Business Strategy

A business strategy is formulated by selecting the target audience of the product and assembling the marketing mix. A firm can assemble marketing mix elements in many different ways so that the relative weightage of the different elements will be different in the different combinations. Because of this reality, business firms are employing an abundance of strategies and strategy stances. It is a relentless race to stay ahead of competition.

Basically, however, there are only two broad routes available for forging business strategies. They are the price route and the differentiation route. In other words, any strategy has to be ultimately either a price-based strategy or a differentiation-based strategy.

Companies taking the price route compete on the strength of their pricing and the price cushions they enjoy. Normally, those who resort to the price route and compete on price will enjoy substantial cost advantages, giving them flexibility in pricing and marketing. The differentiation route, on the other hand, revolves around elements other than price. The product with its innumerable features is one major source of differentiation. In fact, any of the ever-so-many activities performed by the business unit can constitute the nucleus for differentiation.

In other words, differentiation allows the company the freedom and flexibility to fight on the non-price front. Differentiation, therefore, is a crucial option for a firm in its search for a rewarding strategy. A good majority of business battles are in fact fought with a differentiation-based strategy rather than a price-based strategy.

As already mentioned, a business unit that opts for the price route in its competitive battle will enjoy certain flexibilities in the matter of pricing of its products, and use price as the main competitive lever. It will price its products to suit varying competitive demands. It will enjoy certain inherent cost advantages, which permit it to resort to a price-based fight.

Personal Qualities Required To Be An Entrepreneur And Start Your Own Business

A lack of skill, ability and experience in certain business areas need not be a barrier to success and starting your own business. The personal qualities exerted by a small business owner overcoming deficiencies over and over again are vital and present in many entrepreneurs much more so that specific technical knowledge.

Not everyone is a master of all business attributes in fact very few are. Certainly being a master of all is a fantastic position but unrealistic while certain personal qualities are essential to fight the inevitable battles to come. Business battles the successful entrepreneur wins.

Businesses that have grown and become medium sized and bigger are not reliant on the business owner entirely. Employees are engaged with specialist skills and abilities to develop and grow the business. A sole trader just starting out has to settle for a comfortable living or have the ability to grow the business to the point where more specialist abilities can be added to the business.

Most small business owners who start a new business do so in an area where that small business owner has some knowledge, experience and skill. It is a natural progression having acquired the business knowledge and experience to use those abilities to build the business under self employment rules rather than earn profits for an employer.

The personal qualities a small business owner possesses are more likely to determine the level of success. Abilities such as hard work, determination, persistence, intuition, tolerance and aggression can be the bedrock of success. But the road to success is not all slam wham bang for the entrepreneur.

Small business owners invariably work longer and harder than employees. An employee works for wages and an adequate work performance is enough. A small business owner is more likely to be on the job at first light, miss the coffee and dinner break and twelve hours later announce he has to finish off for the day because he has to go home and do the business accounting books that he started on Sunday.

Determination and persistence go hand in glove with success. Every new business runs into problems at some time or reaches a stage where the business owner needs to be completely focused and stick with a strategy to make the plans work. Things go wrong from time to time; its normal, determination and persistence are valuable qualities to see through these times.

Aggression in forcing through a business plan may sometimes be the only viable option. Not physical violence but the heightened state of anxiety to push through the plan and make it work with controlled aggression and passion. On the other side of the coin there will be times when the small business owner has to exercise tolerance and just go with the flow.

Many small start up businesses go out of business within 2 to 3 years of starting a new business. A major cause is under capitalisation which basically means they run out of money. Liquidity is a major area of concern for every small business entrepreneur and a cautious approach to a new business can be of considerable value.

There is a strong tendency for a new business start up to borrow money and buy new equipment just to get started. Such businesses are taking a major risk the plans will work. Some plans do work but rarely it is a smooth path and a better option is to build the business and reinvest profits made.

A more cautious approach would be to start a new business without borrowing substantial funds because if the small business owner has the ability to make a success of the business and make money then they can usually do so without external funding and use the profits made to build the business in the future.

The sound reason for a small business or a start up business to borrow money is to already be showing a good financial performance. Use the extra funds to speed up future success while borrowing funds with no track record is a gamble and a gamble which fails only too often.

4 Ways to Energize Yourself and Your Business

At the start of this decade no one was waiting around the office at midnight dreading to see if the electric grid crashed, if computer-based machinery stopped, or society fell into chaos due to Y2K as we did ten years ago. Yet, I still witnessed people dreading returning from their four day weekend to the daily grind that chewed up many businesses and their leaders last year.

To revitalize a company the leader must first be revitalized. How can you revitalize yourself when the economy is still down, people still seem to be in a negative mindset, and the future is quite unclear? With these four action items you can re-energize your vitality as a leader and once again set a positive tone for your staff to follow and vicariously become more energized themselves.

1. Get a reality check

I’ve heard it said many times; things are never as good as they seem and never as bad as they seem. 2009 seemed to be a pretty bad year for most organizations. Many executives just gave up in the fourth quarter and started focusing on 2010. In retrospect, 2009 was filled with lessons. Step back from the pain and frustration of 2009 and make a list of lessons learned that can help you in the future. We all learned last year, in some cases it could be what not to do. However, aren’t those some of the best lessons to have?

2. Make a plan

Free-wheeling is no longer an option for leadership; nor is sticking directly on a plan. Flexibility within a plan is different than free-wheeling in that you have a clear understanding of destination and the ability to make adjustments. Do you have a written plan for this year? Do you have a written plan for your personal life? I’m not being pollyanna here, I know you don’t suddenly wake up one day and life is all rosy. The business side of life is still going to be a climb up the mountain, but your personal life can be a great source of energy fueling that climb. Have a personal plan as well as a business plan.

3. Find inspiration in your personal life

People are still going to reject some of your sales efforts, companies are still tight with budgets, and the country still has a ways to go before we are into positive growth. In other words, business is still going to be a challenging environment. That is why I set 50 personal goals for the year (to go with my 50 professional goals for the year) because I know I get inspired in my personal life. Who inspires you? What inspirational friends do you need to spend more time with? What friends do you need to avoid/drop/move on from? If you aren’t being positively impacted by your friends, you are losing energy that is needed to fight the business battle. Find inspiration.

4. Try something completely different

How many times last year, did you ask people to give you more, hammer them for not doing their jobs correctly, and generally focused on the negative aspects of the business. Try something different this year. Become solution-focused instead of blame-focused. Be proactive instead of reactive. Look for innovative approaches instead of cutting budgets and doing less of the same that wasn’t working in the first place!!!

Pushing an elevator button repeatedly does not make the elevator arrive any quicker. I think we fall into this type of behavior frequently when times are tough. Get real about the positives, find solutions for the negatives and get energized to lead. Because it is the beginning of a new year, now is a great opportunity to refocus, reinvent, and reenergize yourself and your staff. Get pumped to make a difference this year.