strategyvstacticsMany people hoping to own their own company or launch a start-up often stumble onto the concept of strategy vs tactics. These two terms are not interchangeable, but instead represent two different concepts in running and managing any commercial venture from a single website to a multinational firm. In an every changing competitive marketplace, it is the combination of strategy and tactics that set companies apart.

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Today we’ll review some of the more basic strategies used in successful business operations and examine a few of their tactics to better understand how the two ideas work together.

Basically stated, strategy is the overall blue print for how you intend to conduct business. The tactics are the actions you take to successfully accomplish your goals. Very often you will find that your strategy is long term, while the tactics you employ affect your day to day operations.

For example, let’s say your strategy is to open an auto repair shop that is profitable enough to allow you to open a second location. You decide the tactic you will use to accomplish this goal is to offer a customer loyalty program that rewards return customers.

Very often your business strategy will not change significantly over time. However, you can constantly be developing and deploying new tactics to get visitors to your website or customers through your door. Tactics that do not work can easily be dropped.

Less Is More

One of the most basic business strategies many people think of is the idea of selling for less, especially in the retail industry. You probably are most familiar with this concept because it’s widely used and heavily promoted. Plus, chances are many times your friends have bragged about getting a great deal on a product.

One of the best know examples of this kind of business is WalMart. The founder, Sam Walton, developed the strategy and used several different tactics to make it happen. One tactic he used was to only open stores in smaller towns so that he would be the dominate, lowest priced retailer in the entire area.

Some software providers use a variation of this strategy by giving away their most basic products for free. If you want more bells and whistles and extended tech support you have to upgrade from the basic service and start paying.

You can learn how to make an effective strategy part of your own business plan by taking one of our courses on drafting your own business plan.

The Customer Is Always Right

While some companies try to price their goods or services as low as possible, others focus instead of providing high quality service. There are a good many people who don’t mind spending more for products or services if they know they will be get the best in customer service.

One example is the high end retailer Neiman Marcus. Company executives have no desire to undersell WalMart. Instead they focus on more stocking more exclusive brand named items in combination with higher quality customer service.

One tactic they use to keep customers returning is to offer a very different shopping experience. They do not have the warehouse kind of environment found at Wal-Mart and instead use more traditional retail decor. Many customers feel like although they do pay more at the retailer, they also get more in return.

A Very Narrow Focus

Thanks to the internet, your business or company has the potential to reach customers around the world. This kind of global market lets you focus on selling or proving goods to a small number of loyal customers using a niche marketing strategy. You can also use developing technology to reach new customers for very little money by allowing loyal customers or fans to help spread the word about your business.

Perhaps one of the best examples of this kind of strategy is the power sellers on eBay. These small business owners focus on selling a few select products to a small market. For example, one very successful small business owner in the U.S. sells vintage cameras to photography buffs in the Southeast Asia market. One effective tactic is to use point per click advertising to look for customers already searching for the cameras.

If reaching a niche market is your plan, you may want to focus on the relatively cheap and effective tactic of using social media to let your customers/fans help spread the word. You can find out more details in a class about using social media for startups.

Tried and True

If you are looking for a turnkey solution to the whole strategy vs tactics concept then the idea of a business franchise may be the solution. Franchises first caught the public’s attention in a big way because of McDonald’s. The strategy behind the concept is pretty straightforward: you buy a franchise and all the business decisions regarding strategy and tactics has been figured out, tested and is all ready to go.

Basically, McDonald’s strategy is to sell the same exact food at every location. One tactic the fast food chain employs to guarantee this will happen is that it closely regulates its suppliers to make sure they provide the exact same product all the time. The company also employs super food tasters who constantly check on the quality of the products at every franchise location. It is safe to say that if you’ve eaten at one McDonald’s, you eaten at them all.

Where No Business Has Gone Before

Disruptive innovation is a relative new kind of business strategy that is used by many new technology startups. It was coined by Clayton M. Christensen in his book The Inventor’s Dilemma. One example you may be very familiar with is the introduction of the iPod by Apple.

It was an innovation that disrupted the more traditional business model of selling music CDs and it created an entirely new market for music. One of the sales tactics the company used was to tell potential customers that thousands of songs could easily be downloaded onto the device.

Like companies that focus on customer service, disruptive innovation companies tend to target the unfulfilled wants and needs of customers. More established business are at a disadvantage in competing with this kind of strategy because it often requires quickly developing new products or services. It may be safe to say that more new technology startups are launched than any other kind of business model.

To see if it’s the right choice for you see our class on what it takes to start a new high tech company.

Hopefully, now that you have seen examples of the difference of strategy vs tactics you can deconstruct other successful business models to learn from them too. No matter what kind of business you may be working with, chances are you can find a strategy and a long list of tactics that will match your goals.

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