External Corporate Strategy Fundamentals: Part 1
Updated: May 2, 2023
The best way to become a billionaire, is to help a billion people. – Peter Diamandis
Developing an external corporate strategy can be an intuitive aspect of business planning.
However, more often than not, businesses don’t approach business planning correctly, which leaves them vulnerable. They find themselves jumping from idea to idea with no clear vision intact.
This article is the first in a series we will be producing walking businesses through the different aspects of building a business strategy. Starting with an External Corporate Strategy.
Your External strategy relates to where you want to take your business and the goals you are working to achieve.
Executive teams often develop a clear picture of their external corporate strategy with the help of critical employees, stakeholders, and some outside consulting.
External corporate strategies should answer questions like:
1. In which markets will our company operate? How much of the market are we looking to own? 2. How will we position our business in the competitive landscape, relative to the competition? 3. Which products and services are going to help us maximize our share within the marketplace? And how do the products/services need to function and be presented to align with our positioning strategy?
The answers to these questions will typically rise to the surface after some consideration and probing, with the right people involved.
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EXTERNAL CORPORATE STRATEGY FUNDAMENTALS: CHOOSING THE MARKET
Establishing a market strategy within the context of an overall business strategy is essential. It will determine the competition and will affect the internal strategy that will be addressed in a later article.
Some businesses are looking to gain more control over a local market or expand their business to new geographical regions.
An expanding market strategy is usually the most basic form of growth, as it focuses energy and resources on developing existing product lines and services.
Other companies reach glass ceilings in their respective market and look to expand in different ways.
For instance, Google had all but cornered the search engine market dominating roughly 90% of the search marketplace.
As you see their business expand into different markets such as the cell phone industry, computer hardware, social media, and too many others to include in this article (you can view a full list here).
This external corporate strategy is inherently more difficult as it requires many other pieces of the business development process to be in place to be successful.
EXTERNAL CORPORATE STRATEGY FUNDAMENTALS: TAKE A POSITION
Positioning is another core component of a business’s external strategy. To achieve market success, your strategic position must be aligned correctly to drive new customers and create value in the minds of existing customers.
A company like Apple has done a great job of positioning itself over the years as a result of Steve Jobs's thinking.
The idea was to create a brand that lives by the philosophy of “Think Differently” and building entire ecosystems for computers to operate in was the cornerstone of their positioning strategy.
Companies like Tesla have taken a position of pushing the frontier of performance in clean energy vehicles, to appeal to consumers that want the benefits of sophistication and power with eco-friendly design.
Forcing competitors to take a similar stance and invest in the new technology.
EXTERNAL CORPORATE STRATEGY FUNDAMENTALS: DEVELOPING PRODUCTS & SERVICES
Product design impacts positioning and market potential. Peter Diamandis, Founder of The X-Prize famously stated: “The best way to become a billionaire, is to help a billion people.”
To align with this from a product standpoint, it is imperative for anyone wishing to achieve this goal to develop a product and or service that can be utilized by a billion people.
Addressing concerns such as cost, quality, and usability are going to be significant factors for such lofty goals.
Although not every business focuses on creating a company of this scale.
However, the premise remains the same. Does your product design, manufacturing, and distribution model support the goals you are working to achieve in your external corporate strategy?
Whether it is making your first 100k, 100M, or 100B.
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