A fundamental pillar to ensure success in your organization, Business Strategy is an element that guides the path to be followed, helping to define objectives and actions that aim to increase business success.
Complementary to strategic leadership, Business Strategy seeks to analyze the care of an organization’s external and internal environments. It requires maximum understanding about your customers, competitors, trends, and the strength of the business. From the analysis of this data, clear and defined goals are drawn together with action plans to achieve them.
To get you up to speed on this topic, check out the guide below on how to use Business Strategy for your organization to develop and thrive in the current scenario.
What is Business Strategy?
A Business Strategy refers to the set of decisions and actions that, taken correctly, help a company achieve its long-term goals and gain more competitive advantages in the market. It covers different aspects of the business, such as marketing, finance, technology and innovation, among others.
For a Business Strategy to work with excellence, it is necessary to have a deep understanding of the market, including:
● Customer needs;
● Industry trends;
● Behavior of competitors;
● Reproductive and regulatory forces.
From the analysis of these and other factors, realistic and feasible objectives are drawn to direct all the company’s activities.
What is the contribution of Business Strategy in a company?
Check out the 3 main reasons to adopt a strategic approach in your organization:
To make your organization differentiate itself from others in the market, identify and embrace new opportunities that arise creating a unique position in the market. This strategy will make your company stand out, attract new customers and generate sustainable competitiveness.
Growth and development
Direct in a clear way, creating objective long-term goals. Identify target market, increase range of services and products, explore new opportunities. This set of initiatives favors the sustainable growth of a business.
Adapting to changes
With the ever-changing market, companies need to adapt to maintain their relevance. With a well-aligned business strategy, your organization will be able to monitor trends, anticipate changes, adapt and capitalize on new opportunities.
Examples of Business Strategy
Here are some examples of how Business Strategy can reflect on a company’s results. Check it out!
Cross-sell more products
Some organizations focus on selling additional products to the same customer. Cross-selling works well for office supply companies and banks, as well as online retailers. By increasing the amount of product sold per customer, you can increase the average cart size. Even a small increase in cart size can have a significant impact on profitability, without the need to spend money to acquire new customers.
Product differentiation is a common business strategy, especially for B2C (Business to Consumers) businesses. They can differentiate their products by highlighting the fact that they have superior technology, features, prices or quality.
When it comes to pricing, companies can keep their prices lower to attract more customers or give their products an aspirational value by pricing them beyond what ordinary customers can afford. If companies plan to keep their prices low, they will need to sell a much larger volume of products as profit margins are often very low.
For companies that choose to price their products beyond the reach of ordinary customers, they can maintain the exclusivity of their product while maintaining a large profit margin per product.
By gaining a technological advantage, you can often increase sales, have greater productivity or even dominate the market. This could mean investing in research and development, acquiring a smaller company to gain access to its technology, or even acquiring employees with unique skills that will give the company a technological edge.
It’s usually much easier to retain a customer than it is to spend money to attract a new one, which is why this is a great strategy if you see opportunities for improved retention. This strategy requires you to identify key tactics and projects to that end.
Now that you know what Business Strategy is and how it is essential to direct the organization, have you thought about delving into the topic and learning more about its applications in the global market?
See the short course Advanced Topics in Business Strategy at the University of La Verne and apply for scholarships for next year’s classes.