By: Steven Darien
With many large corporations streamlining their company’s overhead, an increasing number of people are turning to entrepreneurship in an attempt to secure their futures. However, for many who have never had to consider creating their own business strategy, the prospect of deciding even such simple factors as product pricing can be daunting.
Obviously, the best business strategy involves pricing products at the highest cost to consumers that the market will bear. Dynamics to keep in mind in determining this component of your business strategy include how pricing will define your brand and what it means for your company’s long-term viability. A smart business strategy takes into account such issues as the pricing models used by existing competitors, the target market, and future growth potential. When developing a business strategy, it is a good idea to establish a complementary marketing strategy. While the marketing component determines how you will reach your customers, the business strategy shapes the prospect of earnings and new products, and it even addresses the possibility of your company being purchased by a larger competitor.
A popular new business strategy involves giving the product away, but advertising it heavily. Revenue generated through this business strategy comes from click-through advertising. With a well-developed business strategy, click-through advertising propels robust revenue. Another current business strategy charges nothing for the product but uses installation as a motivation for profit. Through this model, the product often stands in for marketing initiatives. Also utilized now is a business strategy in which basic services are offered for free. Once customers are hooked in this way, they are often primed to purchase so-called premium products that provide a greater range of services.