What is a Business Strategy?
A business strategy typically is a document that clearly articulates the direction a business will pursue and the steps it will take to achieve its goals. In a standard business plan, the business strategy results from goals established to support the stated mission of the business. A typical business strategy is developed in three steps: analysis, integration and implementation.
In the analysis step of business strategy development, one of several methods is used to analyze a firm’s market, resources, obstacles to success and specific advantages. The goal of strategic analysis is to identify what a business wants to accomplish, the strengths it can bring to bear on accomplishing the goal and weaknesses that need to be addressed prior to integration and implementation. Strategic assessment methodologies can include evaluating the business environment, gaming various competitive scenarios, determining what market forces are at work and rating competitors, among others.
Integrating a business strategy usually is one of many steps in a larger business planning process. A business plan begins with an overall vision. From the vision, a mission statement for the business is constructed, usually the shorter and more precise the better. A mission leads to specific goals the business will achieve to accomplish its mission and that in turn leads to strategy to achieve goals. Specific tactics are usually then developed to support the business strategy.
This process usually begins with senior managers who then communicate the strategy to respective teams. Each team is made to understand how the strategy will affect its daily activities. Taking the business strategy to the lowest level of the company possible helps integrate the strategy throughout the firm. Business strategy can be applied to small businesses, too.
Implementation of the business strategy typically follows assessment and integration. Individual teams in the company, which understand respective roles in bringing the strategy to pass, implement the specific tactics developed to support the strategy. At the implementation stage, individual business units or teams often have a subsection of the business strategy on which they focus.
Business strategies usually include a measurement component as well. The measurement component of the business strategy is derived from the overall goals established to accomplish the business mission. Goals are broken down, usually by both business unit and time estimated to accomplish them. The business strategy includes a component to periodically compare current progress against goals. Based on how well the business strategy has led to goal achievement, the strategic analysis process is repeated to adjust the strategy as necessary.
Bhutan-I think that an example of a product that is mass marketed and applies to a wide variety of people is a DVD player.
DVD players can be found in virtually any big box retailer as well as an electronics store. They market these machines based on price because they are so readily available.
Buying a DVD player for $20 is not unheard of so most people look for the lowest possible price when buying these machines.
People that buy the Prada bag, however, will pay whatever price it is because they want to portray the image that Prada offers.
This brand wants a certain level of exclusivity and it maintains a very high price which consumers are very willing to pay.
This would not work with the DVD player because the DVD player is sold in so many stores that the consumer has many options when buying the product.
Deciding which stores will carry the product is also a business strategy planning idea that most firms have to consider before the item goes on the market and the business strategy implementation takes place.
Suntan12-I have done focus groups and they are a lot of fun. I think that a business pricing strategy is also important.
If a company understands their target market it will also help to determine the appropriate pricing model. Some business strategy planning involves exclusivity with a premium price while other products follow a mass market approach and discounted pricing.
For example, a product like a Prada handbag is a luxury item that is found in select upscale stores and boutiques. The image of this product is that it is a high end luxurious handbag that not many people can afford.
This makes the handbag sought after which is exactly what the company wants. The target market for this handbag is image conscious which is what this product offers.
The business strategy implementation for this product is to remain very exclusive and only to offer the product to very high end stores. The business growth strategy might mean expanding the product offerings but only in these select stores.
Icecream17- The company can use the information to enhance it marketing strategies or improve the product in order to provide a higher level of satisfaction.
Sometimes these focus groups involve only competitive information. This type of focus group seeks to gather market intelligence on competitors in order to provide a more superior product.
Sometimes companies will offer their customers surveys to also help them find out how they can reach more customers and satisfy those as well.
Once they have narrowed down their target market and understand their strengths and weakness developing a targeted advertising campaign is easy. Many small business marketing strategies follow this format.
A business marketing strategy requires conducting significant marketing research. Often a business strategy for marketing involves finding out who the target market is and capitalizing on the findings.
A company may contact a market research firm to perform a focus group. The focus group is selected by demographic information that most likely resembles that of a typical consumer of the product the company is trying to sell to.
This focus group is asked questions regarding the actual product as well as the competitors that sell similar products to find out how the company and its competitors are received. In addition, his can tell a company what the product is lacking, or what the perception of the product is. This valuable information helps the company develop its business strategy planning model.
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