Startups and Business Strategy
What is the meaning of “Strategy’
Strategy is defined as the art and science of planning and marshalling resources for the most efficient and effective use.
For a Layman, the term Strategy is best understood as a long term plan of action designed to achieve a particular goal or set of goals and objectives. In other words, strategy is a management’s game plan for strengthening the performance of an enterprise. It affirms how businesses should be conducted to achieve the desired goals.
If that simple definition is understood, it follows logically then, that a properly planned strategy will be required for a startup to not only successfully launch its venture but also stay afloat in the market in the face of competition.
Why is Strategy Important?
Business ideas for a startup venture are seen in plenty. However, 90% of startups fail. Why? Because usually there was no plan in place for the business launch, OR they couldn’t foresee the changing trends and lost to the emerging players with better and effective strategies. Players who were not averse to take risks. Therefore, using the analogy of an airplane’s flight, you need a strategy not only to take off and reach a particular altitude, but also to stay in air.
If you closely examine two Companies – Motorola and Yahoo – they were pioneers in their respective categories, and market leaders. That position changed to these companies being virtually out of business. What happened to these businesses that were once giant brands? What did they do wrong?
• These companies continued with the same strategy every year without envisioning the changing times
• They were unable to foresee the future that was more tech-oriented
• They failed to collaborate
Put simply, they were not good strategists. They failed to see the winds of change and were rigid with their policies and practises. Even when business was declining, they failed to decode the problem and continued to lure customers with the same old strategies.
If this can happen to established names in business, consider what can happened to Startups. One wrong move and the investors’ money can do down the drain.
Considerations before you go to market
Before entering a market, you as a Startup owner must study it carefully. Then answer the following questions
• Do you want to collaborate or compete ( your attitudes towards incumbents)
• Do you want to storm the hill or build a moat (your attitude towards innovation)
Joshua Gans, a professor at the University of Toronto’s Rotman School of Management, revealed that every new venture must answer the above two mentioned questions, because only then they will be able to choose any of the four generic strategies (Intellectual Property Strategy, Architectural strategy, Value chain and Disruption strategy) Once your strategy is clear, you can move ahead with your business plan. As hinted earlier you have to constantly review and re-evaluate your strategy to see if there’s need to tweet it a little or change course completely. If you don’t do this, there is fear that you may be left behind competition.
As a Startup, owner you need to understand that the right business strategy is important to not only enter the market, but also to sustain a business in the rapidly changing market. Further strategy needs to be reworked as your business grows, so that both business growth and the bottom line are sustainable.
Puneet Mathur is a Certified Life Coach, Certified Business Coach and a Certified Organization Development Coach. He specialises in helping business leaders to transform their enterprise into a professionally run Company by implementing state of art systems and processes, and building a highly motivated team Puneet is an experienced business leader, with about 30 years of Corporate Leadership experience in reputed Multi National and Indian Companies in the FMCG and Chemicals sector. He started his career with Britannia Industries as a Management Trainee. He has worked varied roles in Britannia Industries Ltd. Marico Industries Ltd. Coca Cola, and the Jubilant Bhartia Group. His last corporate stint was with Jubilant Industries Ltd. As Senior Vice President and Business Head of a strategic business unit (SBU, Puneet supervised Global Business Development, Global Key Account Management, Manufacturing R&D & New Product Development. Puneet has extensive experience in Sales & Distribution of FMCG products and Speciality Chemicals (B2B business). He has a rich experience of expanding distribution reach, Sales Force Productivity, International Business Development, and Exports.
Email: firstname.lastname@example.org email@example.com Websites: www.principiumadvisory.in www.puneetmathur.in Blogs www.principiumcoaching.blogspot.com www.principiumcoaching.wordpress.com