In the business world, you will always be faced with competition. To be able to survive and grow, a business strategy is what you need.
The purpose of business strategy is to achieve business goals effectively and efficiently. The intended business objectives include maximizing profit, and surviving in competition.
By following a strategic management course , your efforts will be more focused in achieving its goals. For more details, we see the full explanation.
Read Also : Know the Functional Organizational Structure
Definition of Business Strategy
Business strategy can be interpreted as a series of efforts to achieve business goals. This strategy serves as a reference for business management in order to survive in the midst of competition, and to develop further.
There are differences in the concept of business strategy according to experts, including:
1. Pearce and Robinson (2013)
Strategy is a plan ‘how to play’ in a company.
This is what gives the company awareness of its business objectives and how, when and where to face competitors or business rivals.
2. Solihin (2012)
Strategy in business is different from corporate strategy. Strategy in business, focus on improving the competitive position of a product or service from a company in a particular segment.
3. Dewanti (2008)
Referring to entrepreneurship books, strategy means a pattern of behavior aimed at achieving the vision of an organization or company through its various missions.
From some of the concepts above, it can also be concluded that business strategy is a tool for large-scale long-term planning of an organization or company.
With the hope, using this strategy can help a business achieve a competitive advantage.
Read Also : Studying Home Business Opportunities with Small Capital
Principles of Business Strategy
To be able to produce the right business strategy and also effective in achieving business goals, you need to understand the basic principles.
The basic principles in making a business/business strategy are:
1. Based on Data
Strategy making cannot be based solely on instinct, estimates or assumptions. You need accurate data as a basis.
To get accurate data, you need to conduct research to analyze it.
With accurate data, you can take the right steps in an effort to achieve your business goals.
It can be data on consumer behavior patterns, needs and wants, as well as fluctuations in sales and complaints about your product.
From these data, you can more easily make decisions regarding business continuity, as well as increasing sales to maximize profits.
2. The Right Business Approach
To be able to ensure the strategy that will be executed, then you need to make an approach beforehand.
Make sure the approach is in accordance with the business you are running.
There are several choices of approach methods that you can try to apply. These methods include:
- SMART analysis. The goal is to test as well as know the quantitative of an activity. From there, the ideal value for an activity will be known, in the form of a SMART analysis map that contains an increase in activity or activities
- SWOT analysis that helps solve problems by assessing the plans to be executed. The method is to compare internal factors (strength & weakness) and external factors (threat & opportunity).
- Optimization theory, to assess conditions as well as current constraints. The assessment is based on infrastructure, personnel, equipment and also the budget.
3. Determine the Specific Strategy
By referring to the data as the result of research, then you can determine a detailed or specific strategy.
Do a breakdown to divide the strategy based on each area in a business or venture. Not only for large-scale businesses, but this applies to small businesses too.
The goal is to make it easier to apply this strategy in your business according to planning. Because there is already a strategy in each field according to the needs.
Read Also : How to Calculate Personal Income Tax
4. Evaluation
After the strategy is applied to each field, don’t forget to monitor it. That way you can immediately evaluate when the results are not as expected.
The division of strategies that are specific and based on data, makes it easier for you to evaluate strategy performance as well as find solutions to various obstacles.
Through monitoring as well as evaluation, you can more quickly identify any business threats that must be given immediate preventive action.
In addition, it is also easier for you to identify business opportunities that must be utilized immediately.
Example of Business Strategy
Running a business must be supported by a strategy. That way the potential for development or at least its ability to survive in the midst of greater competition.
The following are some examples of business strategies that you might inspire.
1. Acquisition
This strategy focuses on expanding the reach as well as the customer base. The closest example is Facebook which acquired WhatsApp , Instagram and several other platforms.
By acquiring competitors, Facebook has succeeded in expanding its reach and customer base. Competitors are reduced, the business is growing.
2. Product Differentiation
In this way, it allows you to have your own market. The most important thing is to always innovate and dare to be different.
Be a pioneer and not just a follower hoping to repeat the success of competitors.
3. Opening New Opportunities
Lots of startup companies popping up. Most of them open opportunities with strategies that seem floating.
This is done, to provide an opportunity for competitors to follow in their footsteps, so that the service or product is increasingly recognized.
But on the other hand, they keep some of the strategy as a business development formula. Precisely when the community has accepted and more and more are running it.
4. Digital Marketing
Technological advances that cannot be stopped anymore, make various fields switch to digitalization mode. Marketing is no exception.
You can also make this a form of strategy to keep your business surviving and even growing.
Read Also : Profit and Loss Report: Definition, Function, Types of Forms, and Important Components that Must Be There
You can take advantage of social media which continues to increase in users as a marketing medium.
It could also be through content marketing which is also increasingly popular and attracting attention.
Digital marketing allows you to reach a wider market. It’s also easier for you to build brand awareness as well as customer trust.
With this marketing method, you can also reduce the promotion budget, so that it can be allocated for production or development.
Take advantage of technology as part of the strategy. Because the continuity of your business also depends on its ability to keep up with the pace of technology and changes in people’s behavior patterns today.
5. Play Price
This strategy is most often used by business people to attract attention. Being an economical version of the product to meet consumer needs, is effective in increasing sales and surviving in the midst of competition.
Offers almost the same design and quality as the premium version. The economical version of the product has succeeded in attracting customers with a lower price.
Even so, that doesn’t mean your product has to survive as a second choice. After having loyal customers, it’s time to launch a different product.
Keep the price range as before with the same target market. However, with product specifications that are not economical versions of premium products from your competitors.
One way to reduce costs is to run good inventory management with technology such as online inventory applications . This will reduce a lot of operational costs due to cloud technology and automation.
That’s a little explanation regarding the business strategy that we have summarized. Hopefully it can add to your knowledge and become an inspiration for the business you are running.