Launching your own business is a serious step. You have an idea, funding, resources. But that’s not enough. For a business to grow and develop successfully, you need a clear strategy.
In this article we will tell you what the essence of a company development strategy is and why it is needed. We will explain how to develop and implement it.
What is a company development strategy?
A company’s development strategy is a series of steps that are aimed at achieving a specific result. This term was originally used in the military sphere, but then it began to be applied in business. Creating a company’s development strategy helps to understand the following points:
- Main vector: in which direction the company works and what results it wants to achieve.
- Selecting tools : what methods will managers use to achieve their goals.
- Place in the market : how the company will be seen by partners and the audience.
- Reaction to change: how the company will react to any changes .
- Contribution to society: What benefit will the company bring to society and what role will it play in people’s lives.
When a company needs a development strategy
There are five cases when you need to develop a strategy:
- New project: the company wants to establish all processes, evaluate the choice of niche, forecast investments and identify the necessary resources.
- Developing a stable business: the organization has a stable position in the market, but expansion is required to increase profits.
- Launching a new product: The company is functioning well, now the goal is to introduce or promote a new product.
- Expansion abroad: the company intends to expand and plans to enter international markets.
- Adapting to market changes : significant market fluctuations have had a strong impact on business, and it is necessary to adapt to new realities.
If a company doesn’t have a strategy, it will be difficult to show customers the value of its products. It will be impossible to find partners, as they simply won’t understand where the business is going and what goals it has set for itself.
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This will directly affect the financial performance. Doing business solely for the sake of money is a path that rarely leads to success.
Types of Business Strategy
There are five types of company development strategies. Let’s talk about each of them in more detail.
Basic strategy
Determines the direction of the enterprise development. Affects all aspects of the business. Includes product line planning and resource allocation across all areas of activity. This is the most large-scale strategy that requires a comprehensive approach.
Example : A company is developing a long-term plan. This plan includes launching new projects and optimizing processes within the organization.
Progressive strategy
Strategy is used when a business plans to expand. For example, scaling or increasing the range of products. The main tool in this approach is SWOT analysis.
Example : The management of a restaurant chain opens new branches in other countries and introduces a new line of dishes to the menu.
Regressive strategy
The opposite of a progressive strategy. Its goal is to reduce the company’s activities and ensure business survival. Most often used during a crisis. Unprofitable branches are closed, the range of products is reduced, and the level of production is reduced.
Competitive strategy
Contributes to the formation of competitive advantages. Focuses on the development of unique approaches for each segment of the company. Most often, a competitive strategy is used in combination with a basic one. It allows the company to become a leader in its field.
Example : A company reduces the cost of its products and improves the quality of its services in order to outperform competitors and attract more customers.
Functional strategy
It is developed individually for each division in accordance with the overall business strategy. It covers the distribution of resources, coordination of actions and alignment of divisional goals with the overall strategy. The functional strategy includes R & D. This is a strategy aimed at creating new products and technologies.
Example : The marketing department develops a plan to promote a new product, and the production department optimizes processes to reduce costs.
It is important to understand that these types of strategies are not mutually exclusive. They can be used together to achieve better results.
What does an enterprise development strategy consist of?
The company’s strategy includes several key elements. They are important at any stage of business development. Let’s examine this structure in more detail:
The company’s foundations and principles. They form the company’s ideology and also determine the approach to customer service. This is the main thing at the initial stage of business development. Ignoring these principles can worsen the reputation and reduce demand for products.
Market position. Includes analysis of competitors and current market conditions. Assesses how the new strategy will affect the company’s competitiveness.
Resource Availability: Considers all resources and capabilities available to implement plans. Includes both tangible and intangible assets, such as financial investments and rental costs.
Promotion methods. Describe specific steps to achieve goals. Most often, these are tasks for the team and factors that affect the business. For example, increasing the staff or improving marketing strategies.
Risk assessment : Analyzes potential threats that could prevent the achievement of objectives. Includes economic changes, currency fluctuations, and supply issues.
How to Develop a Company Development Strategy
To develop a company development strategy, you need to conduct a thorough analysis of competitors and internal processes. You should study the strengths and weaknesses of your own organization. We tell you how to develop an effective strategy in 5 stages:
Step 1: Study the Macro Environment
The first rule when developing a company strategy is to consider all aspects that affect it. Business development often depends on factors from the external environment. It is important to study the macro environment well. This will help predict profitability. You will also be able to understand whether it is worth going in new directions.
When studying the macro environment, consider the following factors:
- Changes in legislation: New regulations and laws may affect market conditions. Check government websites regularly for updates.
- Major deals and mergers: These moves can significantly change the competitive structure in your industry.
- Population income. It directly influences how much people can and are willing to spend.
Step 2: Study the microenvironment
Study your competitors, their approach to work. This way you can get a lot of useful information. Think about what attracts buyers and what their needs are. This will help you avoid mistakes and set competitive prices.
Please use the following sources:
- Marketing research: it will give an idea of the current state of the market and the needs of the target audience.
- Competitor data: Find out what strategies they are using.
Step 3: Identify the strengths and weaknesses of your business
After analyzing competitors and external factors, you need to make email material a list of the company’s strengths and weaknesses. To do this, use SWOT analysis. This strategic planning tool combines all the information received and helps formulate the company’s goals and objectives. You can read more about SWOT analysis in our article.
Step 4: Set goals and objectives
Set clear goals and objectives for your business using the SMART principle . This means that the goals should be specific, measurable, achievable, relevant and time-bound.
Examples of goals:
- Double the number of clients within the next year.
- Launch three new online products within 18 months.
- Expand the business to the international market within three years.
- Increase annual profits by 50% within two years.
Now identify key tasks to achieve these goals. For example, to expand your business to the international market, you need to:
- Research and select target countries.
- Partner with local companies.
- Create localized versions of the website and product.
- Hire and train an international sales team.
- Develop marketing for each new market.
- Establish efficient supply chains.
Based on goals and objectives, you can begin to develop tactics.
Your steps should purposefully lead to the desired result within a certain time frame. Check how feasible your plans are and use your time wisely. For example, becoming a leader in a completely new niche in a month is impossible. And you need to understand this.
Think through your steps so that they lead to the desired result. Evaluate your progress and make adjustments when possible.
How to implement a business development strategy
Explain the strategy to the team
Hold a meeting and organize training for the team. Make sure ph numbers that each employee understands their tasks and the company’s goals. Next, appoint heads of key areas. Assemble working groups with the necessary specialists. Make sure that all team members understand their roles.
Allocate resources and determine finances
Determine what resources are needed to complete tasks. Ensure that these resources are available. Include essential and contingency costs in the budget.
Use modern technologies
Implement project management tools and CRM systems. Automate routine processes to reduce time and reduce the risk of errors.
Establish communication
Ensure transparent communication without distractions such as personal correspondence and news in popular messengers. Use a corporate messenger for effective communication.
For example, in the Compass messenger, you can create separate spaces and chats for different departments. In them, the team discusses only work issues. Communication becomes convenient and transparent.
Set up monitoring and reporting
Evaluate progress regularly. Create a reporting system. Analyze data and adjust actions as needed. Identify problems quickly and take action. Encourage employees to share ideas and suggest improvements. Collect feedback regularly and use it to adjust the plan.
