5 critical components of your 2023 business strategy
ARTICLE | March 20, 2023
Authored by RSM Canada
In light of inflationary pressures, economic headwinds, geopolitical risk, and many conflicting so-called leading indicators, a business strategy refresh is paramount, especially for industrial and consumer product companies.
Updating your business strategy helps you remain competitive by prompting you to review changes in the marketplace, evolving consumer preferences, and advances in technology. This allows you to better respond to new opportunities and challenges while remaining relevant to your customers. The exercise helps you identify opportunities to streamline processes, reduce costs and improve overall efficiency. This is particularly important in an uncertain economy when companies need to be mindful of cost management.
While it should already be part of your leadership approach, a refresh helps you identify new and innovative ways of doing business—including through the development of new products, services, or markets—that can help drive growth and increase revenue. A well-designed and executed strategy can also improve your financial performance, helping you weather the impact of a recession and position your business for growth when the economy recovers, soft landing or not. And if there isn’t a recession, you will be even better positioned to double down on growth.
Refreshing your business strategy is a critical component of long-term success. By focusing on the key drivers of growth, such as innovation, efficiency, and customer engagement, you can build a sustainable and resilient business that is well-positioned for future success. Consider refreshing your strategy in 2023 with the following five components:
1. Capitalize on the 5G revolution
The 5G revolution will bring significant changes to the business landscape, and it's wise to consider the potential impact on your business strategy as 5G is rolled out both nationwide and globally.
- Explore new product opportunities – Take advantage of incredibly fast data speed, near-perfect connectivity, automation, improved data collection, and analysis, and expanded revenue streams. Investing in research and development and a technology refresh will bring new products to market that take advantage of the full suite of 5G technology. And don’t neglect cutting products that will become obsolete.
- Optimize your supply chain – 5G will improve supply chain operations by increasing speed and efficiency. Smart devices, automation, and robotics will optimize your supply chain and improve your competitiveness.
- Reassess your target market – The 5G revolution will change consumer preferences and the behavior of your target market. Market research will inform how to adjust your product offerings and marketing strategies to take advantage of the shift in buyer values and expectations.
5G will disrupt your business by increasing competition, inducing changes in consumer behavior, and inciting regulatory challenges. While you should be in the disruption business already with your strategy, develop contingency plans to address these external disruptions and minimize negative impact.
2. Be (even more) digital
In 1995, Nicholas Negroponte, former director of the MIT Media Lab, wrote the visionary book Being Digital. It is time for your company to reflect that title.
- Assess your digital maturity – Are you agile and flexible in your operations? Evaluate your technology infrastructure, invest in digital tools and platforms, and improve data management and analysis processes.
- Embrace e-commerce with a customer-centric approach – Expand your online presence and invest in e-commerce capabilities to reach a wider audience while improving the customer experience.
- Optimize your supply chain – Consider investing in smart devices, automation, and robotics to streamline your supply chain and improve your competitiveness.
- Leverage data and analytics to drive and automate decisions – Invest in data management and analysis tools and processes to inform and automate decision-making, improve customer insights and drive innovation in your product offerings.
- Foster a digital-first mindset – Promote digital literacy, encouraging experimentation and risk-taking. Provide opportunities for employees to innovate and bring new ideas to life.
3. Expand your horizons
Expansion is a time-honored business strategy. But it is important to approach any expansion carefully, especially when facing a slowing economy or pending recession.
- Conduct market research – Understand local economies, regulations, cultural norms, and consumer behavior. This will help you determine which markets are likely to be most promising for your business.
- Develop a local presence – A local presence is critical to build trust and credibility with customers and key partners in new markets. This may involve opening local offices, forming partnerships with local businesses, or setting up local supply chains.
- Localize your product offerings – Adapt product offerings to meet the needs and preferences of your target demographics. Modify your products, customize marketing materials, and partner with local suppliers where possible.
- Evaluate logistics and supply chain – Invest in technology and infrastructure to ensure that you can efficiently and cost-effectively deliver your products to customers in new markets.
- Foster meaningful relationships with local stakeholders – Building strong relationships with local stakeholders, such as government agencies and suppliers, is critical to success in new markets. Understand local business practices and develop a strong network of local contacts.
4. Embrace ESG
Consumers and investors are increasingly environmentally and socially conscious. Addressing environmental, social, and governance factors improves your reputation and creates new business opportunities. ESG is simply good for business—leading to increased sales, improved pricing, higher margins, better talent acquisition/retention, and higher valuations.
- Assess your ESG performance – Evaluate your performance against a recognized ESG framework or rating provider and identify areas for improvement. Conduct a sustainability audit, set ESG targets and key performance indicators, and engage with stakeholders to understand their expectations and concerns.
- Foster transparency – Be transparent with your ESG performance and disclose relevant information to investors, customers, and employees. Publish sustainability reports, participate in ESG reporting frameworks, and engage with stakeholders on ESG topics.
- Invest in sustainability – Improve your ESG performance by reducing your carbon footprint, improving working conditions, or investing in renewable energy. And take meaningful action on diversity, equity, and inclusion.
- Collaborate with stakeholders – Address ESG challenges and opportunities by partnering with suppliers and customers on sustainability initiatives, engaging with government agencies on policy initiatives, or participating in industry groups and initiatives that promote ESG best practices.
Incorporating ESG into your business strategy will enhance your reputation, build customer loyalty and earn investor trust in the long term. But make it real and be careful not to enter the realm of greenwashing—falsely promoting products as environmentally sound.
5. Think next-gen(eration)
Generation Z is an important demographic. Design your marketing and products around this generation, as they are the consumers and corporate buyers of tomorrow.
- Prioritize digital engagement – Gen Z is the first digital-native generation. Engage them through digital channels, such as social media, online marketplaces, and mobile apps. Offer online shopping options, create engaging social media content, and use digital tools to improve the customer experience.
- Focus on sustainability – Known for being environmentally and socially conscious, design sustainability initiatives that appeal to this demographic. This applies to both their personal and corporate purchases.
- Offer flexible payment options – The Gen Z consumer values financial flexibility. Consider offering flexible payment options, such as installment plans, that make your products more accessible.
- Personalize the customer experience – The digital native is used to a personalized experience. Invest in technology and data analytics to personalize the customer/buyer experience and make it more relevant and engaging.
- Build community – Gen Z values community and social connections. Consider hosting events and creating digital communities that allow your customers to connect and engage with your brand.
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This article was written by Jon Caforio and originally appeared on 2023-03-20 RSM Canada, and is available online at https://rsmcanada.com/insights/services/business-strategy-operations/5-critical-components-of-your-2023-business-strategy.html.
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