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How To Develop a Competitive Business Strategy for Your Business

Victor Ifegwu Mbonu
Competitive Business Strategy

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  Doing business today is becoming more competitive than it was a few decades and a century ago. Businesses that must stand out from the pack are those who understand this and can develop a competitive business strategy. A competitive business strategy helps differentiate businesses from competitors, meet customer needs, and achieve sustainable growth.
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If you’re a Nigerian entrepreneur and desire to make your business compete in this age you should read this piece. It provides a comprehensive guide on a competitive business strategy tailored to the Nigerian market, ensuring your business survives and thrives. Focusing on understanding market dynamics, leveraging unique strengths, and continuously adapting to changing conditions can position your business ahead of its competitors. This article walks you through the essential steps and considerations to develop a winning strategy for your business.

What Competitive Business Strategy Is

A competitive business strategy involves making deliberate choices about how your company positions itself in the marketplace relative to its competitors. It includes decisions about product offerings, pricing, marketing, and operational efficiencies. The goal is to create a unique value proposition that attracts and retains customers while ensuring profitability.

Steps To Creating a Competitive Business Strategy

Conduct a Market Analysis
The first step in developing a competitive business strategy is conducting a thorough market analysis. This involves understanding the current market conditions, identifying key competitors, and analyzing customer preferences. In Nigeria, market conditions can vary significantly across different regions and industries, so it’s essential to gather relevant data to make informed decisions. In conducting market analysis, you are looking to do the following: Who are your potential customers? What are their demographics, preferences, and buying behaviours? For instance, if you’re selling tech gadgets, your target audience might be young professionals and students who are tech-savvy and price-conscious. Determine who your main competitors are and what strategies they are using. This can include direct competitors offering similar products or services and indirect competitors who provide alternative solutions to the same problem. Understand who your competitors are, what products or services they offer, and their strengths and weaknesses. Look at what your competitors are doing well and where they may be falling short. Visit their stores, study their marketing strategies, and read customer reviews. This helps you identify gaps in the market and areas where you can differentiate your business. Knowing who your customers are is critical. This includes demographics, purchasing behaviours, and preferences. Many methods can help you understand your customer needs. You can conduct surveys, focus groups, or interviews to gather insights into what your customers value most. Understanding their pain points and preferences will help you tailor your offerings to meet their needs better. Study economic indicators such as inflation rates, exchange rates, and government policies. These factors can significantly affect your business. For example, high inflation might increase your costs, so you need strategies to maintain your profit margins without alienating customers.
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Leveraging Unique Strengths

Every business has unique strengths that can provide a competitive edge.  These can be in the form of unique products, superior technology, strong brand reputation, or exceptional customer service. Identifying and leveraging these strengths can help a business stand out in the competitive Nigerian market. To identify and leverage these strengths effectively, you need to:
  1. Conduct a SWOT Analysis:
Strengths: What does your business do well? This could be your product quality, customer service, or unique technology. For example, if you run a restaurant known for its unique dishes and excellent service, these are strengths you should highlight and build upon.  Weaknesses: Be honest about areas where your business can improve. It might be customer service, product variety, or online presence. Knowing your weaknesses helps you address them proactively. Opportunities: Identify external opportunities in the market, such as a growing trend or a new customer segment. For instance, the rise in online shopping presents an opportunity to expand your e-commerce capabilities.  Threats: Recognize external threats like new competitors, changing regulations, or economic downturns. Understanding these threats allows you to develop strategies to mitigate them.
  1. Define Your Unique Selling Proposition (USP):
What sets your business apart from the competition? Your USP should be clear and compelling. For instance, if you offer a product that’s made from locally sourced materials and promotes sustainability, emphasize this in your marketing.

Strategic Planning

Once you have a deep understanding of the market and your business’s unique strengths, the next step is strategic planning. This involves setting clear goals, developing action plans, and allocating resources effectively to achieve these goals Use the SMART criteria to set Specific, Measurable, Achievable, Relevant, and Time-bound goals. For example, if your goal is to increase sales, specify by how much and by when. “Increase sales by 20% in the next six months” is a clear, measurable goal. Balance between long-term strategic goals and short-term tactical goals. Long-term goals provide a vision for the future, while short-term goals focus on immediate actions and results. When you have set goals for your business, break down your goals into actionable steps. For instance, if you want to increase sales, your action plan might include launching a new marketing campaign, expanding your product line, and improving your online store. Ensure you have the necessary resources (time, money, manpower) to implement your action plans. This might involve hiring new staff, investing in marketing, or purchasing new equipment.

Continuously Improve Your Strategies

The business environment is constantly changing, so your strategy should be flexible and adaptable. You need to continuously adapt and improve to stay ahead. This involves regularly reviewing and updating your business strategy based on market feedback, performance metrics, and emerging trends. Regularly collect feedback from your customers to understand their needs and preferences. Use surveys, online reviews, and direct interactions to gather this information. For instance, if customers are consistently asking for faster delivery times, consider ways to improve your logistics. Track KPIs such as sales figures, customer satisfaction, and market share to assess the effectiveness of your strategy. Regularly review these metrics and adjust your strategy as needed. For example, if sales are not meeting targets, analyze the reasons and take corrective actions. Keep an eye on industry trends and technological advancements. Attend industry conferences, follow thought leaders in your industry, read relevant publications, and network with other professionals. For example, if there’s a new technology that can improve your production efficiency, consider adopting it.

Make Technology Your Ally

Technology can significantly enhance your competitive edge in so many ways. It can help you streamline your operations, improve customer experiences, and provide valuable data insights. So, ensure you make technology your ally. Leverage digital tools and platforms such as social media and email marketing to reach a broader audience. For instance, use targeted ads on social media to generate leads by targeting potential customers based on their interests and behaviours. When you’ve gathered their data, use email marketing to nurture them into paying customers. Depending on your business, you can also establish an online presence through an e-commerce platform, especially if your business is product-based. This can expand your market reach and provide customers with a convenient way to purchase your products or services. However, you must ensure your website is user-friendly and optimized for mobile devices. Don’t forget to gather and analyze business data. This can provide insights into customer behaviour, market trends, and business performance. There are so many data analytics tools you can use such as Google Analytics which helps you to track website traffic.

Build a Strong Team

A successful business strategy requires a capable and motivated team. Building a strong team involves hiring the right talent, providing ongoing training and development, and fostering a positive work culture. Recruit individuals with the skills and experience necessary to execute your business strategy. Consider cultural fit and alignment with your business values when making hiring decisions.
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When you’ve recruited, design ongoing training and development opportunities to help your team stay updated with the latest industry trends and enhance their skills. Create a work environment that encourages collaboration, innovation, and continuous improvement. Recognize and reward team members’ contributions to keep them motivated. A positive work culture can improve employee retention and productivity.

Concluding Thoughts

Developing a competitive business strategy in Nigeria involves several strategies that have been highlighted in this post. The list here isn’t exhaustive but by following these practical steps and staying adaptable to changing market conditions, you can position your business ahead of its competitors and achieve long-term success.
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