Business Strategy

Digital Marketing - Study Notes:

The purpose of a business strategy

What are the reasons for a business strategy?

• Definition: A business strategy is the methodology or the way in which an organization perceives that they are going to win in a particular sector, marketplace, or any environment in which they operate. It's important that they have this robust plan because there are a number of ways in which an organization can operate in it any time. Defining how they are going to position themselves and how they are going to win is important.
• Harmony: Often, employees will suggest that there is no business strategy or that it's not communicated. And if that is the case, then nobody really knows what they're aiming for. So, to create a harmonious environment within an organization, a business needs to undertake a robust strategic approach.
• Forward thinking: It's not just about how we are going to win today, but it's how is the marketplace evolving for tomorrow and what our position looks like tomorrow if we are to win in that space. A forward-thinking approach is critical.
• Marketplace advantage: A strategy shows how we are going to gain a marketplace advantage. Clearly most organizations operate marketplaces where there is intense competition.

Align with organizational goals

How you are going to differentiate yourself to win in the marketplace is critically important.

• Creation: You need to adapt the business strategy to align to the organization's overarching vision and goals. So, in many ways, the business strategy can be crafted at the same time as the organizational goal. Aligning the strategy creation is very important.
• Communication: You then want to be able to, especially in large organizations, have a robust way to actually communicate that strategy to your population or to your employees. In fact, you may want to communicate it more widely than that across your various stakeholders, such as shareholders or other suppliers that need to know exactly the direction that you're going down to be able to help you along the way.
• Execution: There needs to be alignment between executing your goal setting and how exactly you intend to take it to market and make it a reality. There's no point if a strategy just sits, and lives, and breathes on a page. It has to be much more than that. It has to be a fluid document. That will encompass how you intend to go market and win in the various spaces that you're going after. Having an action plan, for example, with different phases is critical in this respect.

Product strategy creation

A product strategy is important because the product, in essence, determines how the customer perceives you. What exactly are you planning on selling in the marketplace? Does it fulfill a consumer need? Also how is it differentiated between you and your competition?

Market needs

Ultimately a product-based strategy has to add value to someone, somewhere along the line. Now that can be the end consumer. Or you could be part of a larger value chain which then aids, or forms a component within, a larger product which then helps a consumer at the end. So you can go for a B2C play or a B2B play.

Corporate goals

The other thing to think about is how your product-based strategy will achieve the overarching corporate goals. Often, it's the case that a small, young organization may start as a B2B player, but have an ambition to move into a B2C world, perhaps in a few years' time, once they've gained traction and got cash flow. A product-based strategy could actually aid both a B2B while it's gaining a key capability to actually create a B2C strategy as well. So how you then create a linear path is quite important.

Features and innovation

How do you future-proof yourself? Think about some of the key features and innovations which either complement existing products or enable you to get one step ahead and think about where the market is moving. You can capitalize on that and get ahead of your competitors.

SWOT analysis

Competitor analysis is another key aspect. The key tool is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. Understanding both internally and externally what the market opportunities are out there and then how you as an organization can take advantage of them is vital to the success of your organization.

You could also do it in the opposite way, where you analyze the opportunities and threats first. Then you bring it back to determine how well your organization is placed to take advantage of some of the opportunities and mitigate against the threats.