It doesn’t matter whether you’re a brand new business or an established brand, a large company or a startup, unlocking your business’ success is key. Otherwise, how do you expect to grow? To do this, you need to look at strategic value drivers. Regardless of your business’ size or industry, understanding and using strategic value drivers can transform your approach to growth, helping you achieve a distinct competitive edge and significant growth. Below, we have taken a look at what strategic value drivers are, why they’re essential for business success and which your business should be focusing on.
What are Strategic Value Drivers?
When it comes to making a profit, strategic value drivers play a big part. They are the key factors that boost the value of a business, and they do this by highlighting its competencies and competitive advantages. To put it simply, they drive value. Value drivers are the main parts of the business that generate profit and distinguish a company from its competitors – for example, product innovation, operational efficiency and skilled workers – positioning it as being completely unique in even the most competitive of markets.
For example, a business’ value driver might be the expertise of its workforce, or the strength of its customer relationships. It might be the strength of its brand, or its impressive cash flow. Strategic value drivers not only define a business’ products or services, but they also influence a business’ overall strategy and growth trajectory.
As a business owner, you need to understand strategic value drivers and ensure they’re part of your long term strategy for growth. By focusing on value drivers such as revenue growth and product innovation, you have a better chance of creating a sustainable growth strategy and giving yourself a competitive edge.
The Key Strategic Value Drivers for Your Business
As we explained above, strategic value drivers are the key elements that impact a business’ ability to create value and achieve its growth objectives. These drivers can vary widely depending on the industry, market conditions and specific business goals, and you won’t necessarily have the same value drivers as your competitors.
Though there are a range of value drivers out there, they all tend to fall into a handful of key categories, which we have explained below.
- Brand Strength and Market Position – With other businesses vying for the same customers, leads and sales, your reputation needs to speak for itself, as does your position in the market. A strong brand and a well established market position can give your business a competitive edge, helping it to stand out and make a statement amongst other businesses. Building a reputable brand and securing a strong market position can lead to increased customer trust and premium pricing.
- Operational Efficiency – It’ll come as no surprise that operational efficiency is one of the main strategic value drivers. Streamlining operations to reduce costs, improve productivity and enhance product or service quality can be a powerful value driver. Efficient processes and effective resource management can lead to higher profit margins, faster delivery times and better overall business performance.
- Service or Product Innovation and Development – Whether you provide services or products, innovation and development are important if you want to grow and succeed as a business. Continuously developing new products or improving existing ones can differentiate your business from competitors, helping you to stand out in a competitive market. Innovation drives growth by meeting changing customer needs and capturing new market opportunities, some of which other businesses might not have yet tapped into.
- Customer Satisfaction – As a business, you need to keep your customers happy, and the ability to meet and exceed customer expectations is a significant value driver. High levels of customer satisfaction often result in increased loyalty, repeat business and positive word-of-mouth referrals, all of which can drive revenue growth and boost your market share. Think about it, customers are much more likely to return to your business if they had a good experience the first time.
- Financial Performance – As you might expect, financial performance is a key strategic value driver for business success. Financial information – such as revenue growth, profitability and cash flow – are all value drivers that you should be focusing on. Strong financial performance not only supports business operations and processes, but it also provides the resources needed for reinvestment, expansion and sustained growth. Without a strong financial performance, it’s very hard to take your business to the next level.
Which Strategic Value Drivers Should You Be Focusing On?
If you want to get as much out of strategic value drivers as possible, you need to determine which are the most relevant to your business. You can do this in a number of ways.
- Look at Customer Feedback – Collect and analyse customer feedback to understand what drives their satisfaction and loyalty. For some businesses, customers might keep returning because of innovative products and services. For others, it might be the customer service that keeps them loyal. Identifying common themes in customer feedback, as well as any standout pain points, can reveal valuable insights into your key value drivers.
- Review Your Financial Performance – You’ll gain a lot from looking at your financial performance. It’s something that you should review regularly anyway, but it’s especially important when it comes to unlocking business success with strategic value drivers. By reviewing your financial performance, you can determine which aspects of your business are contributing most to profitability and growth. This can help you focus on the financial value drivers that need the most help, and you’ll know which to spend less time on. There’s a lot that goes into growing a business, and it makes sense that your time, money and resources are focused on the most valuable value drivers.
- Analyse Your Business – This is where a SWOT analysis comes in handy, as it will highlight your business Strengths, Weaknesses, Opportunities and Threats. Conducting a SWOT analysis on your business will help you to identify the areas that are most important to your success and highlight the value drivers that need the most attention. You’ll then know what to focus on.
- Compare Your Business With Competitors – Take a look at your competitors and see which value drivers they are using effectively. The chances are, if a value driver is working for them, it’ll work for you too. Though your businesses won’t be identical by any means, looking at what they’re up to can provide insights into industry standards and help you identify areas where you can gain a competitive advantage. If a competitor is missing out on a key value driver, it could be a sign that there’s room for you to swoop in.
As you can probably tell, strategic value drivers are a key part of unlocking your business’ full potential and achieving lasting success. By identifying and optimising these key factors, you can gain valuable insights into what differentiates your business from competitors, highlighting the strengths that you have to drive growth. But, navigating this process can be complex and challenging, which is why many businesses enlist the help of business growth partners.
At Profici, our experts provide valuable guidance and support, helping you to effectively analyse and use your strategic value drivers. With our expertise, you can streamline your strategies, overcome obstacles, and maximise your business’s potential, all with sustained and long term growth in mind. Partnering with growth specialists ensures that you are not only aware of your value drivers, but also equipped to use them effectively. Contact us today to find out more about strategic value drivers and how Profici can help you.
No Blogs