What Is The New Business Strategy in 2012?

Most managers and executives are looking for ways to constantly develop a business strategy that works for their business. In 2012, a business is considered successful if it is return-driven. Return-driven businesses are those that plan and implement business activities consistently with the tenets and foundations and exhibit extraordinary financial results.

Studies have shown that these types of businesses follow the Return Driven Strategy (RDS). RDS provides an understanding of what specific types of business activities drive the highest levels of wealth-creation. With its foundations in one of the most advanced financial modeling frameworks, it provides a business strategy for forecasting the potential for a particular initiative to create wealth or destroy it.

Concepts of RDS

There are often misunderstandings about business strategy that have led many companies to destroy value, or have severely limited the wealth that could have been created. But there are specific concepts supported by the framework that have led to business success, such as:

- Businesses with great products are often not great businesses

- When to shrink and grow rich - or grow and be poor

- Why "first mover advantage" is often anything but

- The undeniable financial impact of business ethics on performance

- "Being different" is a by-product of great strategy, not a focus

- How a monopoly, generally so desired, will cause valuations to stagnate

- The difference between a great company and a great stock

- The real customer needs are seldom the obvious ones

- How treating employees as customers generates higher returns to all constituents

- Which is more important, strategy or execution? Both.

The highest benefit that RDS gives to management is better resource allocation: the prioritization of time and efforts in planning, analysis, and implementation, which are critical in adding value to a business.

As projects compete for capital, time, and resources, Return Driven Strategy can assist management in choosing and timing the actions that are best poised for achieving the organization's goals.

About the Strategic Management Framework

The RDS framework appears in pyramid form, in order of importance in long-term performance and valuation impact.

The framework is in use in strategic planning and management consulting at firms with revenues ranging from a few million dollars to billions annually. Some of these organizations have been large, publicly traded companies. Others have been privately-held or family-owned businesses.

Business strategy executives from a number of the world's largest and most successful companies - and from some of the most troubled - have attended Return Driven Strategy seminars, and spoken in panel discussions and speeches about the future of their firms.

Small Business Strategy: 4 Vital Tips for Success

Your small business strategy rests directly on the foundation of your marketing system; and if you don't have a marketing system and you're not planning on creating one, then you have no small business strategy. End of.

If being successful in business is important to you, then there is no alternative but to take marketing very seriously indeed, and to educate yourself to become very, very good at it. Frankly, the level of marketing expertise I see from most small business owners is embarrassing.

The furthest most of them go is to have some fuzzy notion about the need for more business, and then to leave the rest to chance, hoping, wishing and even praying for punters to walk through the door or hit their website and buy something from them. But hope is a rotten strategy for success.

If you want to enjoy the advantages of a successful marketing system, you need to understand most of what you listen to, believe, and probably think you know about marketing and small business strategy is incorrect. The business world is dominated by marketing myths, and they serve no one but a few phonies.

Strategy idea # 1: Marketing is a money maker

Most small business strategy is curbed by an unscientific "marketing budget". But why? If you're marketing properly, then you should be getting an expected positive ROI from everything you do. So... why would you limit your marketing according to some number a bean counter has pulled out of his butt? Bottom line: when your marketing is making money like this, and it's measurable, trackable and predictable, be ready to plough back as much as you have into it.

Strategy tip # 2: Grab the keys to the Mint!

OK, now let's pretend you have this stupendous marketing system and you know from experience there's a 90 % probability every time you run it you're going to make a handsome profit. A nice place to be, right?

Right. (it's eminently practical for your business, too).

Nope. If you had any sense at all you'd keep pushing that button like a rat with a wire in its head giving it the shots of "happy juice"

Strategy tip # 3: Look before you leap
But, be smart about this. Start with small tests and monitor responses like a hawk watching a mouse. And even when you have a process that works, don't wager more than you can stand losing, because the unpredictable happens, and you don't want to be cleared out by rotten luck falling on bad judgement.

The safe thing to do is determine your evil "budget" as a fraction of profits, so the more you bring in, the more money you can spend on your marketing.

More than once small business owners have said to me they can't do any more marketing this year on the grounds that they don't have the budget for it, even though their marketing is making them a profit. Some years ago, right at the beginning of the 2007 recession, I heard a real estate agent say she was stopping all of her advertising, even though it was the only thing bringing in business. Now THAT is insane..

Strategy tip # 4: How to make it pay

So how do you know when your marketing is working?

When it's making you money.

How do you know that?

By ruthlessly and conscientiously tracking and measuring everything you do.

So the "secret" here is to ensure that your small business strategy is designed in a way to let you track every sale to the marketing activity that brought it in. Right down to every email, postcard and sales call. You can never ever have too much information about this, since it's the difference that'll make you wealthy.

Business Strategy 101: What It Is All About

There are actually a lot of strategies one can engage in with the goal of achieving success in the business world. They are developed to help both the corporate newbies as well as the pros in unlocking the ultimate potential of their businesses. This serves as the main goal that drives the businessperson in strategizing and making it all work.

The thing with strategies is that they are flexible. They cannot be rigid and unchanging in their very nature. The process basically involves constant learning, and with each new concept learned, involves the development of another strategy. All successful strategies have gone through certain adjustments over time because everyone know that if you stay stagnant in business, you will be sure to fail.

Another characteristic of business strategies is how specific they are. There are different businesses out there, and each one comes with a specific set of requirements, assets and limitations. Hence, it is just logical to see some strategies being effective for one yet not for another. The qualities of each industry help determine the level of effectivity, making a strategy more useful in one industry than in another.

To make a business strategy work, a number of elements should be thoroughly studied and evaluated. This includes the consideration of every detail that has an effect on the overall success of the business. Things such as the condition of the global market and its effects on the buyers' mindset play a highly significant role in this process.

Those who are most innocent about the concept of strategizing within the business setting should take time to get to understand what exactly this is all about. In the simplest terms, this strategy is basically all about articulating the main direction of one's business. It involves making use of the resources to their greatest potential, and minimizing as many errors as possible.

Although there is nothing inherently wrong about utilizing the strategies being used by the competitors, this can be a reason for a quick downfall. Just because the said strategy has brought success for another company, it does not necessarily mean it can work for each company within the same industry. In fact, it can backfire big time. This is because there are certain elements in a business that are unique to that business; this causes a specific strategy to be effective.

An effective strategy in any industry incorporates the use of one's potential. It should not, in any way, focus on destroying the competition. Healthy competition brings about a healthy norm within an industry, giving each player ample motivation to be resourceful and creative in coming up with strategies that work.

For a business strategy to work at its best, it should be uniquely created for one's business. It is developed with one business and its unique characteristics in mind. It has taken into consideration the business' strengths and weaknesses, and works to juggle both in the most efficient manner.

Business Strategy - The Five Generic Competitive Strategies

When I was younger... I [didn't] want to be pigeonholed... Basically, now you want to be pigeonedholed. It's your niche. - Joan Chen, actress

A business strategy represents the game plan that your company will use to run its business, gain market share, and conduct operations. This plan of action determines how the company appeal to and satisfy customers, compete effectively, and accomplish managerial objectives. Developing a strategy should mean there is a managerial dedication to follow a specific group of actions that will advance the company's financial market performance and increase its bottom-line.

How will management grow the business while building a loyal customer base and out competing rivals becomes the perspective for both short-term and long-term goals. In order to boost performance and succeed, each functional piece of the business (research and development, supply chain activities, production, sales and marketing, distribution, finance, and human resources) must be unified in operation. Clearly, management's choice of strategy should be guided by the mission statement and the vision of the company. The strategic choice made for the company and by the managers speaks loudly... "Surrounded by the countless unique business approaches and ways of competing we might have selected, we have determined to use this particular mixture of competitive and operating approaches in driving the company in the planned direction, increasing its market position and competitiveness, and advancing execution." Hardly ever are these conclusions regarding strategy uncomplicated and painless for any company, and some of the conclusions may turn out to be mistaken - but that is not a justification for not making a decision on a specific path of action.

When developing a business strategy, your company's present situation must be considered. Managers should be driven to evaluate the business environment for the particular industry and the competitive forces, the company's recent performance and market status, its strong points and abilities, and its competitive weak points. Depending on the needs and the vision of the company, managers are forced to set a clear path for direction. By no means it this path absolute. Setting foot on this path of action requires the company strategy to evolve over time with both proactive and reactive activity. Developing the company strategy is in a cinch intended to guide the company in the planned direction while growing the business, and improving financial and market performance. Thus perfecting the company's vision and empowering the company's mission statement.

This article describes the five basic competitive strategy options - which of the five to make use of is an important and fundamental choice for any company. In developing this overall strategy, your company is beginning its pursuit for a competitive advantage. The main differences among competitive strategies comes down to (1) whether your company sets aim on a market target that is broad or narrow, and (2) whether your company is pursuing a competitive advantage linked to low-cost or product differentiation.

The five distinct competitive strategy approaches that stand out are below:

The Five Generic Competitive Strategies

1. A low-cost provider strategy - striving to achieve lower overall costs than rivals and appealing to a broad spectrum of customers, usually by under pricing rivals.

2. A broad differentiation strategy - seeking to differentiate the company's product offering from rivals' in ways that will appeal to a broad spectrum of buyers.

3. A best-cost provider strategy - giving customers more value for their money by incorporating good-to-excellent product attributes at a lower cost than rivals; the target is to have the lowest (best) costs and prices compared to rivals offering products with comparable attributes.

4. A focused (or market niche) strategy based on low costs - concentrating on a narrow buyer segment and out competing rivals by having lower costs than rivals and thus being able to serve niche members at a lower price.

5. A focused (or market niche) strategy based on differentiation - concentrating on a narrow buyer segment and out competing rivals by offering niche members customized attributes that meet their tastes and requirements better than rivals' products.

Each of these five generic competitive approaches stakes out a different market position. The decision on which generic strategy to employ is conceivably the most vital strategic commitment for your company. This commitment will drive the rest of the strategic actions that your company agrees to and it sets the entire tone for your quest of a competitive advantage over competitors while "Creating Your Own Lane" in business success.