Internet company strategy - step by step
Regardless of whether the strategy of a traditional company or an electronic business is at stake, the basic principles of its creation will be the same, or at least very similar. The owner or management board of each enterprise should know in which direction the company is heading, what profits it wants to achieve and how it should develop in the coming years. Of course, the Internet has its own specifics (see previous parts of our cycle), but the basic issues for determining the right business strategy will be the same.
What is the company's strategy?
The company's strategy is nothing more than an action plan (P. Kolter describes it as a game plan) for the company, created in order to achieve the company's business goals.
What goals can a commercial organization have?
Most often, the overriding goal of a private business venture is to earn money, which is difficult to argue with, because without income, no company will stay in the market for long. However, apart from the most important financial indicators (e.g. net profit, rate of return, sales level, etc.), the company may set up other goals, which include, among others, achieving a specific market share, image building, brand awareness level, brand recognition.
Is the company's strategy needed?
The company's strategy is very important. For example, let's say you want to go on vacation to Spain. Your goal is to rest in this southern country. However, if you want to get there relatively quickly and safely, don't you make an action plan in advance? You are probably wondering if you will drive your own car, where will you be staying, in which part of the country, in a hotel or private villa, for how long? Or maybe it's better to do it through a travel agency? How much will this escapade cost? How to prepare for a trip or take a lot of cash with you?
If you want to spend a quiet vacation, you will definitely plan your trip. Why should a company with specific goals be any different? Otherwise, it is much easier to find stumbles, obstacles, and even the possibility of not reaching the end goal on the way to success.
A properly selected company strategy reduces the risk of business and increases the chances of its success.
Internet company strategy - how to create it?
How to create a strategy for running and developing an electronic business? It is best to do it step by step, breaking down the conducted or planned activity into prime factors.
Product or service
If you want to run your business, you certainly know what product or service you will be selling. The company's strategy must define what it is, but besides, it is worth checking whether such a product is already on the market (usually it is), how does it differ from what is already available, what is it better at than the competition? What benefits will the customer gain by choosing your product and not another?
The target group, i.e. the customer
The company's strategy must also include the issue of the target group. Since you know your product, you probably also have some idea of who you want to sell it to. However, your belief may be wrong or simply inaccurate. Therefore, it is worth determining precisely who can actually become a client of your company. For this purpose, you can design surveys, thanks to which you will get more data. On the other hand, you will find a lot of different statistics, studies and reports on various topics on the web that will help determine how large your target group of potential customers is.
For example, if the client of your company is to be micro companies, sole proprietorships, then such information can be found on the web. If you address your offer to mothers with a child of a certain age, thanks to the CSO reports, you will find out how many such people exist in Poland, broken down by voivodship. If you sell an accounting software, you will also obtain information from the network about how many accounting offices are operating on the Polish market.
Currently, a lot of interesting, but important data for your business, can be obtained from the Internet. They are often research and reports from reputable companies. Just think about what information you need and search available sources.
In determining the target group, you will be helped by the criteria known for years, due to which the potential customers of the enterprise are determined. These include as hard and direct as geographic and demographic criteria, but also criteria that describe the recipient's behavior and behavior to a much greater extent, i.e. psychographic and behavioral. For more information on this subject, please refer to the next parts of our series on running e-business.
When considering distribution methods, it is important to answer the question of how you will sell your product. Will it be one or many complementary sales channels? Will the sale be made only via the Internet or also via offline activities? In practice, there may be sets of different types of sales.
Online sales can be conducted using various methods:
company website - leads are obtained through the company's website containing the company's offer,
landing page - a specially prepared website whose main purpose is to sell a specific type of product or service,
online store - a website of an online store that may contain hundreds of different types of products,
auction services - the best Polish example is Allegro, from outside our country - eBay,
price comparison websites - although here you can wonder to what extent they are used for sale and to what extent for the promotion of a given brand, especially an online store,
e-mailing - sale by more or less mass mailing of e-mail messages. It is worth noting that the content of the e-mail is most often directed to an external website of the landing page type, containing the full offer and giving the possibility of ordering the goods.
As part of these sales channels, various information is provided to customers in order to increase sales efficiency. These include, among others:
all types of promotions, e.g. discount coupons very popular in the network,
recommendations / opinions of other clients,
up-selling - encouraging the recipient to buy a better product (more expensive, more comprehensive, better quality, etc.) than originally selected for purchase,
cross-selling - offering a complementary product, in some way related to the one purchased by the customer, e.g. in the event that someone once bought fins, it is worth offering him a diving mask.
When planning the distribution of goods or services sold in this way, one should also predict the method of their delivery to the customer, delivery time, the number of people - employees who would perform it and all other activities related to the implementation of the order made by the consumer.
Determining a pricing strategy is an underestimated area of strategic planning by many e-commerce entrepreneurs. Very often, online stores conduct a price war with each other, which consists in acquiring customers through the lowest price level. Such a strategy also has its raison d'être. Perhaps it is worthwhile to "break into" the market in the first phase of the e-shop's operation through the lowest prices of its products. However, in the long run, such action becomes unprofitable. Especially if the company is not large and it is not possible to negotiate low prices with suppliers and obtain high discounts thanks to large quantity or amount orders. Therefore, it is worth envisaging other solutions consisting in high-quality service, individual customer treatment and flexible solutions dedicated to individual consumers.
Anyway, the price of our products should include the costs of production or purchase from a wholesaler, marketing, sales and distribution costs. When setting the prices of individual items of our assortment, we must also be guided by how much (or how little) these products cost to our competitors. It is also worth checking, on the basis of the collected data about the target group of customers, whether the purchase of our goods lies within their financial capacity. Having all these data, we can calculate our profit, or the time when we start earning. On this basis, we can only predict and estimate the return on investment incurred on our business.
Promotion, i.e. methods of reaching customers
Finally, one should choose the most effective methods of promoting the offered products or services for the business we run. Due to the online nature of the company, it is about methods of reaching customers via the Internet. Along with the development of the Internet, the potential methods of reaching the recipient have evolved, and sometimes even revolutionized. The most popular ones are listed below:
Website optimization (SEO),
Positioning the website in the Google search engine,
AdWords sponsored link campaigns,
Other contextual advertising campaigns (e.g. Adkontekst),
Content marketing campaigns (content distribution on external portals),
It should be noted that the above classification has a more practical dimension than one consistent with the theoretical division or assignment to selected categories. Very often, as part of the activity referred to as website positioning, website optimization is performed. Whisper marketing on internet forums is also often used to obtain links, i.e. an activity that falls under the positioning of websites. Content marketing and PR campaigns have many points of contact. Channels such as social media, e-mailing or word of mouth marketing can be used to spread viral marketing. A company blog is, in fact, an element of content marketing.
We should analyze the competition at the initial stage of strategic planning, because of the data, which in turn will be useful for us to determine our product, pricing, distribution and marketing methods of reaching the customer. First of all, find out who our competitors are, and then obtain all quantitative data on the market share, sales level, revenues, marketing strategy, products and customers offered.
Company strategy - summary
In this way, the company's strategy established point by point allows for a clear insight into the situation and a rational approach to the business. Still many companies, both small and large, use the strategy called "Somehow it will be". Some are successful, others close their businesses sooner or later. Question - can you afford to risk and develop your business in the dark? Will you make it? Maybe yes or maybe not. However, you already know how you can reduce the risk of failure and increase the chances of success. All it takes is a little planning ...