There are several reasons why businesses fail. Some fail due to bad management and weak leadership, while some others have failed because of market changes and unfortunate circumstances. However, it is also true that some businesses have failed, simply because they lacked a strategy. In our experience we come across 3 common pitfalls for businesses operating without a strategy.
1. Derailing from the Original Purpose
Perhaps one of the most common pitfalls, is when businesses derail from their original purpose. What seems an attractive opportunity may come up, creating a distraction. This distraction may waste resources on useless projects thus harming the business with extra costs or failure to deliver on current projects and established targets.
Thus, having a business strategy increases the possibility that a business keeps focused and therefore able to take a conscious decision to say yes to some opportunities and to say no to others.
2. Reverting to previous approaches
Another common pitfall is to revert to proven, however outdated, methods and approaches. Reverting to old methods may instinctively appear appealing at times when quick fixes are required, and such quick actioning may prove effective. However, when faced with further new challenges there is a risk that businesses stall. Thus, they fail to adapt and make the required changes for their business to change, move forward and grow.
The point here is that having a business strategy, helps to be better prepared for unexpected challenges and extraordinary situations.
3. Just Copying the Competition
A third common pitfall is when businesses copy and do what their competitors are doing. The biggest risk with such an approach is that the business risks losing its identity, especially with customers. To clarify, collecting information about your competitors is important because it helps business owners to develop their own unique product or approach to market and to focus on their target customers. However, just copying competitors will produce the exact opposite result and the business will not be able to distinguish itself in the market.
… in summary…
Having a business strategy is not a fool proof guarantee against failure. However, it may allow for better awareness of an arising situation, subsequent decision making and actions.