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Cases | 07 July, 2020

Why Your Business Needs a Strategic Plan

Hi there, my name’s Kevin Foreman.

I’m the Founder and President of Black Sheep Business Consulting, BSBCON.  We specialize in three things:

  • Writing business plans for loans or investments
  • Helping companies develop unique, sustainable initiatives.
  • Creating innovative strategies for established businesses.

In this article I’ll explain what a strategic plan is, what the benefits are, and how we are leaders in the development of Strategic Plan’s today.

What’s a Strategic Plan?

A strategic plan outlines what makes your company unique, and how each function of your company supports your unique offering.

Michael Porter defines strategy as a competitive position, “Deliberately choosing a different set of activities to deliver a unique mix of value.” In other words, you need to understand your competitors, and the market you’ve chosen to determine how your business should react.

At the core of every winning strategic plan is a business strategy that is unique, innovative, and understands its marketplace.  You need to know what your business is, and what your business is not.

Let’s take the automotive industry for example: What’s the best car in the world?

Answer: There’s no such thing as the best car in the world.  Out of the top 100 automotive companies each has their own unique industry position.  Take a few of these automotive brands for example:

  • Toyota: Reliability, Fuel Economy
  • Bentley: Hand-built, Luxury
  • Ford: Mass-Production, Economy Pricing
  • Tesla: Electric, Eco-Friendly

 

Porter’s Generic Strategies Model

I’ve included the three categories of business strategy below, and our commentary on each.  When reading through please begin to ask yourself, “Which of these categories does my business fall under?”

  • Cost Leadership Strategy

Wal-Mart.

Do you want to compete with Wal-Mart?  Good.  We certainly wouldn’t advise you to.  Participating in a cost leadership strategy is often corporate suicide, or a race to zero if you will.

Of course, there’s plenty of industries out there.  Wal-Mart may be the undisputed cost leader of brick and mortar retail, but maybe your business is in a different field.

The challenge with cost leadership strategies is that they’re easily replicable.  No sane business owner wants to be in a race to zero.

  • Differentiation Strategy

The most popular and widely effective strategies are differentiation strategies. A differentiation strategy is an approach businesses develop by providing customers with something unique, different and distinct from items their competitors may offer in the marketplace.

The main objective of implementing a differentiation strategy is to increase competitive advantage. A business will usually accomplish this by analyzing its strengths and weaknesses, the needs of its customers and the overall value they can provide.

  • Focus Strategy

The idea behind a focus strategy is to develop, market or sell products or services to a niche market, such as a particular type of consumer, a specific product line or a targeted geographical area.

The goal of a focus strategy is to become the leader in a determined niche by serving the designated group better than anyone else out there. Your objective with a focus strategy is to be the go-to brand or product for the group you’re trying to reach.

Choosing Your Strategy

If you don’t know what your business strategy is we help you to create one that’s authentic and realistic.

If you know what your is, we then conduct extensive market research to validate your unique offering.  Depending on your industry this can take days, weeks, and sometimes even months.

I can’t stress enough the importance of having a unique, researched based business strategy.  The rest of your strategic plan and your company’s success will depend on it.

Functional Strategies

Once we’ve defined your business strategy we then assess how each function of your company will best support your business’s unique offering.

Example: Wal Mart.

Business Strategy: Every day low prices on a broad assortment – anytime, anywhere.

Business Function: Human Resources (HR)

Question: How does Wal Mart’s HR process support their business strategy of being the cost leader of retail?

Wal Mart’s HR Strategy directly supports their business strategy.  Have you ever been into a Wal Mart and asked yourself, “Does anyone work here?”  Or been less than satisfied with the service you did receive?  Wal Mart has been executing on a clear and concise HR strategy for decades.

Types of Functional Strategies

The functional strategies we specialize in building are operational, marketing, human resources, research and development, financial.

We work with clients to ensure each of these business functions has effective three year strategies.  These functional strategies incorporate key performance indicators and specific guidelines to ensure each department has a clear understanding of their role in the strategy.

What are the benefits of a Strategic Plan from BSBCON?

Value – Once created you have it for life.  We update our clients strategies annually for a fraction of the cost.

Funding – Our strategic plans can be built to successfully secure bank loans or investments.

Team – When onboarding new staff our strategic plans help clients share their company vision in an efficient and structured manner.

Sustainability – Our strategic plans outline clients’ stance on sustainability and any notable initiatives they’re engaged in.  We help clients realize their own authentic stance on sustainability.

Accountability – Our strategic plans utilize KPI’s (Key Performance Indicators), therefore outlining key milestones to be reached by specific departments of your company.

Branding – Our graphic design team will elevate your strategic plan by utilizing your brands colours and typography into a compact deck.  An end product that encapsulates your brand’s strategy into a visual presentation that is fluent, yet authentic.

The Reality

You’ve heard the statistics: 20% of businesses fail in their first year, 50% of small businesses fail after five years in business, and finally 70% of business owners fail in their 10th year in business.

At a minimum we hope this article makes you stop, and realize the importance of having a professional, up to date strategic plan.  Don’t let your company become a statistic.

Act now.  Implement the unique selling point that will bring you closer to your target audience, away from your competitors, and in an industry position of your own.

Kevin Foreman

President, Black Sheep Business Consulting