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Business journey
At its core, business strategy is an approach to achieving business objectives and outcomes that allow a firm to not only remain competitive but to grow. Strategic approaches to business are not limited to the business as a whole. Various organizational functions can have their own respective strategies – for instance, operations professionals may define a strategy to increase effectiveness, decrease down-time and improve quality. Whereas, marketing professionals may seek to build strategic initiatives that seek to promote brand awareness.
Developing a business strategy requires asking several questions about your firm’s business objectives. A few obvious initiatives that all firms are routinely working on include:
- Profitability
- Protect the Core
- Growth
1. Profitability
The goal with profitability initiatives is to cut costs with little investment required. These types of activities may include cost-cutting measures such as site consolidations, reduction in redundant overhead or delayed hiring. In addition to these operational cost-cutting measures, firms may seek to engage in business-wide efficiency gains by divesting unprofitable business units or cancelling under-performing product lines altogether.
2. Protecting the Core
A core tenet of any business strategy should be the protection of its core business. These strategies should focus on new ways to keep the customers happy. Several internal activities that businesses should be engaged in include:
- Continuous innovation and follow-on technology
- Website maintenance and improvements
- Enhanced supply chain efficiency and transparency
- New and improved distribution channels that improve access for customers
- Promoting the brand
3. Growth Initiatives
There are two kinds of growth initiatives that firms can engage in: inorganic and organic growth.
Organic growth is typically what many firms rely on for year-over-year revenue increases. It is the revenue increase that comes from its core capabilities. Examples of organic growth initiatives include new product development (NPD), improved product packaging, entering new markets , expanding commercial teams and channels to market and/or driving synergies with other products and portfolios around the firm
Inorganic growth results from the acquisition of a product, technology or company. It is intended to be an immediate cost-based play that fills a business need. These types of inorganic growth initiatives are often what most talk about when discussing strategic planning. However, organizations have many other tasks to complete when developing a business strategy.
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