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Why Business Strategies Are Important? (8 Most Common Business Strategies)

8 Most Important Business Strategies to be Aware of in 2020

Businesses are not run blindly, you have to set your own set of goals that you want to achieve effectively to thrive in the market. However, setting goals and then working towards them without action plans bring nothing but ineffectiveness.

To ensure that the goals you have set for your business become achievable, you need to devise business strategies. A business Strategy acts as a guide for the people working in your organization to make the right decisions at the right time.

Whether you are a businessman or an entrepreneur, you will need to develop business strategies so that your business can sustain itself in today’s highly competitive markets.

Now, developing a Business Strategy from scratch is a lengthy process and takes into consideration a variety of factors that I will discuss later in this article.

Usually, the business strategies differ from organization to organization and depend on factors like industry, type, customer base, and so on.

However, in this article, I will be sharing a bunch of important business strategies that work for organizations functioning in different industries. In other words, these strategies are pretty much implemented by organizations working in different business verticals.

What is the Main Focus of Business-level Strategy?

When you set goals & objectives for your business, you need a roadmap that assists your organization in achieving them successfully. A business-level strategy behaves as that roadmap and also helps the business to gain a competitive edge and deliver better value to its customers.

In simpler words, a business-level strategy is what gives direction to the efforts of a business organization.

The most important thing you need to consider while devising a business-level strategy is that it should be in line with both the vision and the mission of your organization.

For instance, if you want to gain more market share, you need to focus more on making your products/services available at prices lower than the competitors. On the other hand, if your organization’s aim is to deliver unique & top-quality products/services, you need to focus on innovation.

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How Do You Create a Business Strategy?

As I have mentioned earlier, drafting a business strategy can be a daunting task, especially if you have little or no prior experience.

But with a little knowledge, you can make a powerful business strategy that works for your business all the time.

Being a business owner, I have been developing and modifying strategies for my business for more than a decade, and honestly, most of them worked pretty well. On the basis of that, I want to share some of the key factors that you need to take into consideration while drafting business strategies:

  • Keep the Vision of Your Organization in View

Vision is what allows you to look into the future and see where your business is going to be in the upcoming years.

To develop an effective business strategy, you need to be well-aware of the vision of your business. After all, it’s the vision of the business, which makes it much easier to define the long-term goals associated with organizational success.

Just keep in mind that the primary motive of any business strategy is to help the organization achieve its goals and make its vision a reality.

  • Set Crystal Clear Objectives and Milestones

It’s difficult to achieve long-term goals without breaking them down into achievable objectives.

Once you have set a long-term goal for the business, the next thing you need to do is to figure out the answer to the question — how to know if you are making the right amount of progress?

This is where it is important while devising a business strategy, that you divide lengthy goals into small and actionable objectives. Set objectives that make it much easier to track the progress and achieve bigger goals in an effective and timely manner.

Moreover, you can also define various milestones and short-terms goals that can also help you to know from time to time that you are making progress in the right direction.

  • Examine all the Factors that Have an Impact On your Business

It’s a fact that each business has a set of factors that affects its performance.

Being a strategy maker, you need to take into all the environmental factors (internal and external) that have an impact on your business’s operations. If you ignore such factors, it is quite possible that they will interfere with your business’s operation and your strategy will become ineffective.

Common internal factors include plans & policies, financial resources, human resources, machinery & equipment, etc. Similarly, some of the most common external factors are, namely target customers, competitors, suppliers, economic & political policies of the region in which the business is operating, technology, etc.

  • Take Inputs From Experienced Personnel

While the responsibility of developing a business strategy is limited to a few people, it’s great if you take suggestions from others also; especially the senior members of your team.

This includes your employees who have been working for your organization for a long time, or the experienced people working at the management level. It will be great to take inputs from different people as it will help you to address the issues at the ground level.

You never know you might get the idea for the next BIG thing for your business from them.

  • Performance Assessment

A key point to keep in mind when you are developing a business strategy is that it should be actionable and measurable.

Being actionable means that you along with other people in your organization should be able to work practically on the objectives and milestones.

On the other hand, a business strategy is measurable when it is possible to track the outcome of the efforts made to achieve the objectives, and milestones defined within the strategy.

You need to bring both these factors into the picture when devising a business strategy.

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8 Best Strategies Practiced by Leading Businesses

After becoming familiar with the role of business strategy and the primary factors that you need to be aware of while drafting a business strategy, it’s time to discuss the best and most important business strategies.

Before getting started, I just want to make it clear to you that the strategies mentioned ahead are quite common in all the businesses irrespective of their industries. So, if you find one or more strategies to be interesting, you can go ahead and implement them in your business without giving a second thought.

Let’s take a look:

1. Development of Innovative Products and Services

This strategy corresponds to the company’s aim of focusing more on R&D work to develop advanced products and services.

Source: https://media.giphy.com/media/ZIzN7YWNuTUYg/giphy.gif

In general, companies working in the field of technology, such as IT firms, automotive companies, space agencies, etc. follow this business strategy aggressively.

However, the strategy is also followed by many non-tech industries to develop new products that are not available in the market. Such companies make use of the latest technology in manufacturing and delivering innovative products & services to customers.

You need to invest a significant amount of money in the research & development of new products and services.

Being innovative in your business space makes it easier for your organization to get recognized easily by the target customers and thus generate a good amount of sales.

2. Expansion of the Product Line

Another strategy that is quite common among businesses is the expansion of their product line. This strategy is effective when you need to attract new customers by offering a wide variety of products.

Additionally, this strategy can also work for the existing customers as they are likely the ones who will be least reluctant in giving a try to your new products.

The strategy of adding new products will help to boost the sales of your business.

However, one particular risk associated with this strategy is that you need to give special attention to the product that you are willing to add in your product line otherwise, there can be higher chances of the failure of the product.

3. Tap Into a New Market

Within this strategy, your organization needs to enter a market that is new and has a significant amount of potential.

You can tap into new markets by selling your products or services in a new country or a geographical region. Moreover, targeting new customer segments also comes under this strategy.

The main motive of this strategy is to expand the customer base and get more sales by making products and services available to new customers.

However, giving life to a new market or entering a young market is challenging as it involves thorough research and higher risks.

4. Boost Customer Retention

Customer retention is important for any business to ensure that they have a fixed amount of market share.

The customer retention strategy focuses on improving the customer experience and making your active customers more loyal towards your products or services.

Source: https://media.giphy.com/media/3o6ZtiVC0hWIIcEKOI/giphy.gif

There are many ways of retaining customers such as delivering better customer service, giving special benefits to old customers, offering discounts to existing customers, etc. Customer retention is a common strategy to secure a certain portion of the market share that is enough for business to survive at critical times.

5. Marketing and Brand Awareness Campaigns

Marketing is an important and active part of any business. Running marketing campaigns from time to time helps a business to increase its sales and become visible to potential customers.

Additionally, brand awareness campaigns let people know about the business and what it has to offer to the customers.

In today’s modern world, digital marketing has been teamed with conventional marketing to get a better reach. In addition, social media marketing has become the preferred choice for increasing brand awareness.

Marketing and brand awareness campaigns are ideal for attracting new customers and driving more sales.

6. Deployment of Latest and Relevant Technologies

This is a particular strategy that has become popular in recent years because of the emergence of technology.

Under this strategy, a business upgrades itself in terms of the technology that helps the business operations to execute smoothly and efficiently. The technological upgrades can be both in terms of hardware and software.

By deploying the latest technologies in your business, it is possible to increase the productivity of your employees and get more work done in less time.

For instance, a leading project management software can help you to manage all your projects, tasks, and teams from a single place. In addition, there are several features in a project management tool that makes it easy for teams to collaborate and stay on top of all their work.

7. Redefine Pricing Strategy

Redefining the pricing of the products is also a business strategy that organizations implement. Usually, there are two choices that you have while following this strategy.

You can either keep the prices of your products or services low enough to attract more customers.

However, you will need to increase the production capacity of your business to meet the huge demands, and also the profit margin is low.

The other choice is to keep the prices high enough so that your product/service is not within the reach of ordinary customers. The sales will be limited, but the profit margin will be quite high.

This type of pricing is ideal if you want to offer high-quality products to your customers and emerge as a premium brand.

8. Manage Resources Effectively

Resources are important for any business whether it’s the raw materials used to create products or the workforce that manage the services offered by the firm.

By making the optimal use of your business’s resources, it is possible to bring down the costs and increase profits.

The strategy for effective resource management involves taking necessary steps to avoid wastage of resources.

By managing the resources effectively, it is possible to increase the output at virtually the same or lower cost than before. While this strategy sounds easy, implementing it can be difficult, especially in large businesses.

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To Sum it Up

Every organization needs to develop and implement business strategies to grow and mark its presence in the market.

As a business owner, I can tell you that without formulating good business strategies, your firm is not likely to survive for long.

While there are some common yet important business strategies that you should know about, it is also good to know about the factors that are useful for creating business strategies for scratch.

I hope that with the help of this article, you have understood the importance of business strategies and also got a couple of strategies that you would like to implement in your business.

Thank you for reading this,before you go

Clap: if you enjoyed reading this article, so others can find it
Comment: if you have a question/suggestion you’d like to ask
Follow: Sandeep Kashyap to read all the articles

Read More:

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Why Business Strategies Are Important? (8 Most Common Business Strategies) was originally published in ProofHub Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.



This post first appeared on ProofHub: Event Management System, please read the originial post: here

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