7 Principles Of Business Strategy That Every Leader Should Know
In this post, we will mention some principles of Business Strategy that have helped several leaders to better make their business decisions and not have misconceptions about strategic management. Here are 7 principles you should know:
Business strategy is competing to be unique, not being the best Competing to be the best in business is one of the main misconceptions about strategy. Many leaders liken competition in business to the world of sports. There can only be one winner. But competing in business is more complex. There can be multiple winners. It doesn't have to be a zero-sum game - you win, I lose, or vice versa. There can be multiple winners. So the worst possible approach to strategy is to go for the best player in the industry and try to copy everything he does.
Business Strategy is to compete and make a profit. Companies must first of all make money. Then we can focus on having the largest market share or growing quickly, but saying "I want to grow my business" is not a business strategy. "I want to grow my business" is the same as saying, "I want to be rich." Those things (unfortunately) don't happen by themselves. Growing up is not a strategy, it is a consequence.
Know your industry before developing your business strategy. A company is not an island, it is part of a larger ecosystem, an industry. Each industry has its own characteristics, its own structure. This structure and the relative position that your company has within the industry determines profitability. Certain industries perform higher than others. The better you know and understand the industry, the better you can determine the elements that will make you stand out, be unique, and perform higher than the industry average.
Have a digital marketing strategy that allows you to develop concrete actions in a globalized and digital world, to enhance your business opportunities. Today, we are all connected through the internet, and having a digital marketing strategy means being on the channel through which the world moves today.
Good business strategy requires you to say NO often. If you have clearly defined your objectives, a clear value proposition for a specific customer segment, and a set of distinct and unique activities in your value chain to meet the needs of this customer group, you will discover that there are many things you will not do. do. There will be customers that you will not serve, activities that you will not perform, and services/products that you will not offer. In business strategy, choosing what not to do is just as important as choosing what to do. Using the words of the founding father of modern strategic thinking, Michael Porter: "The essence of strategy is choosing what not to do."
Business strategies require you to keep moving. Having a good business strategy means that you have arrived, competitors move, customer needs and behaviors change, technology evolves. A crucial element in determining a future path for your business is predicting these evolutions and trends and incorporating this thinking into the process of creating your business strategy. If you don't, you may miss out on the new value being created in the industry or fall behind.
Scenario Thinking is an Important Business Strategy Tool Scenario thinking is a crucial skill for anyone who wants to deal with business strategy. All leaders should at least master the basics so they don't need a strategy consultant for every thought process or at least to help them challenge the scenario models presented by the strategic consultant. Thinking beyond or what is coming can mean the difference between a successful strategist and one who is not.
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