With any business development, business strategy plays an extremely important role. It is not too much to consider strategy in the business sector as a guideline for business. Without this factor, your business will operate in a state where you do not know what you are striving for, which will affect both the leadership and the employees throughout the organization. However, not everyone understands exactly what a business strategy is and why is it important?
Building a strategy in business is not simple, requires a lot of time and effort and it certainly does not just stop at the words on a few sheets of paper or plans, reports. Society is increasingly developing, so businesses have to change continuously to catch up with the times. Therefore, today’s strategy must be built on practical experiences, through direct contact with customers. In this article, together with MarketingAI learn in detail what a business strategy is, as well as the characteristics, roles and ways of building an effective business strategy for today’s business.
What is a business strategy?
Basically according to Michael Porter, what is a business strategy? It can be understood that this is a collection of methods and ways of doing business of an enterprise or corporation, the purpose is to achieve the highest efficiency in business. Business strategy is the overall content in a business plan in sequence, including a series of methods, how to do business throughout a long time. This term is a concept in the science of strategy and specifically refers to strategy in the field of business. Also because of this, it is essentially not too different from the basic concepts of strategy. One more thing to keep in mind is that strategy and tactics are two completely different concepts. Put simply, tactics are part of the strategy, so the business strategy will be at a higher level and possess different properties compared to the business strategy.
Features of business strategy
After understanding the basics of what a business strategy is, the next basic content to understand is its characteristics. As mentioned above, strategy in business is a concept of strategic science, so it is not too different from the original concept of strategy. However, a strategy in the business sector still possesses its own distinct characteristics, typically its stability over time rather than the execution of a business strategy. Therefore, the characteristics of business strategy are not immutable models. If there is volatility in the market, if it is small and medium, it is necessary to change tactics to adapt, not strategy. Strategy formulation only changes when market volatility is too great.
Another feature of a business strategy is that it needs a collective approval. This is the complete opposite of a business tactic as it can be suggested and applied by individuals. The reason for this feature in business is because the degree of its influence on the business is much larger than that of the business strategy. That is why when planning a strategy for a business requires careful calculation and careful consideration of the board of directors combined with the participation of the most capable experts in the business.
Position of business strategy
Understanding the characteristics of the business strategy, you can easily see that this is part of the business strategy. If other strategies will focus on internal aspects of the business, also known as inward strategies to support the business development of the business. Typically, strategy in human resources, technology development, finance, … Meanwhile, the strategy in business is the most extroverted part when it is executed directly on the business market. In return, the impact of business strategy on the business is also the most direct to the greatest extent. From an overall strategy, then it will be broken down into more detailed sub-strategies such as: product strategy, marketing strategy, sales strategy, pricing strategy, … Although each element has separate roles and functions, but they are all constituents of an overall strategy, so they all impact on business performance and decide its success or failure.
The role of business strategy
Reading here, you must have understood somewhat about the concept of business strategy. It can be seen that the role of the business strategy is to reference the company’s own past experience or that of other external firms. Thereby, we can point out the directions for future business activities. In addition, this strategy also has the role of assigning and allocating human and financial resources to implement specific tactics.
Note that business strategies are not immutable, their success will only last for a while. Certainly, the market will continuously appear other businesses and constantly change, making the company’s strategy to be ready to change to maintain its feasibility. A business strategy is not only about capturing markets and customers, but also being competitive, beating and eliminating competitors. Therefore, another strategic role is to respond to the attacking strategies of a competitor business.
Steps to build a successful business strategy
As mentioned above, business strategy is like the backbone of any business, that is why it is vital to build an enterprise’s target system. A business that wants to develop in the right direction needs a right strategy. Below, MarketingAI will introduce to readers 4 steps to building a business strategy to be successful and effective for businesses.
The first and most important step is goal setting. It is like a guideline for the business to look forward to and want to achieve in the future. When setting goals, keep in mind that they must be realistic and need a specific way of planning a business strategy to achieve them. In particular, there are a number of special goals that businesses need to pay close attention to in the process of building strategies: revenue, profit, market share and reinvestment.
Goal setting can determine whether the business can thrive, especially with small businesses. Setting ineffective goals can cause businesses to operate in a state of “indefinite”, not knowing what to focus on. In addition, the goal is set as a measure to measure the success of the business operation of the business.
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