A business that’s growing and hopes to sustain that momentum must have a set of strategies to guide its program development, create a solid financial foundation, and prepare for setbacks that lie ahead.
So, a strategic plan is a vision for the company’s future and the basic actions that’ll help you achieve that future. Thus, a good business strategy must have goals and objectives, desired outcomes, metrics to measure your progress, timelines, and budgets.
Here are four business strategy principles to a more secure future.
1. Compete to Be Unique, Not to Be the Best
The most effective business strategy isn’t about being the best. It’s about being unique. Competing to be the best in business is one of the major misconceptions about being successful.
Most business owners compare competition in business with sports, where there can only be one winner. But competition in business is more complex. In business, we can have many winners and it’s fine. Within a single business industry, there can be several companies beating the industry average, each with a different, distinctive strategy.
So, the worst possible business strategy principle is to look at the best player in the industry and just try to copy what they do.
2. Compete for Profits
In business, it’s all about making money. And, having the largest market share or growing fast doesn’t matter if you aren’t making enough profit.
So, the “I want to grow my company” isn’t a good business strategy. This is essentially the same as saying, “I want to be rich.”
Those things are good but they don’t happen by themselves. This is because “growing” isn’t a strategy, it’s a consequence. So, if you want to grow your business, focus on growth areas which will help you reach potential that will bring more profit.
You need to have a clear choice of WHO you want to serve and a clear choice of HOW you’ll serve those customers.
This is about connecting the outside world – the demand – with your company, and the supply. So, you must have a value proposition for a specific customer segment and you must have unique ways in the value chain to serve those customers.
This means that you can’t be everything to everyone. Instead, target a specific segment of potential buyers with the same needs and pain points. Then tailor your activities to meet those needs.
4. Learn to Say No Often
After defining what you want to go for, as well as setting a clear value proposition for a specific customer segment and developing distinct, unique activities in your value chain to serve the needs of those customers, you’ll realize there are many things you will not do. There will be customers you will not serve, activities you will not do, and services/products you won’t be offering.