In business, strategic management is akin to making a highway journey because it requires high-level focus to manage scarce resources toward arriving at your destination. Similarly, pursuing too many strategies might adversely affect organizational processes, such as workflow inconsistencies and unstable operational procedures.
Pursuing too many strategies at once leads to the over-diversification of a business and the consequent dissipation of available resources (human and capital), which are in most cases scarce. Too many strategies lack funding and marketing opportunities while creating focus divergence, diluting organizational performance and efficiency to the point where no specific goal is achieved.
As cliché as it sounds, ‘too many cooks spoil the broth.’ The same holds for any organization pursuing too many strategies at once. It is also similar to establishments that set up several KPIs where process focus becomes difficult to maintain. So, this article will cover all you need to know about whether it is advisable to pursue too many strategies at once. Keep reading!
What is a business strategy?
A business strategy is a plan that helps a company achieve its goals. The main purpose of having a business strategy is to set priorities, focus resources, and make decisions on how best to compete in the marketplace.
A business strategy is important because it helps a company figure out what it wants to be, and how to get there.
It outlines the short-term and long-term goals of the company, as well as how it plans on achieving them. Without a proper business strategy in place, a company can quickly become bogged down by its own internal politics and struggles to make progress towards its goals.
A good business strategy should be based on a thorough analysis of your company’s strengths, weaknesses, opportunities and threats. It should also take into account your company’s resources, capabilities and limitations. Furthermore, it should be clear, concise and easy to implement.
A well-executed business strategy can also help a company attract new customers, boost productivity levels and reduce costs.
What Is the Problem With Pursuing Too Many Business Strategies at Once?
Pursuing too many strategies at once can be detrimental to businesses because it can cause them to lose focus and become spread too thin.
When companies pursue multiple strategies simultaneously, they often end up diluting their efforts and not achieving any of their objectives.
Additionally, pursuing too many strategies can lead to confusion within an organization and among employees regarding what the company’s priorities are supposed to be.
Therefore, it is generally advisable for companies to choose one or two strategic initiatives to pursue at any given time.
It is typically the problem with multitasking, where decreased focused energy breeds mediocre performance. Also, having several plans creates the problem of scarce resources where projects within the organization compete for a chance to be executed.
A typical example to buttress this point is a freelance writer specializing in non-fiction writing with deliverables such as articles and blog posts. They might encounter more career difficulties when adding fiction writing to the mix.
Eventually, they end up jeopardizing the quality of their articles and blog posts because they have to channel a significant proportion of their writing energy and resources to feed the fiction writing niche.
Of course, it does not preclude that some corporate entities, especially big businesses, thrive on diversification. However, it requires a massive investment of resources to drive significant business outcomes by pursuing several strategies simultaneously.
The Single Business Strategy and Why It Trumps Over-Diversification
A single business strategy is an alternative to following a multi-strategy for ensuring organizational success. Essentially, a single business action plan is one where an establishment generates a higher percentage of its return on investment from one business activity.
Corporate entities can carry out single business strategies in two ways:
- Using the power of operational cohesion, they create a collection of operating procedures and objectives covering your business.
- They concentrate on a particular product or service using the power of focused production.
Pursuing one action plan for your business accrues multi-level advantages for employees, employers and customers. Essentially, following a single business strategy utilizes the efficacy of focus in what strategic analysts define as a focused strategy.
A focused design allows corporate entities to aggregate their organizational resources on expansion projects like breaking into a narrow market. However, it only works when the establishment has good knowledge of its target market and the capacity to meet consumer needs effectively.
Therefore businesses become established experts in a particular niche through a focused approach. The reason is that they produce, market and sell specific products and services instead of pursuing a generalized action plan through diversification.
Advantages of Pursuing a Single/Focused Action Plan
Strategic objectives are key to long term business growth, so it’s natural you might think more are better.
It creates an integrated operational system to encourage easy management.
Managing an organization is no easy feat. As a result, it is pretty challenging to coordinate several facets of a business, especially with so much diversification.
However, a focused scheme allows you to integrate all aspects of your organization to create a solid managerial framework. It is also the same principle at work with program management, where several interrelated projects are grouped into programs for easy management and execution.
As a result, your establishment can achieve higher productivity with a somewhat united front. Furthermore, it builds a formidable team of efficient employees as everyone knows their respective duties and obligations to the company.
It Reinforces Customer Loyalty.
Customers remain loyal to your brand when they feel you created something specifically to meet their needs. Businesses can only execute focused action plans by observing customer needs which requires great efforts by their marketing and public relations teams.
It Offers Businesses a Price Review Opportunity.
Upward price review through premium services is one important way for businesses to make more profit. Also, a company can only review its prices when it offers customer-centric products and services.
Additionally, the loyalty of your customers due to your focused schemes earns you the legitimate right to increase your prices, for which customers will still be happy to pay. The reason is that most consumers care more about quality and are willing to pay a premium.
Focus Builds Business Expertise.
Expertise in an undeniable benefit of focus in all aspects of life and business is no exception. Essentially, expertise elevates your business standards and sets you ahead of the competition. Big business owners go the extra mile to hire the best human resources experts in a given field.
It is interesting to know that focus breeds expertise because there is minimal dissipated energy and divergence of attention. Additionally, focus increases your competitive advantage by reinforcing your undisputed expertise.
It Significantly Lowers Your Production Costs and Increases Product Quality.
A focused or single strategy gives you lesser key performance indicators to pursue. As a result, you spend fewer resources to nurture other products and services due to diversification.
Essentially, your concentrated efforts on a single product or service enable you to cut the cost of raw materials by making you require lesser resources. This way, you can concentrate on building cost-effective business models for your single product line while aggregating production resources into one product.
The single business approach yields high-quality products due to aggregate production. It is akin to baking the best quality cakes after adding more ingredients instead of making poor-quality pastries because you have several pies to make from the same ingredients.
It Helps With Branding.
Pursuing a single business blueprint helps with branding by magnifying an establishment’s image due to promoting a single business idea. It also revolutionizes the corporate vision by giving a significant area of focus for promotion and marketing.
This way, the establishment has more control over its public perception and serves as an effective tool for company rebranding in turbulent times.
Disadvantages of Pursuing a Single/Focused Action Plan
It May Stifle Company Growth
The focused or single-action plan may significantly stifle a company’s growth by limiting product and service demand because people have fewer options. The idea is that human beings are creatures of choice. As a result, people prefer having several options to choose from instead of dealing with specific products and services.
The reason is that they have more certainty and less novelty, which significantly removes the novelty of making a purchase. This way, most businesses may struggle with recording steady growth, especially in sales, securing customer loyalty and brand awareness. Furthermore, it becomes difficult to establish brand expansion.
It May Discourage Automation and Technology.
Business diversification encourages leaders to adopt the latest technology in reducing goods and services to supply their multi-product channels. Unfortunately, most establishments following a single scheme might be reluctant to upgrade or introduce the latest technological advancements since they have only one active line to follow.
It Creates a Lack of Business Diversity.
Business diversification has benefits that may elude your establishment due to pursuing one format. It causes you to invest all your resources in a single strategy, thus elevating your risk propensity. On the other hand, diversification creates a backup plan for your business to continue thriving.
It Is a High-Risk Venture.
Operating fewer strategies is akin to putting all your eggs in one basket, which raises your risk propensity. As a result, the slightest changes in market activity can jeopardize your business. It also subjects you to a single stream or source of income, unlike others who operate several business models.
How Not To Pursue Too Many Strategies at Once by Using the Single/Focused Scheme
Single or focused business strategies allow corporate entities to develop, market and sell products and services in a specific niche or industry. The particular areas could be specific customers, demographics, geographical regions, or a unique product line.
To a large extent, an establishment might have to invest heavily in public relations and brand awareness to gain ground in pursuing a focused or single strategy. However, the hard work pays off continually over time by establishing a trusted brand and signature for the business.
The rationale behind pursuing a single or focused business scheme is to create an unbreakable connection with available customers to retain their loyalty through targeted tactics.
Here are two effective steps toward cultivating a single or focused scheme for your business.
Carry Out a SWOT Analysis
SWOT is an acronym for strength, weakness, opportunities, and threats. It is a fundamental analysis in strategic management used to evaluate the business’s in-house features and how extraneous activities affect its survival.
It is an effective tool for analyzing your business based on the following metrics:
- Strengths: The products and services that make your business unique and ahead of the competition. Customer reviews help you identify your business strengths.
- Weaknesses: Here, you identify areas of improvement that could reduce your marketability. It also helps you fix quality control and assurance issues, including resource allocation problems.
- Opportunities: It analyzes the market trend and how it benefits your business.
- Threats: It analyzes the edge your competitors have over your business, such as technology and automated processes, high-powered machines etc. It also allows you to tighten loose ends and remain in business.
Set SMART Goals
SMART is an acronym for specific, measurable, achievable, relevant and time-bound. It is an effective strategic management tool for goal setting toward improving organizational productivity. Here is how it works:
- S for Specific: Company goals must be straight to the point, well defined and properly understood by all team members.
- M for Measurable: Every establishment should have metrics for evaluating company performance, including assessing customer reaction to their products and services.
- A for Achievable: Organizational goals should be realistic and attainable, including budget creation and resource allocation.
- R for Relevant: All company goals should fit the times and blend with the market trends.
- T for Time-bound: Effective company goals are time-bound to corroborate the specificity of the goals. For instance, company goals could be a one or two-year plan, etc.
Features of a Single Business Strategy vs. Diversification Strategies
Diversification benefits bigger companies better compared to small businesses. However, here is a table comparing both business schemes and their results.
| Single Business Strategy | Diversification Strategy |
| It depends on a single product and business approach. | It depends on multiple products and business approaches. |
| It uses risk as a catalyst for expansion. | It avoids risks of expansion. |
| It attains productivity by using focus through concentrated effort. | It attains productivity by dissipating energy through diversification. |
| It uses one market strategy. | It uses multiple marketing strategies. |
| It offers specialized products and services. | It offers generalized and varied products and services. |
Comparison Table Between the Benefits of the Single Business Strategy and Pursuing Too Many Strategies at Once.
Understanding the advantages of the single and diverse business model lets you choose the best action plan for your enterprise.
| Benefits of Pursuing a Single Business Strategy | Benefits of Pursuing Too Many Business Strategies |
| It offers more solid brand protection: Pursuing fewer action plans and business models presents your company as an authority in a particular niche. As a result, it raises your competitive advantage through product and service specialization. Customers are more likely to easily remember you for a single product than for various products. | It mitigates business risks: Pursuing too many business action plans creates multiple backup plans to prevent exposure to financial troubles. Business diversification leads to several options in case of an unprofitable event from one of the businesses, leaving the other to cover up. |
| It encourages the conservation of available resources: Too many business models create a competition for scarce resources, thus disrupting free resource allocation. Additionally, it puts significant financial strain on the company’s budget to fund several action plans. | It increases competition in business: Competition drives most companies, so business diversification creates room for increased competition. An establishment can double its competitive advantage significantly by offering multiple product lines to the market. |
| It cultivates organizational focus: Coordinating and managing several action plans at once can be energy-draining since you will have several business models competing for your attention. Eventually, you might generate mediocre outcomes due to scattered energies. | It encourages product differentiation: A single business plan cannot leverage product differentiation because it contradicts the fundamental principle. Instead, the competition in diversification leads to product differentiation to create more channels for businesses to remain in business and ahead of the competition by creating products that separate them from their competitors. |
Frequently Asked Questions
Why is a strategy important for running a small business?
Small businesses have very few resources to run the business. As a result, a strategy helps with proper resource allocation and management to maintain a competitive edge and survival in the market. Also, an outline helps employees understand their respective duties to enable them to maintain employee efficiency.
Why Is Implementing a Strategy More Challenging for Businesses Than Planning?
Most businesses find it difficult to implement a strategy compared to planning it because the implementation stage of strategic management is replete with unimaginable uncertainties. The business leaders cannot predict the realization of the business goals unless they blindly implement the plan, which provides them with only one way to find out.
What Makes Strategic Management a Challenge for Most Establishments?
Strategic management involves analytical thinking where the business managers: executives, and program and project managers deal with conflicting priorities and decide between projects to be executed with the scarce resources available. The mental energy required for strategic management makes it challenging for most establishments.
Final Thoughts
When looking to improve business operations, it is important that managers focus on one strategy at a time. While it may be tempting to try and pursue multiple strategies simultaneously, this can often lead to negative consequences such as lack of focus, unclear priorities, and ineffective implementation.
By instead focusing on one strategy at a time, businesses will be able to more effectively take advantage of opportunities and see improved results overall.
Pursuing too many strategies is an illusion that robs you of an effective business plan. Also, a SWOT analysis is invaluable for deciding where to channel your focus; hopefully, this article helps immensely.
