Why You Need a Business Strategy
As COVID-19 has shown, running a business comes with unexpected challenges and hurdles. Many of us have had to adjust and change our operating practices as we navigate this ‘new normal.’ However, as unprecedented as COVID-19 is, we also know that the world of business is fast-paced and competitive. The market is always changing, as are consumer demands and expectations.
So, how can small businesses best meet the challenges brought on by a global pandemic? How can a 2021 business plan remain relevant as we move into yet another COVID crisis? How can you even think about small business growth 2021 when you’re navigating a pandemic?
The answer is surprisingly simple: A clear, effective business strategy leads to success. This blog post will explain the importance of a business strategy and why all businesses, large and small, should have one.
Business strategies are like a blueprint that set out how to achieve your objectives. Importantly, unexpected events or crises do not render strategic planning useless or ineffective. Strategic planning involves an analysis of your business environment. It allows you to remain agile and flexible in this volatile business climate.
Here, we’ll first outline what a business strategy is. Then, we’ll look at techniques in business analysis as well as business frameworks and methodologies. More specifically, we’ll cover three popular business analysis tools: MOST analysis, PESTLE analysis, and SWOT analysis.
But first: what exactly is ‘strategy’?
We are always setting strategies for ourselves. They help us achieve our objectives. However, a common mistake is to confuse strategy with goals or a set of tactics. The easiest way to remember the difference is to think of three letters:
- O for objective
- S for strategy
- T for tactics.
Objective comes first because it’s where you want to get to, what you need to achieve. Whereas strategy lies between your goal or purpose (objective) and your plan for achieving this. The tactics (the steps you take) should all fit within your strategic frame. Applying this to everyday life, let’s turn a vague ‘I want to lose weight’ into a clear O, S and T. Objective: lose fifteen kilos. Strategy: diet and exercise more. Tactics: start drinking less alcohol, record calorie intake, join a gym, find friends to exercise with.
What is a business strategy?
Having covered this, it should now be easier to understand what a business strategy entails. You should think of a business strategy as a blueprint for how to meet your company’s objectives. When clearly outlined, a strategy helps guide your decisions and resource allocation. It defines what you should prioritise and the actions you should focus on. In 2021, a clear strategy will also help you overcome or address some of the challenges brought on by COVID-19.
For example, let’s say you run a restaurant and have the vague (but important!) goal of surviving the latest lockdown. Now, let’s break this down into an objective, strategy and tactic:
- objective: continuing to make money during lockdown
- strategy: ensuring customers can purchase food and drinks from home
- tactics: having a well-designed website, joining food delivery apps such as Uber Eats, purchasing more takeaway containers, offering takeaway service for customers who order online or over the phone.
Now that we’ve outlined what a strategy entails, we’ll go over some effective business analysis tools.
A SWOT analysis is used to assess a business’s current position before deciding on a new strategy. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so creating a SWOT analysis for your business involves assessing these four aspects.
This framework is designed to facilitate a detailed, fact-based look at the health of your company. It’s always useful to include internal and external data when conducting a SWOT analysis. Of course, as factors and external events (like a global pandemic!) change, so will your SWOT analysis. By updating your SWOT analysis, you can evaluate your company’s competitive position, generate new ideas, and develop strategic planning.
MOST is a popular business analysis tool. ‘MOST’ stands for Mission, Objectives, Strategies, and Tactics. This strategic framework facilitates a transition from high-level vision (your mission and objectives) to specific action points. In other words, a MOST analysis work from the top down, becoming more specific as you work your way from mission to tactics.
A MOST analysis should be carried out in this order:
- mission: what your business wants to achieve
- objectives: what important goals will help you to carry out your mission
- strategies: the approaches needed to achieve your objectives
- tactics: concrete actions that define how your strategies will be implemented.
This form of strategic planning is particularly useful when assessing an idea or course of action. Like SWOT and MOST, PESTLE is also a mnemonic. When expanded, PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental. However, certain marketing sectors replace the E (for either economic or environmental) with other words like ‘Ethics’.
When external factors change, a PESTLE analysis will help you to ask relevant and important questions. For example:
- How does the political situation in Australia affect the industry I work in?
- What are the economic factors that I need to address?
- How important are cultural changes, and how should my marketing reflect these changes?
- What technological innovations will help me to carry out my business strategy?
- Are there any new or existing laws that I need to be aware of? Are there any legislative changes that could affect this course of action?
- What are some environmental (or, perhaps ethical) factors that I need to be aware of?
How we can help
At Brainiact, we’re all about making strategic advice more accessible for small to medium-sized Australian businesses. We know these times are challenging, and many businesses have had to adapt in the face of COVID-19. That’s why our team of experts devise strategies that will help your business thrive throughout this pandemic.
Our subscription packages offer a range of business coaching opportunities that will help you to create the best business strategy for your company. We’ll focus on identifying your goals, target audience, competitors, marketing message and advertisement plan. Some of our hand-picked partners that will ensure your business competes with its rivals include:
- The Outperformer: The Outperformer’s business philosophy is all about helping other companies to facilitate a culture of change-making, teamwork and innovation. They pride themselves on having a case-by-case focus, listening to the needs of each client to devise a successful strategy. Some of their strategic services include competitive profiling, co-design programs and business advisory services.
- Pearman Media: Pearman Media are one of Australia’s largest independent media agencies. Their services include media scanning, data analysis and attribution modelling, and media strategy, planning and negotiation.
Are you looking for ways to better meet the business challenges brought on by COVID-19? Do you need help devising a successful business strategy? Are you not sure where to start going about this? Get in touch with Brainiact’s expert team today. We’re here to help.