Business strategy is, of course, all about achieving your goals. So we set one for ourselves!
That goal? To produce the only starting point, you’ll need to raise your business strategy knowledge to a new level.
Of course, nothing can replace bringing in industry specialists with the latest expertise. But, even then, we know you’ll want to keep building your understanding of this vital area.
In most small businesses, team members have a lot on their plate. Non-specialists can often be responsible for strategy tasks, like sales, marketing and operations. As such, it’s important to understand key ideas in the field of business strategy.
Today, we’ll dive into some of these key principles. But first, what does it really mean to run a business in the 21st century?
Table of Contents
What Is a Business Strategy: Definition
A business strategy is a master plan that a company follows in order to achieve specific goals and secure a competitive position in the market. It’s the art of identifying and allocating resources like time, money, and talent to outmaneuver competitors and foster long-term stability and growth. This strategy encompasses everything from deciding which products to offer, which markets to enter, to how to price and promote them. Essentially, it’s the blueprint that aligns company operations with its vision, setting a clear path for decision-making and resource allocation. Think of it as a game plan that helps businesses navigate the complex commercial landscape, adapt to changes, and thrive.
21st Century Business Strategy
Society has changed a lot in the last few decades. Naturally, this has spilled over into the world of business, too. A couple of hundred years ago business was about finding out what society or the community needs, manufacturing and selling it.
Today there is much more to it than that. Business now entails not only manufacturing and selling, but also advertising for the product and convincing the consumer to opt for your products and services rather than the competition.
Often, businesses don’t just meet consumer demand, they create it.
The business definition that was set forth years ago may have indeed changed by today’s fierce and competitive market. Running a business now has little in common with running a business 100 or even 20 years ago.
New and emerging concepts are just now being studied. For example, the concept of employee satisfaction and its impact on business success has led to the emergence of the human resources department in any company.
These new concepts have changed the essence of business strategy. It is no longer about trading goods and services, the simple business definition has indeed changed forever.
Business Strategy Through the Years
It can be difficult to pin business strategy down. In order to give a straightforward overview, we must consider that every decade business owners focused on what seemed important for them at the time.
Looking into a brief history of business practices, we find that with every decade, priorities for business changed.
In the 1960s it was all about quantity. Business strategy was all about how to industrialise and create as many products as possible in order to sell. The idea was the more you produce, the more you sell.
Later in the ’70s entrepreneurs became more concerned with cutting costs. That is, how to sell the same goods at the same price while decreasing costs to increase profit.
With the eruption of free markets everywhere and the emergence of truly international business, owners began focusing on quality and how to make their products better than the competitor.
Coming over to the 90’s the concept of lead time began to emerge. Businesses became concerned with how to get the product in the hands of the consumer as fast as possible.
Today in the 21st century all the hub-bub is about offering more services to existing customers. The emergence of online businesses have also changed the business landscape beyond recognition.
21st century business strategy now has as much to do with portraying the right values to your customers as it does with creating the best products at the lowest price.
With that in mind, let’s take a look in more detail at some of the concrete business strategies which lead to success in the modern age.
Business Strategy and Your Route to Success
Before you set out to build your business empire, let’s take a little time to not just look at business strategies but also the people at the centre of the whole plan – you! Business strategy starts at home, so to speak.
Not only is considering your own self-motivation, leadership and your broader personal development personally fulfilling, it will ultimately be beneficial to your business, especially with regards to productivity and leadership skills.
If you have your sights set on becoming a great entrepreneur, it’s also important to develop key skills, like:
- Time management,
- Business development,
- Soft skills.
These are the core skills that allow you to make good strategic decisions when you run your own business.
The same skills apply if you’re out to become a freelancer. A good freelancer has the same business strategy skills as even the most senior managers in a larger company.
Of course, basic psychological tools like Maslow’s famous Hierarchy of Needs can help understand not just yourself but how customers think too.
This means, when you’re considering the strategies used by the corporate giants out there, you can also pause to think about factors such as customer loyalty.
Setting your business objectives will, of course, be a main goal of forming your business strategy. In fact, this is one of the most fundamental elements of business strategy. It’s crucial to know how to identify your core business objectives, over the short and long term.
These can include:
- Financial goals, like a particular level of profit,
- Gaining a particular market share,
- Reaching new customers,
- Launching a new product.
Operational issues can also fall under business strategy, for example company insurance, financial management. This also includes how you structure your business, and create project management processes.
Business Strategy Tools and Skills
It’s also crucial to know how to monitor your progress and success. For example, most modern businesses use business analytics tools to measure their progress and productivity to help along the way.
You’ll also need a number of skills and processes relating to the quality of your products and services. For example, it’s important to understand the perceived quality of your company in order to create an appropriate marketing strategy.
To achieve this, you’ll need to implement a proper quality control strategy.
How you bring your products to market is also a vital element of business strategy. Product management allows you to deliver on your customers’ expectations, while new product development processes are essential for consistent business growth.
Marketing Strategy Essentials
It’s difficult to imagine having a business strategy in today’s world without pausing to think about some essentials from the marketing profession too. This is probably the area of business strategy which has changed the most in recent years. It is called the marketing mix and it is composed of: product, price, promotion, and place.
The four Ps of the marketing mix are a foundational model in marketing that represents the key elements that must be considered when marketing a product or service. They are:
- Product: This refers to the goods or services that a company offers to consumers. It involves the development of the product, its design, features, quality, and the problem it solves for customers.
- Price: This is the amount of money consumers must pay to acquire the product or service. Pricing strategies are crucial as they affect demand, profitability, and market positioning.
- Place: This pertains to the distribution of the product, i.e., how the product gets to the consumer. Place strategies consider locations, logistics, and channels of distribution to maximize convenience and accessibility for the target market.
- Promotion: This encompasses all the activities and tactics a company uses to communicate with its target market about its product. This includes advertising, sales promotions, public relations, and personal selling aimed at generating interest and engaging potential customers.
Together, these elements help marketers to strategically position their product or service in the market and to effectively reach their target audience.
Tactics to Maintain Competitiveness
These days, companies need to implement a wide range of tactics to maintain competitiveness, such as:
This can be tricky for many small businesses, as each of these is a highly specialised discipline. This means that companies without the resources for dedicated marketing professionals can struggle to implement the best strategies.
In many cases, this means that the most effective way to implement these strategies is to outsource them to an expert marketing agency.
This means that you can take advantage of the benefits of modern marketing strategies and techniques, without the expense of bringing onboard an in-house specialist.
Understanding Business Strategy
In summary, a business strategy is a comprehensive plan that outlines how a company will achieve its objectives and strengthen its position in the marketplace. It involves a careful analysis of the competitive landscape, understanding of the target customer base, and the intelligent allocation of resources. By setting clear directions for growth, innovation, and value creation, a business strategy ensures that all efforts are aligned with the overarching goals of the company. It is not a static document but a dynamic framework that must evolve in response to market trends, consumer behaviors, and technological advancements.
Ultimately, an effective business strategy is the roadmap that guides a company towards long-term success and sustainability, providing clarity and focus in an ever-changing business environment.