A “Strategy” means an artifice or a subtlety of contrivance.
A dictionary describes strategy as an “artful means to some end.”
It is a realistic process of solving or tapping or nabbing opportunities by identifying the consistency of the alternatives with the corporate goals, policies and available resources.
Strategy brings in to notice the critical activities requiring prior concentration and special efforts.
It acts as a bridge between a firm’s objectives and its action plans or programs.
A company’s strategy represents managements answer to such fundamental business questions as -
- Whether to concentrate on single business or build diversified group of business,
- Whether to cater to a broad range of customers or focus on particular market niche,
- Whether to develop a wide or narrow range of product line,
- Whether to peruse a competitive advantage based on low cost or product superiority or unique organizational capabilities,
- How to respond to changing buyers preferences,
- How big geographic market n to try to cover,
- How to react to newly emerging market & competitive conditions,
- How to grow the enterprise over the long term.
Formulating a strategy brings into play the critical managerial issues of how to achieve the targeted results , in light of the organizational ‘s situation & prospects. Objects are the ends & strategy is the means of achieving them.
The how’s of company’s strategy are typically a blend of –
a) Deliberate & purposeful actions as needed reactions to unanticipated development & fresh market conditions & competitive pressures.
b) The collective learning of the organization over time – not just insights gained from experience, but more important, but the internal activities it has learned to perform quite well & the competitive capabilities it has developed.
What does a company’s strategy consists of?
An organization’s strategic concern is
- How to grow the business?
- How to satisfy the customers?
- How to compete with the rivals?
- How toms respond to changing market conditions?
- How to achieve strategic & financial objectives?
What are the Components of Good Marketing Strategy?
There are 10 components of marketing strategy:
1. Ongoing review & augmentation of business & marketing strategies - Are you continuing to assess the strengths and weakness of your business and its marketing strategies? Are you continuously improving your strategies?
2. Conducting Market Research: Have you estimated the size & potential of your customer market? Do you understand the industry and economic drivers in your customer markets? What are the strengths and weaknesses of your competitors?
3. Customer Perspective: Do you clearly understand the customer perspective? Very often, this is where the seed of innovation begins as we learn more about the customer perspective, we start to be able to identify new & emerging customer needs.
4. Differentiating: Will you stand out from your competitors based on price or value or developing a niche market where you are the dominant player?
5. Creating Visibility: Is your business clearly visible to your target customer groups? If not, what do you need to do to become more visible to each of the customer groups that you serve?
Developing a marketing communications strategy and branding strategies will help you do this.
6. Developing Channels to Distribute Product/Service: Do you have deep and wide channels for distributing your product and/or services?
7. Establishing a Marketing Budget: Have you realistically budgeted for the cost of all promotional activity - salaries/commissions of sales people, advertising, sales promotions, trade show promotions, print/media packages, etc.
8. Trial & Error - Do you have a willingness to finance trial & error with your marketing activities to determine what works best?
9. Tracking Results - Do you track your marketing results to determine what's working the best?
10. Following Through: Are you keeping your promises to your customers? Are your customer service and operations providing on-time, quality product?
Why company’s strategy evolve?
Every company encounters an occasion in which it needs to adapt a strategy to shifting industry & competitive conditions, newly emerging buyer preference & requirements, the initiatives of rival firms to grab the increases market share, the appearance of fresh opportunities & threats, advancing technology, & other significant events that affect its business.
A good marketing strategy provides specific goals and can include:
- a description of the key target buyer/end user
- competitive market segments the company will compete in
- distribution channels
- the unique positioning of the company and its products versus the competition
- the reasons why it is unique or compelling to buyers
- price strategy versus competition
- marketing spending strategy with advertising and promotion
- possible research and development
- market research expenditure strategies.
An overall company marketing strategy should also:
- define the business
- position the business as a leader, challenger, follower, or niche player in the category
- define the brand or business personality or image that is desired in the minds of buyers and end users
- define life cycle influences, if applicable
The strategy should specify –
- What (objectives to be accomplished)
- Where (on which industries & products -markets to focus)
- How (which resources & activities to allocate to each product-market to meet environmental opportunities & threats & to gain a competitive advantages)
The Components of Strategy
A strategy has five components –
1. Scope – this refers to the breadth of its strategic domain –the number & types of industries , product lines & market segment it competes in or plan to enter.
2. Goals & objectives – strategy should furnish the information about the desired levels of accomplishment on one or more dimensions of performance –such as volume growth, profit contribution, or return on investment –over specified time periods for each of these business & product markets & for the organization as a whole
3. Resource deployments –optimal use of financial & human resources. formulating strategy involves deciding how those resources are to be obtained & allocated, across business, product –markets, functional departments& activities within each business or product –market.
4. Identification of a sustainable competitive advantage- how the organizations will compete in each business & product – market within its domain. An position itself to develop & sustain a differential advantage over current & potential competitors ?
5. Synergy – it enables the total performance of the related business to be greater than it would otherwise be. It exist when firm’s business ,product –markets, resources deployments, & competencies complement & reinforce one another.
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