Effective Business Approach/Strategy

Business approach or strategy is one of the six functions in business management. It is also one of the most important functions that dictates the business’ success.

Business approach or strategy maybe different for every company depending on the industry and type of business. Although there are many strategies that are available for you, the best business approach to every business is come up with your own tailored-made strategy specifically for the type of business that you have. However, it is not very advisable to mix business strategies unless it is deemed necessary. Business strategies take time and known to be on continuous development for at least three to five years before you see significant progress. Below is a chart of three main business strategies and approach which are cost strategy, differentiated strategy and focus strategy.

Let’s start with the first three main business strategies and approach.

1. Cost. It is also known as cost leadership strategies and is most common in small business. It has a lot to do with great cost-saving skill to execute this kind of strategy. Most of the time, it is being creative to lower the operation cost as much as possible without compromising the quality. However, the low-cost operation should not affect the price of the product, thus increasing the business’ profit.

2. Differentiated. Differentiated products or services is setting apart the products or services from competitors and bringing it to the new level. It is finding uniqueness about your product and making it extra special. Some businesses add some features or add-ons to their product or services. However, it doesn’t mean that you need to have the same price as your competitors. It is okay to give your customers an extra charge for the add-ons. In fact, this strategy only works if the business owner charges the customers more than the feature or add-ons’ cost him.

3. Focus. Focus approach or strategy is just the same as niche marketing. It is dealing with a specific set of consumers. For example, a restaurant for vegan, a coffee shop, a low-calorie bake shops, or even boutique or clothing store for gothic or punk. These are all focus strategies. They target a limited number of consumers but make it a point that they are the best business to offer products and services for specific group of consumers.

Here are some other business strategies or approach that is widely used in the business world.

4. Growth. Growth strategy focuses on launching new business product or services, additional features on existing product, repackaging products and reaching out to new clients and customers.

5. Competitive. Competitive strategy is not only creating an “edge” of your product or services. It’s also coming up with ideas on how to keep up with consumers’ changing demands.

6. Structuralist. Structuralist strategy is more like having the same terms with your competitors. For example, if your competitors are given 20% discount by the same supplier as you have, you might as well make an arrangement and negotiation to your supplier to have the same privilege as your competitors.

7. Price-Skimming. This is the same as price-skimming marketing technique where in the introductory price has the highest ceiling price when introducing a new product. One of the best example is iPhone. The company or business has to make sure that they gain the maximum revenue before they drop the price for other low-end buyers.

8. Acquisition. Acquisition strategies is simply buying company with the same product lines or buying your competitors’ business for further expansion of your own business. It’s not very usual especially for small business as it requires big amount of capital to be able to do this kind of approach. What usually happens is big companies buying small business or starting company of their competitors which are promising. One of the best example is when Coach acquire Kate Spade brand in 2017. 

So those are the most common business strategies and approach that can help your business grow and succeed. -M.D.

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