It is said that everything is fair in love and war. Well, business is nothing less than a war. If you want to stay ahead of your competitors, you not only have to give a good fight but also win it. Just the way a warrior sharpens his weapons before getting ready for the battle, a businessman has to design a strategy to take on the competitors.
Since the size and nature of every business are different, there can’t be a ‘one-size-fits-all’ strategy. There are three broad types of business strategies that most strategic management courses in India talk about:
Cost Differentiation Strategy
This strategy is all about pricing your product right. It should tempt customers to purchase your products instead of that of the competitors. However, at the same time, the price should not be too low or too high. If it is exorbitant, then customers would not pay for it. It is too low; they may think the quality is poor. Also, keeping prices lower may not cover the cost of production and generate expected revenues. So, price your product in such a way that it is a win-win situation for your business and customers.
Product Differentiation Strategy
In this strategy, you have the leverage to keep the prices that you deem necessary. The reason behind this strategy is that your product offers unique or additional features that your competitors do not. For example, if you are selling handmade shoes instead of machine-manufactured, you are giving customers the benefit of the customized product. The customer is ready to pay more because of the nature of the product. Similarly, let’s say you are providing professional home cleaning services. If your competitor provides only five services in the package whereas you provide seven in the same price, it is called product differentiation. This kind of strategy allows you to sell the product on the terms and conditions you want because your product delivers superior value.
This strategy comes into picture when the business is doing well yet the revenues are static. You want to grow your business – it could be either by adding new products, new product lines, improvising the existing product or selling the same product beyond the current geographical reach. You may also consider merger and acquisition strategy – you could either buy a new business or let another business acquire yours.
Now, if you are wondering which strategy is best, the answer is none. Each of these strategies can be used independently or holistically depending on your business goals and circumstances.
If you want to learn about these strategies in detail, join a strategic management certificate online.
For growth-oriented business owners, conquering their local market is only the beginning; their ultimate goal is to expand their business globally. Going global has a lot of benefits. For example, it helps extend the sales life of products, spreads the risk of loss, expands and grows your business.
Follow these steps to build an effective international business strategy:
Step 1: Build a Solid Foundation
Before you start thinking of expanding overseas, your company must have a solid foundation in its home country. Many other factors need to be considered before going global like do you have enough resources? Is your star team ready to juggle both your ventures? Is your business financially and structurally strong enough? It is essential to answer these questions before going global because these attributes form a solid foundation that will help your business support global growth.
Step 2: Perform an Internal Business Analysis
Even though your business has a strong foundation, do you think it will succeed in a new market? To help you figure that out, you need to perform internal business analysis. This will also help you identify specific resources, core competencies and capabilities.
Step 3: Develop an International Strategy
It is very essential to remember that each market has its own distinct characteristics, culture, economic market and government environment. You need to create a localized strategy for each location keeping these factors in mind. The strategy will help you improve the odds of success in varied markets.
Step 4: Break Down Cultural Barriers
Another essential factor to keep in check while building strategies for international business of your business. If you really want to up your game, you are going to have to work with the locals who are familiar with the culture and language of the new place.
Step 5: Differentiate your Product Line
The main purpose of this step is to have your product stand out from both local and foreign competitors. Make sure your product doesn’t have any offensive meaning when translated to another language. Also, take into purview initiating a patent and trademark review and do not forget about distribution and logistics network. Figure out who can sell your product and how your product will get to them.
Step 6: Get the Legal Documentation in Order
Many countries are extremely litigious; they need everything in order before they permit you to start operating in their country. Make sure you have all the necessary legal documents in order to protect you against any risks and liabilities.
Step 7: Prepare your Final Budget
Create at least a 5-year budget that includes key performance indicators and quarterly review systems to share with your team. Keep yourself updated regarding any changes in the laws whatsoever and set up a real-time budget.
Get Ready, Go Global!
Be consistent but adapt to the environment. Before making any hasty decisions, scout the internet; check out links to online strategies for international business. This will help you stay ahead of time and reduce the risk of failure. Also, you can opt for online courses that advise on strategies for international business. A certification in international business can help you test the waters before you go out for a swim.