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Business Strategy

by GBAF mag

A business strategy is critical to the success of any business, large or small. It must consider many factors such as the market, competition, and the business’s structure, weaknesses and strengths. It is also required to be flexible enough to accommodate change, even when the business is involved. Planning and developing a business strategy therefore involves strong concepts in business analysis and strategic planning, and a good understanding of internal functions such as…

The development of business strategy is driven by a variety of drivers. One driver is the competitive landscape that surrounds a company. Other drivers include products that are new to the market or new entrants to the marketplace, products that are niche products that have significant market potential, products that have significant barriers to entry, and products that require significant marketing or advertising budgets. All of these things can affect a company’s strategy, and each of these factors can create multiple opportunities for a company to develop its own unique set of business strategies.

In order to make good business strategy decisions, managers must understand and assess the key issues that affect their businesses. These issues may include competitive factors, such as customers’ buying habits or preferences, suppliers’ prices, technological aspects, company growth and position on the manufacturing supply chain, geographic factors, policy frameworks, and other external factors. Managers must use all of these key issues in addition to their own judgment to formulate a set of strategic goals. These key goals often dictate the methods by which a company conducts its day-to-day operations. Without good business strategy, a manager cannot effectively manage its staff, its resources, its products, its production processes, its marketing campaigns, or its overall business strategy.

Developing a business strategy is not simply a matter of developing a list of goals and calling it a strategy. A business strategy is a way of thinking, which ultimately guides managers through creating, implementing, maintaining, and strengthening their company’s strategic framework. The strategic framework is made up of core business objectives. At the heart of these objectives are four separate components: market entry, marketing, sales, and building and sustaining organizational culture. Other important elements in the framework may include research and analysis, target markets, and financial models. When a manager implements a strategy, he or she must consider how each of these elements will relate to achieving the business objectives.

When developing a strategic framework, managers should consider the nature of their firm, including whether it is a service firm, a manufacturing firm, or a business process outsourcing firm. It also needs to be examined to see if the firm engages in activities that directly and indirectly contribute to its objectives. For example, some firms specialize in producing high-tech electronics, while others sell consumer products. Other firms may engage in human resources training, while others provide technological training. In competitive industries, business strategy is also a consideration because some firms must actively advertise to retain and attract customers.

Regardless, of the nature of the firm, a manager should create and maintain a clearly defined set of company objectives. If the firm is a service firm, its objectives might include increasing customer satisfaction, reducing costs, attracting and retaining employees, maintaining a competitive edge, and increasing productivity. Each objective might then be linked to one or more core business strategies.

At the same time, each business strategy should be evaluated against a set of performance metrics. These could include overall customer satisfaction, return on investment, financial performance, productivity growth, and market share. The business strategy should be implemented by measuring the anticipated impact on each of the business goals and using an appropriate scale to calculate each firm’s relative strengths and weaknesses for that goal.

Once the business strategy is developed, it should be continuously monitored and reviewed to ensure that it is still relevant and effective. To ensure that the strategies are effective, a firm should periodically evaluate its performance using a variety of performance indicators. This might entail periodic interviews with key personnel, surveys of sales force levels and productivity, analysis of firm-wide marketing strategies and the status of its target markets, and analysis of competitor strategies. Finally, if the firm needs assistance in developing or improving its marketing strategy, it might need to obtain support from marketing consultants. The development of a sound marketing strategy can significantly improve the overall results of any firm.

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