New companies often face unique challenges. Specific strategies, such as identifying product strengths, adjusting pricing, or acquiring another business, have historically been used to get a small enterprise off the ground. Understanding these business strategies, and skilfully implementing them, can help entrepreneurs achieve success.
Unfortunately, many busy small business owners get so caught up in tactical daily management of their company and its execution like building a website, sending email, tweeting, advertising, optimizing a landing page, blogging and so on, that they are not taking the time to work on the decisions that’ll improve the performance of their tactics.
5 Key Business Strategies You Can Adopt
These are some of the key business strategies you can use.
1. Finding a new market for your product(s) and/or service(s)
A small company may adopt a growth strategy by finding a new market for its products. Sometimes, companies find new markets for their products by accident. For example, a small consumer soap manufacturer may discover through marketing research that industrial workers like its products. Hence, in addition to selling soap in retail stores, the company could package the soap in larger containers for factory and plant workers.
2. Implementing price skimming
A price-skimming strategy involves charging high prices for a product, particularly during the introductory phase. A small company will use a price-skimming strategy to quickly recover its production and advertising costs. However, there must be something special about the product for consumers to pay the exorbitant price. An example would be the introduction of a new technology.
A small company may be the first to introduce a new type of solar panel. Because the company is the only one selling the product, customers that really want the solar panels may pay the higher price. One disadvantage of a price-skimming is that it tends to attract competition relatively quickly.
3. A price differentiation strategy
Small companies will often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service.
For example, a small manufacturer or air purifiers may set themselves apart from competitors with their superior engineering design. Obviously, companies use a product differentiation strategy to set themselves apart from key competitors. However, a product differentiation strategy can also help a company build brand loyalty.
4. Knowing who your competition is
Knowing your competition may seem obvious, but it is one of the most important business strategies you can have.
When someone is looking to buy a solution to a problem, they will quickly make sense of the alternatives to compare against—your competition. However, most entrepreneurs haven’t specifically defined who their real competition is and don’t focus their messages to create clear differentiation for their buyers. This frustrates the buying decision process and makes your marketing efforts weaker.
You need to be clear in your own mind about what your biggest competition is. If you are a e-commerce store using Shopify or Prestashop, is your competition really the e-commerce websites in your industry? Other e-commerce sites in general? Platforms such as eBay and Etsy? Facebook and Instagram sellers? Each competitor type would create different comparisons, so you need to narrow it down to one or two main competitor types.
5. Know why you are the better option for your customer
This, again, seems obvious but it is a very important business strategy. In fact, we would say it is the most important business strategy by far.
Once you have defined your competition, make a list of all the things you do differently and better. Then rank each of them by how important these factors are to your target customer. Pick the top one or two and put them on your homepage and include them in your elevator pitch.
Don’t overcomplicate this. People just want to know one or two things to move their decision along. Is it cheaper? Do you have faster delivery? Best personalized service? Are you the only accountant who exclusively serves physicians in Phoenix?
Business Strategies Are Important
Unfortunately, running a successful business isn’t a simple case of throwing up a website or e-commerce store and selling your products or services—you need to spend time planning and strategizing to be successful.