Business strategy is your roadmap for getting from point A (your company’s current state) to point B (your business goals).
By Andrey Drozhzhin
It makes the path clear and measurable. No wonder experienced c-suites consider a proper strategy one of the key ingredients for any enterprise’s success!
The problem is, there are literally hundreds of types of business strategies. How do you choose the one that best suits your company’s needs, structure, and capabilities? In this piece, we will:
- Cover the major schools of thought on business strategies
- Discuss why some organizations fail despite building seemingly perfect strategies
- Explain how to select THE strategy for your business
Schools of Thought on Business Strategy
Schools of thought that study business strategy are far and wide. There are literally hundreds of them! This abundance is due to high demand for relevant and efficient planning by business owners, and due to most strategy ideas deriving from predecessors in different areas.
Because of this, the easiest way to classify various schools is by looking at the key aspects or behavior patterns that they focus on. Here are some examples:
Thoroughly test and try things out at a small scale first, before investing or risking too much.
- Minimum Viable Product (MVP)
Ship your products as early and often as possible to faster test them “in the field” and get real-life feedback.
Find the product or solution that works, and scale it out.
To produce more value, put more capital and labor to work.
Constantly look for new markets to enter, and new business areas to explore.
Build upon the success of others by implementing their offerings, or building your business around them.
- Information Advantage
Utilize your information superiority, e.g. by identifying a valuable latent need of your target audience.
- Social Capital
Build relationships with your stakeholders – customers, partners, employees, influencers, etc.
Find ways to help yourself by helping your partners and customers.
Find ways to help yourself while also defeating your competition.
Why Some Seemingly Perfect Strategies Fail
So, with so many business strategies to choose from, how come some organizations fail despite using them? More often than not, the reason is the same: the strategy that the business chose is either not worth executing, or impossible to pull off. Below you will find the most common mistakes when it comes to choosing a strategy.
- Oftentimes, the chosen “strategy” is hardly that at all. This is especially common when a business owner is trying to come up with a strategy on their own, without employing a specialist. What you get is an unactionable, idealistic narrative and a ton of money sunk in trying to implement it.
- Another problem is when a “strategy” turns out to be, in essence, mere goals. They state what the firm is looking to achieve, like “increase operational efficiency”, but give no clear directions HOW to do that.
- Other firms fail in a different department. They state a couple of the business’ priorities (each may be perfectly viable on its own) that hardly form a coherent plan of actions when taken in conjunction.
- The last scenario is arguably the most frustrating. You develop a perfectly competent strategy that has all the chances to go with a bang. But then, you royally screw everything up by not following through with the finishing touches like recording your new strategy in a clear, actionable form, and communicating it to all stakeholders.
How to Select THE Strategy for Your Business
To find a strategy that best suits your corporate needs, you must first perform a thorough analysis of your business and its key aspects:
- What are your high-end, long-term goals?
You absolutely need to know what objectives you’re aiming at before choosing a strategy. Does your company need to increase sales ASAP, or do you perhaps need to secure your position on the market? Setting specific, measurable goals is a must.
- What is your current situation?
Take a look at your past performance and all the areas of your business. You want to determine your success drivers, identify existing opportunities, and detect what currently hinders your firm’s success. SWOT analysis works great at this stage.
- What is your Vision?
Based on your long-term goals, describe the direction your business will be moving, its purposes and values.
- What is your Mission?
With the Vision showing you where you want your business to go, the Mission will tell you how you’re going to get there. This is where you thoroughly study your business’ target audience and competition, and figure out your value proposition.
Once you answer all these questions, it will become clear what strategy suits your business best. Are you a small startup with a few great specialists in your team? The information advantage strategy might be your pick. Got a large business that’s stuck with a single successful product? Try applying the MVP strategy, and so on.
Hope this small guide will help you find the business strategy that will bring your organization to success. Good luck!
Andrey Drozhzhin is an MBA with 20-year experience in business development and commercial operations. He has successfully facilitated the launches of numerous business projects. Strategic management is his great passion. Currently, he leads a strategic-planning project Roadmap Planner at KeepSolid.