Defining the right business strategy is essential for any self-respecting company. But how to do it concretely? Let’s see some valuable suggestions to minimize the margin of error and build a winning roadmap. The target? Have a strategy capable of making the most of business activities and process management.
Definition
Creating a business strategy involves setting long-term goals and developing the means to achieve them, considering the resources available to the company. The allocated resources can be: tangible, intangible, human and financial. The theoretical foundations from which strategic business theory developed go back to military strategic thinking.
Sun Tzu’s Art of War, a centuries-old military strategy treatise, clearly proves it. The advice in the 13 chapters and the military applies to many other aspects, including the economy and business conduct. So today, many companies are inspired by the strategies developed by General Sun Tzu to define corporate strategy.
The Steps For An Effective Business Strategy
Jeron De Flander, one of the world’s most influential thinkers on business strategy, has developed some principles for an effective business strategy.
Try To Differentiate Yourself
Unlike sports, where there can only be one winner, the business world is not a zero-sum game. It is, therefore, not necessary to aim to be the best: in a given sector, several companies can coexist without stepping on each other’s toes. It is consequently preferable to implement a strategy of differentiation of one’s business.
Analyze The Industry Carefully
The profitability you seek depends on your organization’s positioning in the reference sector. Knowing the environment in which you operate better is crucial for defining the strategy and enhancing your company. If competitive pressure is low, the company is in a strong position and has good bargaining power with customers and suppliers. You Aim To Generate Value
Economic performance must be a consequence of the creation of value. It is, therefore, essential to specify how you intend to generate value and for whose benefit. Prospects are obtained through segmentation based on various criteria such as age, interests, geographical distribution, etc.
Make Choices…
The question is: “how do I want to respond to the need of a specific customer target”? The goal is to propose a value proposition capable of providing a convincing answer and linking the demand and supply sides. Trust your intuition! While this is an excellent quality for a manager, intuition alone can lead to bad decisions. In making choices, it is essential to consider objective and well-measurable criteria.
…And Waivers
Learning to say no is just as important. For example, carrying out too many projects could be costly and counterproductive. Saying no is essential in many cases: in case of promises that you are not sure of keeping, of harmful compromises, of divergence from the initial plan, etc.
Be Responsive To Change
Building an excellent strategic roadmap is necessary, but more is needed. Competitors evolve, as does technology, and customer needs and behaviors can change rapidly. The strategy must therefore know how to adapt to changing contexts. Management must try to predict future trends and emerging scenarios to avoid being unprepared. During the March and April 2020 lockdown, small traders who already practiced delivery adapted more quickly to a scenario of radical change.
Look At The Data With An Analytical Approach
Finally, the data analysis must realize hypotheses to fuel strategic reflection. The more accurate the thinking, the more likely it is to improve the company’s future path. As the digital transformation progresses, more and more companies have realized how essential software can be to exploit the full potential of data. Thus, the available information makes it possible to better and refine the company strategy.
Ferrero: An Excellent Corporate Strategy
Regarding successful business strategy in Italy, the Ferrero group is one of the first names to come to mind. It is one of the Italian companies whose growth over the years seems unstoppable. For this reason, its business model is appreciated and analyzed worldwide. Last year, the president set an extremely ambitious goal: to exceed €20 billion in turnover by 2030. Here are the main elements of Ferrero’s strategy in points:
- Penetrate markets outside the Community area. Currently, revenues from Europe make up about 2/3 of total revenues. Among the most promising markets, China and the United States stand out, as well as India, Mexico and Turkey;
- Pursue a targeted acquisitions policy. In 2019, for example, the Piedmontese company took over the confectionery activities of the Kellogg’s brand in the United States with the related production plants. Thus, Ferrero has become the third-largest chocolate group in the world after Mars and Mondelez.
- Carrying out a “green revolution” to improve its brand image: in the years to come, the confectionery giant is committed to sourcing exclusively from sustainable crops and gradually abandoning the use of plastic.
- Associate each product line with a specific target. If once Ferrero products were mainly aimed at children, today, the company can reach a heterogeneous audience. For example, the effects of the Ferrero line (Pocket Coffee, Ferrero Rocher, Raffaello, etc.) aim at an adult target.
- An upper-middle position. The Ferrero group has never made price leverage one of its strengths, preferring instead to focus on using higher quality raw materials than the average competition.
- A state-of-the-art “research and development” department. Nutella Biscuits, one of the latest products launched on the market, would have required even ten years of research!
- Wise use of marketing. If once the promotion took place through advertisements in newspapers and television, today, Ferrero is one of the Italian companies that makes the best use of digital tools. Each product line has an independent Facebook and Instagram page, and the proposed contents are intelligent and engaging.
Here is a successful post published by the Pocket Coffee Instagram page on the occasion of Valentine’s Day, capable of generating a large number of interactions with the public:
Corporate Strategy: A Question Of Organization
Meticulous planning is essential to build a successful strategy and to achieve all the set goals in the long run. The ultimate goal is to obtain and maintain a competitive advantage capable of lasting over time. And you? What do you think should be the characteristics of achieving success? And what are the other Italian companies with impeccable strategies for you?
