What is business strategy?

A business strategy is an outline of the competitive actions, tactics and decisions a company plans to take to reach its business goals and objectives.

It creates a vision and direction for the whole company to compete successfully, strengthen its performance, and achieve organizational goals. It is important that all people within a company have clear goals and are following the defined direction and mission. A business strategy helps different departments work together, ensuring departmental decisions support the overall direction of the company.

A successful strategy requires different techniques to recognize the needs and requirements of potential clients. Companies also need to be able to define markets, establish clear segments and position themselves.

A strategy must also ensure long-term sustainability. This means that the strategy addresses the critical issue of the management’s ability to attract, generate and maintain acceptable levels of resources to allow the company to follow its objectives.

There are several reasons why a business strategy is important:

• Planning: A business strategy helps you identify the key steps you will take to reach your business objectives.
• Strengths and weaknesses: The process of creating a business strategy allows you to identify and evaluate your company’s strengths and weaknesses, creating a strategy that will capitalize on your strengths and overcome or eliminate your weaknesses.
• Productivity: A business strategy allows you to efficiently allocate resources for your business activities, which automatically makes you more efficient.
• Control: A business strategy gives you more control over the activities you’re carrying out to reach your organizational goals, as you understand the path you’re taking and can easily assess whether your activities are getting you close to your goals.
• Competitive gain: By identifying a clear plan for how you will reach your goals, you can concentrate on capitalizing on your strengths, using them as a competitive advantage that makes your company unique.

A strategy design process should cover the following basics:

1. Specify the general goals of the company
2. Evaluate the company’s value chain
3. Evaluate the company’s supply chain
4. Identify target market
5. Evaluate target market needs
6. Analyze existing supply of services for target market
7. Detect gaps between needs and supply
8. Decide which segments to serve
9. Select the combination of services to provide

Key components of a business strategy:

• Vision and business objectives
  The business strategy is projected to help you reach your business objectives. With a vision, you can create clear instructions in the business strategy for what needs to be done and who is responsible for it.
• Core values
  The business strategy guides top-level executives as well as departments about what should and should not be done, according to the organization’s core values.
• SWOT analysis
  SWOT analysis is included in every business strategy, as it allows the company to trust upon its strengths and use them as a benefit. It also makes the company aware of any weaknesses or threats.
• Tactics
  Many business strategies articulate the operational details for how the work should be done in order to maximize efficiency. People who are in charge for tactics fully understand what needs to be done.
• Resource allocation plan
  A business strategy includes where you will find the required resources to complete the plan, how the resources will be allocated and who is in charge for doing so.
• Measurement and control
  The business strategy also includes a way to track the company’s output, assessing how it is performing in relation to the goals that were set prior to launching the strategy.

Examples of great business strategies:

• Cross-sell more products
  Some organizations focus on selling more products to the same customer, without having to spend money to obtain more new customers.
• Most innovative product or service
  Many companies, especially in the technology area, are distinguishing themselves by creating the most groundbreaking products or services.
• Grow sales from new products
  Some companies like to invest in R&D in order to regularly innovate, even with their most successful products.
• Improve customer service
  This can be a good business strategy if your business has had a problem delivering quality customer service. Some companies have even built a strong reputation for having exceptional customer service, something like online support or a more effective call center.
• Cornering a young market
  Some large companies are buying out or merging competitors to corner a young market. Acquiring a new company allows a larger company to compete in a market where it didn’t previously have a strong presence while retentive the users of the product or service.
• Product differentiation
  This is a common business strategy, especially for business-to-consumer (B2C) businesses. They can differentiate their products by highlighting the fact that they have superior technology, features, pricing or styling.
• Pricing strategies
  When it comes to pricing, businesses can either keep their prices low to attract more customers or give their products aspirational value by pricing them beyond what most ordinary customers could afford.
• Technological advantage
  Obtaining a technological advantage, you can often achieve better sales, improved productivity or even market domination. This can mean investing in R&D, acquiring a smaller company to gain access to their technology or even acquiring employees with unique skills that will give the company a technological advantage.
• Improve customer retention
  It’s generally far easier to retain a customer than spend money to attract a new one, which is why this is a great strategy if you see opportunities for improvement in customer retention. This strategy requires you to identify key tactics and projects to retain your customers.
• Sustainability
  You could launch an entire business strategy designed at increasing the sustainability of your business. For example, the objective could be to reduce energy costs or decrease the company’s footprint by implementing a recycling program.

 

HotWifi Solutions, Strategy for 2021:

• Most innovative product or service (by providing AI Marketing and AI Security)
• Improve customer service (by providing online support and effective call center)
• Product differentiation (by offering a low price and providing AI marketing & security)
• Pricing strategies (by offering a low price in comparison to competitors)
• Technological advantage (by providing AI Marketing and AI Security)