Home Business Identifying the Elements of a Good Business Strategy

Identifying the Elements of a Good Business Strategy

by gbaf mag

Business strategy is defined as the systematic arrangement or program of actions that help the marketers in achieving certain business goals. It’s nothing but a blueprint by which the successful operation of an enterprise is carried out to secure a firm competitive position in the economy, take care of its daily operations and attain the desirable ends of its growth. A business strategy is the best possible tool that helps you understand your business, market, customers and competitors and then plan and carry out the best way to reach your desired objective. Without a strategy, any business will find it increasingly difficult to survive in today’s highly competitive market place.

There are many business strategy examples that suggest that large scale production of any good requires some degree of planning, research, analysis, designing and implementing a business strategy. While this may appear to be an overwhelming task, especially in today’s global marketplace, it is certainly not beyond the capabilities of most organizations. The biggest challenge is in developing a comprehensive business strategy that can be used for establishing a sound long-term business plan to overcome the initial short term challenges.

Developing a solid strategy should start with identifying your target market. Next, you need to identify and analyze the features of your competition. By understanding and studying the key differences between your market and your competitors, you can formulate appropriate counteractions. You have to develop differentiated strategies that can address the differences in strength and weakness.

Defining the features of your competitors’ strategies will help you build a better moat around your business. A few of these differences are listed below. Most of the strategies focus on cost leadership, lower costs, cost reduction, cost control and eliminating waste. However, some companies go for high- Return on Investment (ROI) strategies that include cost savings and efficient supply chain strategies.

On the other hand, some firms concentrate on increasing market share, which is referred to as “Divergence.” These firms set apart their particular strategies from those of their competitors by being focused on a specific market or sub-niche. The best practice is to identify a single feature or attribute that offers the best platform for growth. This platform needs to be unique to the brand. Therefore, the best differentiation strategies are ones that target markets in a specific way. For instance, food service companies can differentiate themselves by focusing on the characteristics of food based on nutrition, or by offering something special.

In fact, there are several distinguishing factors that make up a business strategy that could drive the success or failure of the venture. However, it is important to keep in mind the ultimate goal – to make profit. If the company is not able to cut costs to maintain a consistent level of profitability, then the strategy is not worth pursuing. Therefore, cutting costs and maintaining the same level of quality is an essential component of any business strategy.

The best practice is to develop the right strategies and tactics to make profits over a long-term period. A plan must be developed that will help the firm meet its short-term and long-term goals. Nevertheless, short-term goals should always override long-term ones, as companies that make profits only to eventually become irrelevant are often those that eventually fail. Therefore, differentiation can be the difference between a profitable and a losing venture.

In addition, a good business strategy can be defined as an evolved set of strategies that allow the firm to effectively respond to the changes in the competition. For instance, if there are major product innovations in a particular market segment within a few years time, most companies will tend to respond with new products that might not be well received by the competition. This can pose a serious threat to the company’s long-term profitability because it may force it to close its doors to new customers. This is where a strategy can come in to save the day.

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