There are so many businesses out there that if we try to count them, we might just lose count. Now, all these different businesses have different structures and different policies. They all have different goals and they take different routes to reach and fulfil these goals. To reach their goals, they have to adapt to market conditions and analyse their users. Now this is where business strategies come into play.
In theory, business strategies are very easy to comprehend and understand. But, it takes a lot of effort and money to execute successful business strategies. The combination of all the decisions taken by the company and the steps taken to execute these decisions to accomplish their business goals is known as business strategy. It is the backbone of the business industry. No company or brand will be able to function properly without certain business strategies in place. It is crucial in attaining the set goals. In the worst case scenario, any fault in these strategies may result in the company going bankrupt or getting lost in the crowd of competitors.
What is the importance of business strategy?
Any business objective or a business plan without a well-thought out strategy may just remain a plan. It is a huge gamble to enter the business industry without a well-planned strategy. As more businesses take flight and start-ups leading the market in almost all industries, competition keeps increasing. The fight to keep the company relevant stays strong.
This is why there is a huge change in the business strategies used by modern businesses. We can no longer use traditional methodologies to attract customers or sell products. Customers are always looking for something new, something which catches their attention. They would invest their money in something which convinces them and assures them of good returns. Business strategy is a big part of business planning. Business planning helps the business to set up some goals and strategies give the company a way to fulfil those goals.
Business strategies are a great way for a company to assess their strengths and weaknesses. While working on strategies, you may come across new weaknesses and/or strengths and then use them to your advantage. Strengths can then be used to overshadow the weaknesses.
Making a business strategy improves efficiency. As there is a well formulated plan and everyone knows their part, the system works better and resources are used properly. Business activities become effective immediately. Capitalise your strengths and use it to gain competitive advantage. This positions the brand in a unique way, customers see the brand and company as more reliable and trustworthy. Implementing strategies makes it easy to control the activities and see if they are going as planned.
Different types of Business Strategies.
A small company may also adopt a growth strategy by finding a new market for its products. Sometimes, companies and brands discover new markets for their products through accident as well. They may not have meant to sell in one market before, but after seeing and demand, they may choose to sell their product in that market or industry. Companies also use the product differentiation strategy to put their products at a higher competitive advantage. Small companies will advertise superior quality or service. A great product differentiation strategy can also help to build brand and customer loyalty.
Some companies with high brand loyalty will use their fame to skim their prices. Companies like Apple, Nike and luxury brands like Rolex and Armani may set their prices very high in the introductory phase of the product to recover their advertising and production costs. Something about the product must be very special to get customers to pay the exorbitant prices. iPhones, Nike Shoes and Rolex watches are seen as an investment rather than an expense. These products have great luxury stature and customers are willing to pay any amount to acquire these products. However, price skimming might not always work in the long run because after the introductory phase, the demand for the product will decline.
A small company with extra capital may use an acquisition strategy to gain a competitive advantage. This is a smart move to expand locations and operations.No Fields Found.