Almost without fail, when I ask business owners to explain their business strategy to me, what I hear is their company’s marketing strategy. I am, of course, all ears to their marketing strategy and I certainly understand why any business man might leap to a discussion of marketing strategy when asked such a question, as it is often through a company’s marketing strategy that companies seek to differentiate themselves from their competition and rise above. However, business strategy is more foundational to the company than market strategy and it is an important difference for owners and advisors alike to grasp. In short, marketing strategy supports the company’s underlying business strategy, but business strategy should be what guides the company’s growth and decision making; not marketing strategy.
To highlight the difference, consider GE’s decision to move into China. When GE made the decision to start investing in China, the decision is a reflection of its underlying support for their business strategy. In Jack Welch’s words, “If GE’s strategy of investment in China is wrong, it represents a loss of a billion dollars, perhaps a couple of billion dollars… If it is right, it is the future of this company for the next century.” …and that is the type of directional guidance a company establishes for itself with its business strategy.
The end means and ability by which GE is able to market their product and services in China certainly could weigh on their decision, but is in not at the core of their decision to go to China. Recognizing that the company’s future and focus for the next one hundred years may lie in China… is. Marketing strategy, once determined, may change dozens of times over the years to adapt to changes in the market environment, but all marketing strategies will still be focused to drive and support the ambitions of GE to penetrate China’s markets and secure their future.
The simplest way to help ensure a separation of the two strategies in your mind is to draw up a business plan that will have the company’s marketing strategy clearly laid out within; highly visible as a mere component of the overall plan. 100% of successful businesses have a comprehensive business plan that is updated annually. Unfortunately, approximately only 30% of small business owners ever write a business plan… and those that do generally forget about them within just one year.
Identify your company’s strategic objectives, assess the business environment, identify threats and opportunities and compare your strategic alternatives. Then take the time to sit and write your business plan. Let it serve as a tool and reference for repeated analysis and adjustment to keep your decision-making grounded and your business on a successful path.