Company Development Strategy: Types and Rules of Creation

Why is it needed? The company's development strategy defines the business goals for the short term and in the long term, as well as the ways to achieve these goals. It is created on the basis of an analysis of the organization and the area where it operates.

Which one could it be? There are three development strategies: basic, competitive and functional. They also use additional strategies: conservation, detection, leadership.

Objectives of the company's development strategy
The strategy helps the company to focus on the set goals and clearly understand the direction in which the company is moving. With its help, the management and employees of the organization can make the right decisions. In addition, the strategy provides an opportunity to assess the results of the work done and determine how many steps still need to be completed.

Another important task is to bring new employees up to speed.

A company's development strategy is always necessary. Let's take a look at the specific situations in which it will be useful:

New business. When opening a new enterprise, the management wants to see an action plan, a budget and investment forecast in front of them. However, by the time the strategy is drawn up, the company should already have gained some experience in its field of activity. This is necessary in order to give at least an approximate description of the target audience and some important nuances.
Focus on development. An organization that has a good position in the market, but is going to make a qualitatively new leap, will also need a strategy.
Release/promotion of a new product. If the company feels good in the market and is going to release or promote a new product, then you will need to draw up a strategy.
Entering the foreign market.
Adapting to changes in the market.
If a company doesn't have a strategy, it will be quite difficult to explain why the consumer needs the company's products. Without a clear action plan, it becomes much more difficult to expand the target audience and the market of influence. The strategy is also needed to explain to potential partners what the company's goals are and how it will achieve them. In addition, without it, it will be difficult to achieve audience loyalty.

Types of company development strategies
Within the framework of modern management methodology, there are several main types of the company's development strategy:

Basic. Due to its large scale, this type of strategy is called the most complex. We are talking about planning a generalized direction for the development of the enterprise. It applies to all activities of the organization and includes a product strategy, as well as a set of solutions in various areas.
Competitive. Helps the company create competitive advantages. In the process of its development, it is necessary to form approaches for activities in each area. A competitive strategy should complement the basic one.
Functional. It is necessary for each of the divisions of the company. All functional areas should have a clear action plan. The goal is to allocate the resources of the units and coordinate their activities in accordance with the overall strategy of the organization. In addition, functional planning may contain an R&D strategy, which is necessary to summarize information about new products.
It should be kept in mind that all these types of strategy do not replace each other. They should be used in combination.

Let's highlight several forms of strategies that are suitable for niche companies:

Conservation strategy. It is useful if the company needs to maintain its current position. When implementing it, the company does not aim to expand its work. The disadvantage of this type is that the company may lose a competitive advantage.
A strategy for detecting the "invader". It can be used in a situation where the company has faced serious problems and can no longer operate offline. The company wants to find another company that can absorb it. Subsequently, the organization can continue its work, but as a unit that has relative independence.
Niche Leadership Strategy. It is used if the company: is dynamically developing and plans to monopolize the niche; has the financial resources that will be required for the accelerated growth of the enterprise.
A strategy for going beyond the boundaries of the niche. This option only applies if the company operates in a narrow niche. When expanding, the enterprise will face new competitors, so it is necessary to have a certain budget to create a competitive advantage.
Each of the above strategies is effective in its own way. But it should be borne in mind that the expediency of using this or that method depends on the characteristics of a particular organization.

Stages of development of the company's development strategy
Definition of goals and objectives
It is necessary to formulate the main goal that the company faces:

to take a leading position in the market, to increase the volume of sales of goods by 2 times in 3 years;
open 10 branches in other cities in 5 years;
market and sell 1,000 units of a new product in 1 year;
Expand the product matrix by 10 positions and open a hypermarket in 2 years.

After that, it is necessary to formulate global objectives for each set goal. For example, in order to take a leading position in the market, a company will need:

increase storage capacity;
modernize production;
expand the sales department;
find new promotion formats;
negotiate deliveries with large chains.

There are no goals and objectives that will work for all companies. Every organization must take into account the specifics of its business and many other factors. Once the directions of development have been determined, it is necessary to develop tactics. It will be necessary to organize operational activities in such a way as to achieve the set goals within the established time frame. At the same time, the deadlines themselves should be realistic.

Explore the environment at the macro level
Business develops under the influence of many external factors. The general state of the economy, the peculiarities of the development of the niche, the positions of major players - all this has an impact on the company. By studying the macro environment, an organization can predict profitability and understand whether it is necessary to open new directions.

When developing a company's development strategy, it is necessary to take into account several important factors:

Bills that may have an impact on the niche. 
Changes in the level of incomes of the population.
For example, if the management of a small local taxi fleet suddenly finds out that a large taxi aggregator is going to take over the economy segment in the regions, then the issue of re-profiling should be raised. If the company is able to move to another segment (for example, to the premium class), then this can save the day.

Microenvironment Analysis
How do competitors develop? What are the customers' needs? The answers to these questions directly affect the pricing policy and promotion activity of the organization.

In the analysis, you can use:

Marketing research of the market. This information is essential in order to understand where the industry is headed. Market research also helps to identify the main needs of the audience.
Information about other market players. It will not be superfluous to find out in which direction other companies are developing. What segments are they trying to capture? What products or services are they announcing?
Let's take a look at an example of a company's development strategy. Let's assume that a coffee shop has a competitor who decided to develop outlets in office centers. Having assessed the volume of the market, the company can either enter the fight, or, on the contrary, focus on "coffee to go" points.

SWOT Analysis
If an organization has a clear understanding of what external factors have a significant impact on it and what competitors plan to do, then it needs to analyze its strengths and weaknesses. The information obtained should be compared with the data obtained at the previous stages of developing the company's development strategy.

A SWOT analysis will help with this. It is an effective planning tool that allows you to combine all the information about the business and define long-term goals.

You need to make a table consisting of four columns:

strengths – advantages over competitors;
weaknesses – weaknesses of the business;
opportunities – external factors that have a positive impact on the business and open up opportunities for achieving certain goals;
Threats – external threats and factors that negatively affect the business.
The information obtained needs to be systematized.

Ansoff Matrix
In the process of developing a company's development strategy, you can use the Ansoff matrix. This is a traditional marketing method that involves choosing one of the following options:

An old commodity and an old market. The essence of this direction is to increase the volume of sales in the current market and increase the number of sales. For example, the company sells 250 kg of flour per month and aims to sell 700 kg.
An old product and a new market. The company enters a new target audience, opens branches in other cities or countries. For example, it begins to sell 200 kg of flour per month in neighboring regions.
A new product and an old market. In this case, the company focuses on product development. For example, it begins to sell flour made using innovative technologies that are not yet known to consumers.
A new product and a new market. It's about diversification.

There are several forms of diversification:

New with the resources that the company already has. For example, a coffee shop opens a "coffee to go" outlet. At the same time, the company operates in the same premises and continues to brew drinks from grain from existing suppliers.
Expansion of the product matrix. For example, the company begins to sell not only coffee, but also tea.
The organization must choose the optimal direction of development. A SWOT analysis will help with this.

As a result, the company will develop a flexible development strategy that can be edited if the external environment or the state of the enterprise changes.

Mistakes in the company's development strategy
Mistakes may be made in the process of developing and implementing the company's development strategy. Moreover, enterprises often face problems after the launch and obtaining intermediate results. Let's take a look at the most common mistakes:

Spontaneity. The company incorrectly assesses the current situation and conducts an overly superficial analysis of the work of its divisions. Therefore, it is necessary to systematically develop the implementation of changes, even in the case of strategic crisis planning.
Lack of competitive analysis. If a company collects too little information about its key competitors, the effectiveness of the strategy will be lower. The management of the organization will not understand what its advantages and disadvantages are over other players in the market.
Neglect of risk assessment. This mistake can adversely affect the implementation of the strategy if the internal or external business environment changes dramatically. The occurrence of an emergency can lead to a slowdown in business processes or a decrease in critical indicators.
Low motivation of employees. This leads to a decrease in the speed of implementation of the company's strategy. Employees are not personally involved in the development process of the organization. To eliminate the problem, it is necessary to introduce motivation systems. In addition, it is possible to set personal KPIs that affect the salary of the staff.
Long reporting periods. Many companies that launch a basic development strategy begin to maintain initial reports after a long period of time. As a result, the company may not notice the mistakes made and do not have time to correct them. Even if we are talking about long-term strategic planning for several years ahead, it is necessary to analyze the results in 6-12 months from the launch of marketing tools.
Most often, companies make mistakes in the process of planning and analyzing the current situation. If the initial basis is formed incorrectly, then the wrong techniques and tools will be superimposed on it.

An enterprise must carefully consider internal factors, the company's position in the market and trends in the competitive environment. This will make it possible to reduce the error of planned indicators and develop the right strategy for the company's development.