Why a solid strategy planning is crucial for so many modern businesses?
Many businesses are struggling to adapt to to the current digital economy. But it shouldn’t be that way. Here we will explain why you should implement and revise your strategic plan.
I like to think of the Internet as an immense and endless motorway (bear with me), with multiple exits (links) off to different towns, shopping and entertainment venues, that you or your client can access without leaving the comfort of their own home. And lets face it, far more appealing than being stuck in a traffic jam (if you’ve ever been on the M25 you’ll know exactly what I mean).
“Image courtesy of Photokanok / FreeDigitalPhotos.net”
Business strategy or model, the chicken and egg question..
A digital strategy must come from the business model itself and not the other way around.
In this next section I will sum up how EasyJet have survived and become one amongst the top leading low budget airlines. Branding themselves as Europe’s “efficient low-cost airline” and how this practice has been key in their business success .
EasyJet Business Strategy Key Point
In December 1997, Stelios was facing the following dilemma: Should Easyjet invest and create a website for direct bookings or continue to take calls? – This was suggested by their advertising agency. At the time, Haji-Ioannou’s reply was –“The Internet is for nerds, it will never make money for my business” Later on, the marketing department got the approval and went for the digital trial period. The idea was to use Internet as the main booking platform, where flights were priced cheaper than booking over the traditional phone system. In parallel they start promoting it through online platform advertising.
The digital strategy really paid off as within the first year they made over 50% of bookings via their website alone. Six years later, the online bookings reached 98%. Not bad at all. So, the question here is: should we experiment new tactics and embrace the digital era? Well, you only have to see for yourself.
EasyJet also made a great number of strategic decisions in it’s business model including: flying directly to main airports, low ticket prices, smaller Airbus aircrafts, quick turnaround times, no class system seating on the planes, speedy boarding. But have a closer look at the results:
- Main airports throughout Europe = Low airport fees
- Created first Internet booking system April 1998 = Fast sales
- Enhanced digital services = Via Facebook and Twitter
- Low ticket prices strategy = Increase volume of clients
- No travel agents = No middle man costs
- Standard class seating on every flight = All passengers are equal
- Speed boarding = Priority seat access (fee)
- No free meals or drinks = Revenue opportunity
This example shows you how you can learn, adapt and contribute to this fast paced e-economy at low cost. They had to move quick as a result of the deregulation of the aviation industry reforms in Europe in 1997.
Important note: We are not talking or focusing on EasyJet’s 2012 customer service criticism. If you want to read more.
Can your business switch to digital and follow this example?
The gradual change from the traditional business model concept has led to continued success for businesses large and small. This could be the difference between your business making it or failing during these austere financial times.
Ask yourself these eight quick questions:
- Can you answer in less than ten seconds exactly what your business does?
- Where do you see your growth coming from in the next two-three years?
- How will you finance your future growth?
- What problems/options will you face?
- What constraints will you have and who will your competitors be?
- Why will potential customers buy from you?
- What direct threats is your business facing?
- Is digital planning relevant in this fast changing world?
The above are just a small selection of questions that you may or may not be able to answer.
A recent study revealed that 76% of businesses are missing this essential part – control and measuring potential threats to their business on the long term. Of course, it all depends on the size and culture of your business. Planning may not seem relevant to you as a small business, but I can assure you that those who have achieved success, have done so because they have a clear, well defined On and Off-line strategy. Businesses that don’t follow the digital road will struggle and may well see their doors closing sooner or later.
An intelligent business will analyse competitor’s and sometimes borrow ideas from other industries, in order to gather insight and develop fresh tactics to their advantage.
Going back to EasyJet analogy – they borrow its business model from United States carrier Southwest Airlines*. They have re-adapted the model for the European market through further cost-cutting measures as not selling connecting flights or providing complimentary snacks on board and advertise their offer on social media.
*[Extracted from Wikipedia]
Now we have reached the point where every company should have a clear set of goals and objectives in order to achieve maximum success.
I want you to download our 2013 Strategy Guide Essentials and complete the 9 items on this list and start implement them in the next few days. Once you have done it, drop a comment on this post sharing your experience.
For more information on how to improve your business strategy, call 01252679885 for an informal chat. Our consultants have proven expertise in online repositioning and boosting operational strategic growth.
Update date : 23.04.16