What is Business Strategy?
Are you wondering about what is business strategy? In this article let us understand what is business strategy? What are the categories of business strategy? How to make a business model? and what are the common online business strategies in detail?
A business strategy can be described as the blend of the decisions taken and activities staged by the business to achieve business goals and to obtain a viable position in the market. It is the guiding post that runs the required goals. Any mistake in business strategy can result in huge damage to the business.
A great business idea without a practical business strategy is of no use for the businessmen. When the business enters the market without having a well-established business strategy, they may end up anticipating results like that in gambling.
Due to the advent of media, communication, and technologies the way businesses operate today has drastically changed. In a traditional business environment, the entrepreneur had to possess factors of production like land, labour, machinery, and financial resources to begin the business. Today’s entrepreneurs have found ways to start a business with zero initial investments. In many cases we see entrepreneurs pursuing their entrepreneurial goals with investor’s money. However, all this is not possible until you have a strong business strategy in place. A business strategy would revolve around any of the following areas:
- Mobilization and allocation of scarce resources to maximize business value.
- Tracing business opportunities in a cost-effective manner.
- Securing a competitive edge in the market.
- Enjoying economies of scale and economies of scope.
- Abilities to handle the competition.
- Earning command over the market share.
A good business strategy should consider the aspects shown in the image below
Categories of Business Strategy
Categories of Business strategy can be discussed under three categories:
A. Corporate Level Strategy
The corporate level strategy focuses on the action-oriented, long term, and comprehensive plans aspiring to achieve the overall organizational goals. The corporate-level strategies may include allocation of budget for the year, integration of production and service systems, mergers, takeovers, amalgamations, joint ventures, hostile takeovers, conglomeration, divestments, integrations, and expansion plans.
B. Business-Level Strategy
Business level strategies mainly focus on functional areas where the actual production takes place and the services are designed. The business-level managers understand the vision and mission of the organization and align the duties and responsibilities of the organization to achieve those goals. They interpret the business requirements and chunk the duties and responsibilities into manageable pieces. They seek functional level managers to achieve their business goals.
C. Functional level strategy
The functional level strategies are designed by line managers who handle day to day operations at the department level. The functional level managers are well equipped to design strategy at this level since they understand the pulse of this level. The functional level managers function in areas like finance, marketing, human resource management, etc.
How to Make a Business Model?
One of the frequently asked question in business is how to make a business model and what are the stages involved in making a business model. Creating a strong business model is not just about creating a business plan and getting it approved by the investors. It is about how you execute the business plan and create value for your clients.
Most of the business leaders focus on building niche products but may forget the fact that any niche product requires a strong business strategy to become a successful business. Defining the right business model would require the same diligence as designing a great product. That is one of the reasons why often investors prefer to see business entities driven by more than one founder. Here I suggest the following stages in which you can validate your business whether it is a sustainable business model or not. Scroll down.
- Confirmation on whether the product or service solves the problem
When you design a product or service, you should design it to solve a definite problem that you have witnessed in society. When the product can solve the problem, then it becomes viable in the market. Any business idea that comes without such a notion would be a big flop. When you see a problem in the market, design a product or service to solve that problem. If your product or service solves the problem without costing too much, then your service or product is reasonable in the market.
- Quantify the value of your solution
Designing a product or service to solve a problem is a good starting point, But, it is incomplete. The businessmen should understand the intensity and the extent to which the product can solve the problem. For example, when a customer is looking to buy toothpaste, the toothpaste company should understand the depth of expectations from the client (taste, colour, packaging, price, etc.) and how far the product will be able to meet those requirements. When the business understands the depth of the problem that prompts a consumer to buy a product, the business can become stronger in terms of fulfilling their needs.
- Test your supply chain strategy
Once the need for a product is studied and the same is manufactured on a large scale. It is critically important to understand the gap between the point of production to the point of consumption. Since the manufacturing hubs and the customers are geographically dispersed, it is important to understand the practical need for a supply chain network that transports the products from the point of production to the point of consumption.
- Build a customer base and brand loyalty
Building a customer base is an ongoing activity for a business that requires constant attention towards the needs of customers. Continuous innovation of the product is critical for the success of the business as the needs and preferences of the consumers will never be like standing water. The business needs to keep a careful track of the changing lifestyles, income level, and preferences of the customers. Updating the product according to the changing needs of the consumers is as important as devising a strong business plan.
Online Business Strategies
Today most of the businesses are going online due to a series of advantages. However, devising the right online business strategies is not easy. With a diverse range of products and services, often business entities find it difficult to choose the right online business strategy that is in sync with the business model. Designing strong online business strategies can be a daunting task yet the visionary entrepreneurs visualize the most successful online business strategies by screening the environment. A good online business strategy enhances the market share of the business. Let us discuss a few important online business strategies that are making news in the market.
A. Invest in Web Design
Designing an exclusive web page is creating a virtual environment for millions of consumers to find what they want that satisfy their needs. Designing an eye-catching, informative, and user-friendly website grabs the attention of internet users across the world. If the web page is not clear, confusing, and gaudy, the users may get distracted and exit the website. Hence, creating a clean, sleek, and informative website is very important for the promotion of your products and services online. Invest in designing a good website to help the business grow.
B. Explore Search Engine Optimisation (SEO) Techniques
Using the right combination of keywords in the content that is designed to promote the product online often creates magic in the market. When the online product descriptions get a series of hits and shares, the product information goes viral and may result in the quick sale of your goods and services in a matter of a few hours. For example, Amazon’s big billion day sale created a milestone due to its genius search engine optimization. Much of your organic traffic often comes purely with keyword tricks and online feedback. Keyword research is a vital part of any SEO crusade. Before you start boosting your site, you must ascertain the keywords that your audience is most concerned about.
C. Social Media Marketing
Social media today is grabbing the attention of all age groups across the world. For example, Twitter, Facebook, LinkedIn, and Instagrams have millions of users. When the products and services get through these platforms, the products and services get sold quickly. Often the products promoted through these channels sell because the buying pattern of many is copied without any logic.
I hope you are now clear about what is a business strategy. How to make a business model? And what are the online business strategies? Please feel free to share your thoughts in the comments section.
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