Benefits of Strategic Business Management

Many success stories from industry giants are thanks to well-placed strategic business management which has ensured they stand out from competitors in today’s ever-expanding market place. 

Decision making in the business sector is a multiple-step process which requires a thorough assessment of organisational goals.

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This means to plan, monitor and analyse everything to ensure its operations are aligned with subsequent goals and objectives.

Such an intricate process is needed for a company to implement the right strategies that can help the business succeed. It is also pivotal for organisations to continuously assess and re-work their strategies in accordance with the business climate at that time.

Well thought out business strategies are the key to success for any enterprise, regardless of its size. Germany is a clear example of this. A huge proportion of the country’s developed economy is made up of small or medium-sized enterprises (SMEs) and each one is progressing rapidly. In fact, 60% of total employment is generated by these companies.

The reason for the tremendous growth of these mid-size firms is strategic management in German Mittelstand (German SMEs). Sharp focus on innovation with an equally impressive strategic approach has made them the backbone of German economy.

Germany’s Small and Medium-sized companies

While names like Volkswagen, Deutsche Telekom, Bosch, Allianz and Mercedes-Benz may seem the face of Germany’s industry success, it is also the smaller enterprises which play a huge role in the country’s success.  

You might be surprised to know that less well-known companies like Weinig, Krones and TetraWerke have significantly contributed to Germany’s success in the international market. Smaller firms such as these hold a bulk share in the world market, contributing to around 70% to 90% of Germany’s trade surplus, a surplus which is now 6.8% more than the U.S. and 47.2% more than Japan.

So, how are these smaller companies making such giant splashes? The answer is in the various types of strategic management deployed to ensure they are making the most of their resources. 

The strategy of German Mittlestand

Germany has several small key players that significantly add to the country’s economic development and performance. This may be due to the fact that as a nation, Germany has always taken a different strategy compared to other developed countries in placing focus on smaller enterprises instead of solely focusing on big corporations. 

The smaller firms also make full use of strategic business management, ensuring decisions are made to give them a competitive advantage. For example, German Mittlestand invested over 15% of their total spending (around 8.7 billion euros) on designing new products and technology. This gives them an advantage in experimenting with new technology and improving the overall quality of their product and services, which in turn, brings the firm a remarkable amount of growth and profitability.

The core business strategy of German Mittelstand is to put the focus on innovation and investing money in ensuring durability for their products. This sends a strong message to the customer that the business is dependable and reliable. German Mittelstand understands the market niches and customer requirements and accordingly work on the production process and business models accordingly. 

Such firms also rely on a transparent and well-structured management system which ensures that workers are included in all decision-making processes. Mittelstand companies exude traits of family owned business in that management has a close-knit relationship with employees and the CEO knows almost all the employees. This eliminates the wide gap between higher decision-makers and the executives. 

Lastly, these companies use local suppliers and supply chain strategies, investing deeply in a strong relationship with their suppliers and getting involved with the process of product development. They are also equally focused on finding opportunities all across the globe and are dedicated to sourcing and following new leads. 

Business strategies from around the world 

Leveraging excellent business strategies has not only worked for Germany, but globally as well. Many brands have done exceedingly well by making well-defined strategies that have brought prominence to their product and services. Here are a few of them:

  • Toyota– The strategy of continuous improvement at adaptable prices worked well for the Japanese carmakers. They took on the U.S market with affordable cars that were both efficient and pocket friendly for Americans. They even established plants in the U.S.A. which eliminated the need to pay any import taxes. The brand has continuously worked on improving their product and hence are among the leaders in the manufacturing world.
  • Airbnb– The rise of Airbnb has been remarkable, and this may be down to fully understanding their target audience which, in this case, were millennials looking for experiential travel. They also based their strategy on creating a unique product, positioning it well making good use of a cocktail of marketing in the form of SEO, emails, social media and referral marketing too.

Students aspiring to lucrative careers with strategic business management must understand the impact and relevance it holds in the current business world. Being well informed is an important requisite for the job and MSc Strategic Business Management from Gisma Business School can help you with this.

Best suited for students looking for global job roles, this course preps you for positions ranging from manager to analyst and even entrepreneur. MSc Strategic Business Management is also accredited by the acclaimed The University of Law which holds a high placement rate after graduation. If you are keen to take your career to the next level, click on the link


 – This article is written by Nandita Kaushal.

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