A successful follow up strategy for the startup companies could be an amalgam of integrated management, marketing, finance/accounting, production/operations, research and development coupled with tech information systems ensuring long term organizational success and achieving competitive advantage. For a successful startup, strategy should be designed and fabricated in a way so that it efficiently exploits and create novel and different opportunities for tomorrow, long range planning, in contrast, tries to optimize for tomorrow the trends of today. At first, the startup company should justify the purpose of the existence of its business. Before taking decision on organizational purpose, company should commence the analysis of external and internal environment and organizational architecture coupled with goal setting. This should be followed by developing the strategy of an organization The strategy formulation should be comprised of vision and mission development, identification of organization’s external opportunities and threats, determination of internal strengths and weakness, establishment of long term objectives, generation of alternative strategies and selection of particular strategies to pursue. A strategic plan is an essence of organization’s game plan. So, a company must have a good strategic plan to compete and exist successfully in market. The need of an hour is to prepare a strategic plan before the commencement of the business and the plan should results from hard-bitten managerial choices among abundant better alternatives and it signals commitment and dedication towards specific markets, policies, procedures and operations. A success strategy focuses over the judicious use of available resources, their justified allocation to different tasks and operations and decision making processes. The decision making process involves whether to expand operations or diversify, whether to expand internationally, whether to merge or form a joint venture and how to avoid hostile takeover.
Strategy formulation should always be ready with the alternatives and backup plan for long term run. Thereafter, Startegy implementation comes into action which directs the firm to be acquainted with annual objectives establishment, policies framing, motivating employees and allocating resources in justified manner. The organization architecture should go hand in hand with organization culture for creating effective organizational structure, reinforcing marketing efforts, preparing budgets and linking employees’ incentives and compensation to organization performance.
Real world examples of successful startups direct to follow the strategic model in its purest form without any alteration. It explains that be it low cost strategic model or differentiation model; it should always be followed in its pure form. The reason behind the mega fourfold jump in net profit of Indigo airlines is nothing but obsessive focus on cost reduction by following the low cost carrier model which resulted in continuous beating down of costs and maintaining the profitability margin at its best and does not results in loss because company effectively manages its repair and maintenance cost on airlines. The economies of scale has been maintained due to sticking to low cost model strategy where company follow short term lease strategy under which the aircraft is sent for maintenance after every six years(other airlines keep them for longer period of time)which helps in reducing the repair and maintenance cost.
Interpersonal skills are of critical importance for successful strategy implementation. Every single department and division of an organization and its employees must decide on answers to questions like “How best can we get the work done”? And “What must we do to implement our part of the organization’s strategy”? .It requires personal discipline, commitment and sacrifice towards the organization’s goal. The challenge is to vitalize the workforce with pride and enthusiasm to achieve the stated goal. The work culture should always be compatible for both managers and employees for effective work environment. The unparallel role of managers in fuelling their employees towards goal is of utmost importance. Citing the example of a successful online restaurant discovery guide-Zomato, whose success mantra lies in the quality of talented workforce it hires. The startups are mostly cash strapped and high on propensity for talent. So, the utmost requirement is to look for human resource with passion of doing unconventional things in right manner.
A successful strategy always thinks through the overall mission of a business and maintaining balance between the stated objectives and needs of today against the need of tomorrow will lead to key results.Integartion of Intuition and managerial analysis in decision making is very essential for achieving long run race. Flexibility and adaptation to change is an important aspect for consideration. In today’s business environment, the only constant is change. Successful company effectively manages change and alterations, continuously adapting their bureaucracies, strategies, systems, products and work culture to survive the shocks and prosper from the forces that decimate the competition.
Gaining and maintaining competitive advantage over competitors is the crust of all the strategies. The sustained competitive advantage over the rival competitors could be attained by continually adapting to change in external trends and events and internal capabilities and competencies and resources. A successful firm should always concentrates over beautiful amalgamation of skill culture and work culture. The liveliness of this aspect can be beautifully exemplified through success of Ola cabs. According to people behind Ola cabs, being a startup, everything is very real time and this is a big difference when compared to a corporate. There is no fixed schedule because every division and each department time and again combats new challenges every week. It’s ultimately the working environment and work culture which enables people to juggle all the task burdens and manages them within 24 hrs in early days of establishment. Technology adoption and its understanding is very important in present era to pace up with herculean competitors. One major reason behind the ongoing success of Ola cabs is that the entire set up has magical touch of technology and offers friendly tech savvy cab booking services through app and various multiple channels, which results in ease for both customers and service providers.Ola cabs are following pure differentiation model strategy in offering transportation service, where instead of buying and renting out their own cars, they have partnered with a number of taxi drivers for booking of cars. The Ola cab company works on pay-per-performance model which operates by getting a commission on every sale that the taxi driver makes.
Crafting competitive strategies for running a successful firm is very important. A startup should take offensive or defensive actions to create a defendable position in an industry and thereby yield a superior return on investment for the firm. A successful startup is driven by its vision and mission and not by money. Vision and mission provides higher commitment over longer period of time towards society and thereby sets the direction and maintains the sustainability of any firm. Having a firm and clear vision gives us committed employees, lower cost, higher productivity and lower attrition rate. Vision statement keeps the organization commitment of what it can become and provides guidance for future going. The major consideration taken by firm during framing vision statement should be in interest of customers, employee, managers and primary and secondary stakeholders. Vision statement should be realistic and comprehensive in terms of core business description. Research states that firms with mission statement have a 30% higher return on financial measures than the firm without mission statement. Vision and mission affirm the company’s commitment to responsible action, sustained survival, growth and profitability of firm. Lose sight of mission and vision, and you lose the company.
Always be overt to entrepreneurial ideas and innovative thoughts. Trusting your gut is something which can become a strong base for a successful startup. Intuition is a real form of knowledge which eases in devising brilliant strategies and good strategic decisions. Analytical thinking and intuitive thinking should always pave the path hand in hand because complementation of both has resulted in survival of many organizations. Assessment of internal strengths and weakness of yourself and your rivals is highly important to build an edge. Strength and weaknesses should always be determined relative to competitors. Relative deficiency or superiority is important information.
Building long term objectives are essential for organization’s success as they state direction, aid in evaluation, direct proper implementation and monitoring, create synergy, reveals priorities, focus coordination and provide a basis for effective planning, organizing, motivating and controlling activities.Startegies are dynamic and continuous. Framing a successful strategy allows an organization to be more proactive than reactive in shaping its own future; it allows the company to initiate and influence activities and thus exerts control over its own destiny. Communication and interaction is a key to successful strategy formulation and its management. Dialogue and participation of employees and managers is of critical importance. Making of good strategic decision should follow bottom up and participatory approach and incorporates employees and managers also with organization’s owners in formulation, implementation and evaluation activities of the firm. Open mindedness is an essential ingredient of successful strategy formulation which invites new viewpoints, new ideas, new informations and new possibilities in overall aspect of organization’s existence.
The article has been co-written by Anuj Verma and Shrinkhala Singh. They are currently pursuing their MBA from IRMA.