If you are starting a new business, or if you are already managing an existing business, the foundation stone for achieving success is to have a proper business strategy.
If we look around, we can see big companies that disappear because they failed to maintain the good business strategy. On the other hand, we can see startups who could grow and flourish with a successful strategy.
To build your business strategy, you should go through the following activities. Order here is not necessary. Actually, you will find yourself moving back and forth from one to another or even overlap them together.
In case you are about to start a new business, we assume that you already have a good business idea. Alternatively, maybe you have two ideas and still not sure about which one is better.
You may read our article about Evaluating your business idea.
What are you good at? … Is it your qualified team? … your contacts within market? … a technology patent? … A good amount of cash? …etc.
It is about analyzing yourself … the key strength points that you can utilize in business.
To have a successful business, you have to look around and see the big picture. This is not limited to the scope of your industry. You should be aware of different perspective as follows.
What is happening in community? …
For example, you may find that more people prefer to go on outing and have meals outside with friends (or you may find an opposite trend where people prefer to spend their time).
You may find a movement towards a healthy lifestyle & fitness (or otherwise)
What about travel? … You may notice an increasing passion to travel among people.
That was only some examples. The goal is to know more about the surrounding community… what people like … and what they do not.
Policy and rules affect business. Therefore, you need to check the governmental policies that may affect your business.
That includes Taxes & Customs. Additionally, if the government gives support for specific sectors…. What are the sectors that receives higher funds …. Do they provide help for Small & Medium Enterprises? … etc.
Regardless your business, technology trends will have an effect on you. If you have a bakery shop, technology will be part acquiring raw materials, baking process, advertising & selling final products to customers.
A good example of using technology for a successful business is Netflix. Few decades ago, people used to rent movies from physical local stores. Netflix looked around and detected the rise of using internet. Accordingly, they built their business based on availing movie titles through an online websites. As a result, they could beat the competitors and change the market to their benefit.
Industry & market analysis
That is a core step. It is essential to look around to see the status of your industry and the market. Therefore, you should know if the industry is growing, or declining. You can know more about Industry life cycle here.
Also, you should know who are the big names, key players, and market shares. Then, you should study their strength & weakness.
Build a Vision
Vision is simply your dream… what do you want to be in the future? … How your business will look like after few years? … The answer is your vision. In brief, it is the destination of your business journey.
Part of your vision is a pure dream. Meanwhile, the other part is built on the reality and your reading for surrounding environment based on the previous points.
Should I write my vision or keep it in mind?
If you are the business owner & manager, a written vision is not mandatory. However, best practices recommend that you write it down so that you can have it in a clear format.
If you have other partners or there are shareholders, you will need to write the vision in order to share it among all shareholders.
In all cases, it is better to have a clear written vision to ensure everyone in the team has the same vision.
Sample Vision Statements
Here are some visions from famous corporates.
Microsoft (By Bill Gates): “A computer on every desk and in every home; all running Microsoft software.”
Nike: “To be the number one athletic company in the world.”
IKEA: “To create a better everyday life for the many people. We make this possible by offering a wide range of well-designed, functional home furnishing products at process so low that as many people as possible will be able to afford them.”
Volkswagen: “By 2018 the Volkswagen Group is to be the world’s most successful and fascinating automobile manufacturer”
Strategy is defined a Direction. It represents the way you will follow to reach your vision.
Building a business strategy is depending on all the previous inputs together. At this point, you should have three main inputs:
- Where you are now
- Where you want to reach
- The environment surrounding you.
Accordingly, you (alone or with other team members) sit to put your business strategy. To do so, you should find answers for several questions. For example, you should know:
- What will be the tactical (short term) goals?
- Who are your customers? Simply, define the target segment… if you are in the automotive industry, will you target a broad range of customer such as Hyundai? … or a selected niche as Ferrari?
- Are you going to do everything? … or you may outsource part of your activities.
- The organization structure that fits your way.
- How will you handle the competition? … Will you compete based on your competitive advantage? … Will you go for acquisition? … Or, will you set partnerships with some players?
Consequently, you will reach a clear image about your direction, or your strategy. As mentioned before, it is not one way process. Usually, you will go back and forth till you reach final strategy.
Finally, Strategy is a long-term thing. However, it is not untouchable. During business run, you may visit your strategy for tuning or modifications.
You may read:
the story behind Nola Cupcakes
A writer & GIS consultant … Studied the Management of Technology … dreaming of a better world.