Strategy is perhaps the key thing in business. It is it that allows you to receive competitive advantages, set goals and effectively achieve them.
Here you need to make a reservation: at most popular business trainings, the marketing strategy is turned into a step-by-step action plan. It is not right. A detailed action plan is called tactics. And, although in business it is no less important, now we will talk exclusively about strategy.
First of all, the marketing strategy provides you with escape velocity – the degree of separation from competitors. These are the advantages that we get by thinking strategically and understanding where we are going in business and how expensive. We are aware of the place we occupy in the market, we know our target audience – in a word, we imagine what we sell, to whom and how.
It is very interesting to study the marketing strategies of large companies like Apple – what tools they use, how much data they collect, how much money they spend on market research, etc. True, all this has nothing to do with small business. We cannot work with the strategy in the same way as it is done in large companies, we simply do not have such resources. But do not consider this a minus – then you will understand why.
The work of small (from two to seventy people) companies has its own characteristics.
Firstly, planning practically does not work in them. Small business, as a rule, has no idea what will happen to it in 2-3 months. Entrepreneurs need to learn to work in conditions of uncertainty and unpredictability of the market.
This is not always easy, but such skills give a great advantage in the market. After all, while small businesses are adapting to new trends, large companies for the most part remain extremely slow. They are not able to change quickly – especially when they already have a plan planned for six months to a year in advance.
In a small business, if something suddenly ceases to be profitable, literally in a day you can change the methods of work, and in extreme cases – generally redraw the company completely. This, by the way, creates certain problems for statistics – because every two or three months you actually have a new company.
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So how to build a strategy that will really work in these conditions?
Any strategy starts from point A. This is the situation in which we are at the moment. It is useless to try to set any goals for yourself, not knowing your point A. If your company now has multimillion-dollar debts, it is strange to plan to make a billion rubles for the coming year. Agree, in such a situation, a more adequate goal would be to reduce the debt burden during the year by n-percent.
Point A is composed of:
- analysis of the internal environment;
- definition of company problems;
- seeking benefits.
Immediately caution: do not get carried away too analytics in small business. You simply don’t need it if your goal, say, is to increase turnover from 500 thousand to a million a year. You can do this without any problems in any market, even by simply improving the quality of the product. Do not think that the result is directly dependent on the amount of work done. Good marketing is doing little to get a lot.
The less action you need to get the result, the better. Because strategy is not only what we do. This is also something that we do not do, where we do not go, with which clients we do not work.
In short, point A is a market analysis only to the extent and to the extent that we need it.
Point B is the goals we want to reach. Moreover, it is better to set short-term goals. They should be approximate in time, if only so that you can quickly find out what has worked in your business and what hasn’t. And why. Naturally, the goal should be as specific as possible. Compare – “improve product quality” and “increase turnover by 30% per month.”
If the goal is set correctly, but not completed within the agreed period, there is also something to think about. How much is it not fulfilled, by 5% or 95%? Somewhere they didn’t screw it up a bit and it is necessary to continue work, or do we basically have no competencies for its implementation now?
Once again, a strategy is how you get from point A to point B, based on an analysis of the market and competitors.
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Consider three strategic marketing tools that will help determine the point A.
1) VRIO – a tool for assessing the internal environment of a company according to the following points.
1. The value of your product in the market.
2. The rarity of your product in the market, the level of competition.
3. How product prone to copy. Do you have any exclusive resources that are impossible to copy?
4. The goals of the company, what do you want to achieve.
2) PEST – to assess external factors (political, economic, social, technological).
It is important to do this after you have figured out VRIO. Imagine: from an analysis of the internal environment, you learned that the product you frequently find on the market has low value, it’s easy to copy, and now you are only talking about how to consistently earn one and a half million rubles a month. Then, in principle, you do not need PEST, the external environment affects you a little.
In general, there’s no point in deeply diving into the external environment – in small business for PEST expert analysis via the Internet and collecting statistical data that can be found in the public domain are quite enough.
Separately, it must be said about the last environmental factor.
Even if you are not doing the whole PEST, it’s still extremely important to understand what is happening in terms of technological progress in your industry. Be prepared for the fact that technological advances and digitalization can completely destroy your marketing strategy. Instantly. Remember how the rapid development of mobile communications is actually bold pagers from the face of the earth.
3) BSC or BSC – a balanced scorecard. The essence of the tool is that we take our main goal and decompose it so that each employee of the company understands what exactly he needs to do to achieve it.
These three tools are extremely good for small businesses, because they are done in a couple of days and do not require costs.
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What do we do next? We choose one of the standard strategies. There are five of them.
1. Classical. The same strategy when we are working on saving costs, we actually make a conveyor out of the company and take it mainly at a low price.
2. Visionary. Startup strategy. We are good at predicting the market, therefore, we always remain “in trend” and introduce the most advanced tools.
3. Formations. Platform strategy – appstore, aviasales, etc., we work for market players.
4. Conservation. Temporary strategy in the case when everything is bad – competitors are pushing, there is no profit, we are drowning. We chop off everything unnecessary, reduce staff, forget about growth and try to maintain performance at the level that we have now.
5. Adaptive. Perhaps the only one suitable for small businesses. It is also called a drift strategy, a tailwind strategy. We are flexible, adaptive and constantly ready to go for experiments. Quickly do, quickly look at the result: does it work? If it does not work, we mercilessly collapse everything and try it differently. We can say that this is a “strategy without a strategy.” At the same time, it sometimes allows small businesses to compete even with large players in the local market.
So, when we decided on positioning, strategy, analysis of the external and internal environment, we are talking about segmentation, about determining our target audience. First of all, you need to understand that you are selling a client not a product, but a certain value (relatively speaking, not the number of revolutions of your juicer, but the number of glasses of juice per minute). Therefore, you should not represent your client’s gender / age / level of earnings, but why does he need your product.
Am I buying an French course in order to gain knowledge – or in order to have fun and have fun? In the first case, the competence of the teacher will be important to me, intensively with native speakers, quick effect. In the second – large groups, the duration of the course, the unusual approach, etc. In fact, in these two situations I will be two different customers – although neither age nor my status will change.
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So, a summary of an adaptive strategy for small businesses.
- Quick strategies;
- readiness for constant changes;
- focus on marketing;
- continuous collection and analysis of data.
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The market is volatile now, get used to being flexible. Your strategy will constantly change, and this is normal. Why focus on marketing? Because, alas, a small business is unable to work with a product in a quality manner. In terms of service, we also do not compete very well. Small business can be a competitor only in terms of marketing – in terms of positioning and segmentation.
This implies the need for continuous data collection and analysis. You need to understand which services / products sell better, and who buys them – this simply requires customer surveys. Moreover, you need to call and communicate with them personally, preferably if it is not the manager who will do this, but, for example, the general director – it’s not so difficult to do in small business. Thank customers for their feedback, for the fact that they directly indicate your mistakes – do not be afraid of this. It is much easier to collect data when you have 100-500 customers, and this is also a big advantage of a small business, do not neglect it.