Business Strategies: Beating the Market
Many businesses are inefficient but don’t often know they need change until their profit margins begin to decline. By this time these businesses struggle to make payroll instead of striving to achieve greater market share and higher profits. Before the business’s options become limited it is often beneficial to start thinking about aligning processes to business strategies yet one must define the business first.
Define Your Business: Defining what your business really is, the true worth of its products and what the corporate values are is not an easy task. It takes a considerable amount of “soul searching” by owners and management to come to a definition that is easy to articulate and understand. Once found this definition acts as the “guiding principles” to your business’s success.
It is important for business owners to begin the process of defining their underling assumptions, determine the businesses boundaries, and define their business strategy (Hakansson & Snehota, 2006). Without this important approach it is likely that the approach and method used by the business will be flawed and haphazard. Only with a clear definition of the business’s “reality” can the company move forward to greater success and down the path of improvement.
Know Your Strengths and Weaknesses: Knowing your businesses strengths and weaknesses is not some useless task designed to waste the business owner’s time. The benefit of conducting a Strength-Weakness-Opportunity-Threat (SWOT) of your business as well as the competitions will let your business know where it truly stands in the market and how it can improve it’s over competitiveness.
Despite the importance of knowing the strengths, weaknesses, opportunities and threats many businesses are hurt by the lack of such knowledge (Houben, Lenie and Vanhoof, 1999). A business owner can compare his/her business to that of its competitors to better understand their market position. This can be effectively understood by moving through each of the sections until they are fully understood.
Developing the Corporate Strategy: Corporate strategy is the defined method of how the business is going to engage consumers, what products it is going to offer, the cost of the products, the role of the company, its human resource strategies, etc… These decisions are based upon the definition of the company and the SWOT analysis. The strategy will act as the business approach to higher profits.
Upon the completion of a solid business strategy the entity should then begin to adjust its procedures, policies, human resource initiatives, etc… to those business strategies. The more aligned the inner workings of the business to the business strategy the more efficient the organization becomes. The goal is to cut out any wasted effort that doesn’t contribute sufficiently.
Continuous Improvement: One you have defined the company, have conducted your SWOT, and have your business strategy (and alignment) in place you can then begin to monitor for continuous improvement. The goal is to continue working on improving your efforts. This can be done by developing a system of inspection or other feedback loops that allow the business to monitor its growth.
Redeveloping your business for greater profit opportunities isn’t an easy job. It requires much thought and a guiding hand. If you are unsure of how to develop these high profits but are sure that you need to start the process then you might consider hiring help like a consultant. Such consultants should be experienced, educated and easy to work with. Visit http://www.MCAconsulting.net for more information on consulting.
Hakansson, H. & Snehota, I. (2006). No business is an island: the network concept of business strategy. Department of Business Studies, University of Uppsala, Sweden.
Houben, G., Lenie, K. & Vanhoof, K. (1999). A knowledge-based SWOT-analysis system as an instrument for strategic planning in small and medium sized enterprises. Department of Applied Economics, Limburg University, Universitaire Campus, 3590 Diepenbeek, Belgium
