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Creating A Business Strategy

August 17, 2016 0 Comments

In Exodus Chapter 18, we find a classic case of the need to delegate authority, and the barriers (from Moses’ perspective) to making this process work. To set the stage, it had been less than three months since the Israelites left Egypt. Jethro, Moses’ father-in-law, met Moses at Mt. Sinai. In the course of their reunion, Jethro observed that Moses was wearing himself out because he refused to delegate the task of judging the disputes of the people. It didn’t take Jethro long to see that this was a recipe for disaster. Jethro knew that his son-in-law needed a strategy to organize people, identify what needed to be done, and delegate responsibility for making sure each task was accomplished with the overall objective (have “all these people go to their place in peace”) in mind. Easy to suggest, but not necessarily easy to do. The key to success in business is not the choice of strategy. The key is how the strategy is executed.

A business strategy is a set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s future objectives. In this post, I’d like to turn our focus to the four keys to creating a successful business strategy. They are:

  1. Your business value proposition
  2. Your business goals
  3. Your distinctive business competitive competency
  4. Your business marketing focus

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1. Your Business Value Proposition

The second of the late author Steven Covey’s Seven Habits of Highly Effective People is to “begin with the end in mind.”  What are the objectives you have for your business?  “I want to make a lot of money” is fine, but lacks any details about the things you need to decide, actions you need to take, and routine business operating procedures you need to establish in order to achieve your objectives.

In the sales world, there is something called FABS – features, advantages, benefits.  When you create a business, you must understand what it is you sell, and why others buy from you.  In order to build a business strategy, you need to understand why people will purchase from you.  Knowing this, you can create your marketing message which says to the buying public: “This is our value proposition.”

A value proposition tells customers what they get from you, and why it’s important for them to get it from you. Profitability and economic value is determined by establishing a unique value proposition.  What is your value proposition?  Only after you have determined your value proposition will you be ready to develop your business strategy.

2. Your Business Goals

What are your business goals?  These can be most anything, but should refer back to your value proposition and your business strategy.  Goals are attainable benchmarks that allow you to measure how well you are doing.

For example, some Pizza delivery companies have a goal of delivering a pizza within 30 minutes of placing the order.  What percent of orders are delivered in 30 minutes or less? That’s a measurable goal.  Or, let’s say that you have a goal of keeping your prices 10 percent less than the number one company in your market.  That, too, is a measurable goal.  The key is to set goals that are quantifiable and can be compared to your competition.

Finally, once you have determined your goals, you must establish a set of policies and procedures – the “how tos” – of getting the day to day work done.  Do these procedures make sense?  Are they clearly understood by your employees? Are they easy to do, or does it take a lot of time (and therefore, cost) to follow the procedures?  The more clear, the more efficient, the easier these procedures are to follow, the more profitable your business will be.

3. Your Distinctive Business Competitive Competency

Once you have determined the answers to these questions, you next need to decide how you will compete.

Think of a basketball team.  Will you compete by focusing on the “fast break”?  Will you focus on a “half-court offense” strategy?  Will you focus on having a defense that causes turnovers and score “in transition” off the energy of your defense?  In sports, different teams are known for certain aspects of the game they play.  In the same way, YOU must decide what aspect of your business you will be known for.  Here are the three major factors on which customers base their buying decisions.

  1. The first thing people base their purchase decision on is the product or service itself. People who focus on the product and what it does conclude that it is better to pay more for something that does what they need it to do than to pay a lower price for something that is, well, junk.
  2. The second is price. Typically, people focusing on price want the highest value for the least cost.  If your prices are higher than the competition’s, and you have not communicated the value your product brings to justify your price, you run the risk of losing to the competition.  This is because, in the absence of a quantifiable value proposition, a customer will default to purchasing the product or service with the lowest price.
  3. The third factor to focus on to build a competitive business strategy is how you serve the customer and stand behind your product/service after the sale. Customers who value this want to be sure that if they have a question about how to use the product/service, or need to make a warranty claim, they WILL get an answer.

Choose wisely when deciding these things; poor judgment at this stage of your business design will lead to poor business performance later on.   Finally, keep in mind that in making these decisions, you are also deciding what NOT to do.  This is important, as there will always be things in the marketplace that will tempt you to lose focus and not do things that lead to success.

4. Your Business Marketing Focus

Once you decide how you will compete, you must next decide what your marketing focus will be.  For example, perhaps your focus is on anyone in a certain geographic area.  If you sell hotdogs outside a football stadium, your geographical reach will be very limited, and you will sell to anyone who walks up to buy a hot dog from you.  If you sell e-books through Amazon’s Kindle platform, your geographic reach is global.  In that case, you may be looking to market to specific types of buyers who are interested in the type of book you write.  In this case, you will want to sell to anyone on the planet who is part of a specific marketing niche you have targeted.

Conclusion

We’ve brought up a series of very important questions that you need to answer.  Will you market your product or service as a compliment to something else, or as a stand-alone item?  You must know who your customer is, where they are, and how they come to find out about you.   To see how I’ve developed these ideas further, take a moment to check out this preview lesson from my course, Creating Your Business Strategy.  To get a 50% discount off the course price, use the code WSQVBYRVKH

About the Author:

David Lantz is a self-published author, adjunct college professor and leadership consultant. Visit my online courses at https://generationselfemployed.zenler.com/ and like my facebook page at https://www.facebook.com/wisejargon and

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