Simply put, a business-level strategy is an outline that encompasses everything from your company policies to the actions you intend to take toward your goals. The key for any business is to deliver value and in doing so, keep and attract customers. The way you do this in part is through your business-level strategy. Ultimately, your business-level strategy will inform your position among competitors, how efficient you are, as well as how profitable you are in the long run. So how do you implement a dynamic business-level strategy, such that will keep you advancing and thriving? In this article, we take a closer look at some key components of devising a business-level strategy that works.
Figuring Out Your Business Level Strategy
The key to coming up with an effective overall strategy is to first ask yourself some important questions that will set your business on the right path toward a solution that works. Among the questions, you should be examined are the following:
- Who is the target audience and what do they value the most? So for instance, are they looking for affordability, quality, a wide array of choices?
- Are you in a niche market, or more of a broader market?
- What resources do you have available to you?
- How are you different from the competition; in other words, what makes you unique?
You also want to take the time to put yourself in the customer's shoes. This is an excellent way to gain a bigger picture understanding of your business. With the above questions, for example, try and answer them from your customer's perspective as well as that of the company. By comparing the two perspectives you stand to see some critical intersections that will drive you toward a more comprehensive business-level strategy.
After doing all of the above, you are now ready to begin thinking about the kinds of business-level strategies that might work best for your company. There are several different approaches you can take when it comes to a business-level strategy.
Cost Leadership Strategy
Competition in terms of pricing is quite common in any industry and any market. Most companies are trying to find that perfect balance between being cost-effective and yet maintaining their profit margins. With the cost leadership strategy, you are aiming to rise to the top of the proverbial heap in terms of your industry where pricing is concerned. So how exactly can you go about doing this? There are a few things you need to implement when it comes to a cost leadership strategy approach. First off, cut down on operating costs. One thing most businesses are guilty of is spending too much in terms of operational expenses and not realizing where the waste is. You could also think about lowering your prices and thereby undercutting the competition, although you don't want to go too low and risk not making enough of a profit. Again, with the cost leadership strategy, there is very much a balancing act involved, one you want to be sure to master.
Differentiation Approach
What is one tried and the true way your business can stand out—be different. To be an industry leader, you have to show why you're unique and how that uniqueness translates to being superior. So what makes your business different and thus in some way better? Is your customer service a step above the competition? Maybe it's all about premium product quality. Whatever the differentiating factor is, when it comes to implementing a business-level strategy, you need to hone in on that difference and highlight it.
The process involved here requires you to target that core demographic and get them to see precisely why you and/or your products stand out. The more you stand out, the more customers you will both retain and attract. This then means you are in a position to make more money; you may even be in a position to increase prices depending on how exactly you've managed to differentiate your business from all of the others out there.
Focused Differentiation
Focused Differentiation also could be referred to as a niche-focused business-level strategy. This is all about zeroing in on even a smaller, more niche-centered market. The more uniquely defined, depending on industry and business type, the more you can optimize your sales strategy for that market.
When you are getting smaller in terms of your marketaudience focus, you often can offer more advantages to that core group and thereby position yourself ahead of the competition. Something to think about as you implement this kind of business-level strategy: you might want to focus on an area in which you know your competition has some degree of weakness.
Focused Low-Cost Strategy
With this particular strategy, you are also focused on a smaller market segment than with other types of approaches. If your company offers one or just a handful of specialized products, this could be a good business-level strategy to try and implement. You will be focused on one feature/niche and consequently have that priced as low as you possibly can. The key to this strategy's success is in marketing. You have an established customer base ideally, now you want to push that marketing out to them. This will enable you to sell at a higher volume and thus be able to sustain that lower price point.
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