for students by giving them these tools. However, this also means that they have to buy more paper when one notebook runs.

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