The Definition of Business Strategy and How to Make It

There is a lot of uncertainly in the business world. There are times when your business brings profits, but at certain times it causes losses. Therefore, it is important to create a business strategy. One of the benefits of a business strategy is to keep your business crisis-resistant. 

Not only for beginners, important business strategy planning is done by seniors as well. What are the types of business strategies and how to make them? Check out the following explanation.

Understanding Business Strategy

According to Pearce and Robinson (2013), business strategy is a series of plans by business owners to beat competitors in increasing sales profits. Therefore, it can be linkened that a business strategy is a way for business owners to maintain their business in the midst of intense competition. 

In addition to this understanding, it can be understood that business strategy is the action of business owners to realize business targets. The presence of a business strategy makes it easier for companies to determine the direction of their business in the future. 

On the other hand, business strategy is a guide to decision making regarding work in each division of the company. For employees, business strategy is the glue of relations between workers in each department. That is, all divisions will work together when formulating a business strategy. 

Various Business Strategies 

As one of the important aspects of business success, various business strategies need to be known in order to have a beneficial impact on business owners. Therefore, we has summarized various business strategies, as follows:

1. Product Packaging 

When buying a product, the first thing that leaves an impression is the product packaging. Creating product packaging creations will help your business get more customer attention. But remember, in addition to attractive product packaging, product quality must also be considered. 

2. Price

Products with affordable prices are in great demand by customers. When there are unique items at low prices, psychologically customers will be more interested in buying the product than similar variants sold by competitors. 

3. Marketing

Indentifying target consumers is mandatory for business success. A thorough analysis of consumer interests and needs as well as market trends can increase product sales. Therefore, make sure your business strategy contains reliable information related to market trends and target consumers. 

4. Technology 

If you are looking for a low-cost business strategy, you can actively use technolgy as a marketing alternative. The use of technology can reduce the cost of marketing a product or service. 

For example, when it is necessary to create advertisements, using technology such as social media to spread digital advertisements can reduce product marketing budgets. In addition, digital advertising can reach consumers more effectively than physical advertising. 

5. Content 

The use of social media for product marketing can be through interactive photo or video content. This type of content can attract the attention of target consumers so that the products or services offered can sell well. 

In addition to producing interactive content, you can also collaborate with influencers to optimize content distribution so that your business brand awareness increases. Working with social media influencers will also attract new potential customers. 

Example of Business Strategy

After knowing the types of business strategies, you can now determine which type of business strategy  best suits your business. Well, in this article we also provides examples of business strategies that can be used as a reference in planning a business:

1. Digital Marketing 

Digital marketing helps business owners to build brand awareness and increase profits at an affordable cost. One of the digital marketing platforms that is often used as a business strategy is social media. 

As a first step, you can choose which social media are often used by your target business consumers. Then, you can create current content but still aim to market the product. Don't forget to use social media facilities such as livestreams to attract customers attention. 

2. Cross Selling Products

The purpose of product cross selling is to encourage customers to buy new products related to previous consumer purchase transactions. This method is an example of a no-cost business strategy that can increase profits and attract new customers. 

3. Product Innovation 

Actively innovating products can maintain consumer curiosity about your business. In addition, this business strategy also helps business owners to find or create uniqueness in the products offered. 

If the product offered has a unique value compared to competitors, then it is likely that your business will excel in the industry. So, don't hesitate to create out of the box innovations so that your products or services are always remembered by customers. 

4. Acquisitions and Mergers

The definition of acquisition is the purchase of the majority of the shares of a small company by a large company or vice versa. In this way, business owners have the opportunity to compete in new markets while maintaining the interest of users of their goods and services from the old market. 

Meanwhile, a merger is the merging of two business owners of the same size into a new business entity. These two examples of business strategies are commonly used to make a profit in new markets as well as markets with great growth potential. 

5. Partnering 

Partnering or also called a joint venture is run by two or more business owners who form a cooperative relationship. The purpose of the business success and to expand communication networks and work networks. 

6. Improved Customer Retention 

The level of customer retention is the percentage of customers that must be maintained by the business owner within a certain period of time. This business strategy requires the business owner to find out the core values of the established business and find the right techniques to retain customers. 

In fact, for business owners, keeping loyal customers interested in subscribing to the products or services offered is easier than finding new customers. This is related to intense competition and rapidly changing trends. 

7. Improved Customer Service 

The reputation of the business owner is an important aspect that must always be improved by the business owner in order to maintain customer trust. Improving customer service can be an effective business strategy to establish positive relationships between customers and business owners. 

8. Pricing Strategy

Pricing strategy can be understood as a way for business owners to attract consumers attention.

An example of a pricing strategy is when a business owner lowers the price of a product or service. With the decline in the price of a product or service, more customers will buy from the business. 

However, it should be understood that when the business owner has the above pricing strategy, the product marketing tactics must run smoothly because the profit generated by this strategy is very low. 

Another example is when a business owner decides to keep the price as set since the business was founded, then the business owner has the opportunity to maintain the exclusivity of the product and get a big profit. 

How to Create a Business Strategy

Now, it's time for you to understand how to create an effective business strategy. Let's see the steps below!

1. Market Research 

The first step taken to create a business strategy is to do market research or industry research. The function of market research is to know the trends, opportunities and obstacles that may come your business. 

When you already have reliable data about future business prospects, you can predict business strengths that will make your business grow quickly.

2. Planning Vision and Mission 

After the market analysis has been done, you can plan your business vision statement in business strategy is to know the values and goals of the business owner. In addition, having a vision can help employees to understand the future direction of the business. 

Meanwhile, the mission statement contains an explanation of the plans and goals of the business owner in detail in a shorter period of time. The mission section should also explain the steps that will be taken to achieve the company's goals and business value proposition.

3. Making Strategic Targets

The next step is to identify the target business. This part of the business strategy contains business priorities and plans related to actions that will be taken to achieve the vision and mission according to the time set. In addition, this section strengths and weaknesses as well as market segment predictions.

4. Prepare a Support Plan 

The purpose of a support plan is a series of short-term tactical plans that serve to realize business goals. You can break down your business strategy into short-term plans as a support plan. The existence of a support plan helps each division to achieve business targets. 

5. Regularly Review Business Performance 

The thing that should not escape planning is a business performance review. Therefore, performance evaluation is important to be carried out regularly so that business success and aspects that need to be improved can be identified. 

Well, that's the information about business strategies that you need to know. As explained above, one example of a business strategy is digital marketing.