Given the proliferation of multiple security businesses offering everything from security guard services to electronic security products and services, in this column the author thoroughly explains some strategies to achieve success.
by Héctor R. Torres, PhD, CPP, CFE, CHS*
A fraternal greeting from Puerto Rico to all colleagues and readers of this column! It is a pleasure to share again with you. In today's column we will talk about the different strategies that can be used in security businesses. Many practitioners of our profession decide at one point in their lives to start in the field of business. Using their previous experience and seeing the security needs at the level of private companies, organizations and individuals, they offer security products and services.
As I have highlighted in my last few columns, we have seen in our respective countries the proliferation of multiple security businesses offering everything from security guard services to electronic security products and services. Any business that is new or years old must be based on one or more business strategies in order to compete successfully in markets nationally or internationally. Today we will talk about three strategies known as generic strategies that can be used to compete successfully in security businesses.
What is a business strategy?
Before entering into the definition of what a business strategy is, we must first define the basic term. The word strategy comes from the Greek word strategia which in turn comes from the word strategos which means commander or military leader. Therefore, strategia is the thinking of the commander or military leader. From the military point of view, strategy can be defined as the positioning of a military unit on the battlefield based on a plan whose purpose is to ensure unconditional victory. This is not much different from what is done in the business environment in order to compete successfully.
To develop a business strategy and implement it through a strategic plan we have to do several tasks. The first is to make a thorough analysis of the situation of the organization. This analysis takes into consideration the current situation of the organization from the internal and external point of view within the business environment. The situation of competition is also analyzed from the internal and external point of view.
Based on this analysis, we proceed to develop a new vision, mission and objectives of the organization. Once the new vision, mission and objectives of the organization are developed, a strategic plan is formulated to meet the objectives of an organization. This plan must have the following characteristics:
* It is long-range into the future (3 to 5 years).
* Used to interact with the business environment to achieve the objectives of the organization.
*Provides a scaffolding for strategic managerial decisions and reflects the organization's perception of the main elements of competition.
Three generic business strategies
A generic strategy is defined as a strategy that is executed over the long term based on an idea of how an organization should better compete in its business environment. There are three generic strategies that can be used individually or in combination. The first strategy is Low Cost Leadership.
Low-cost leadership strategy
This strategy is based on making an organization a leader within its market or business environment through its competitive advantage of providing lower prices than its competitors and obtaining higher profits. Low-cost leadership organizations are characterized by:
* Use economies of scale (that is, the process by which unit costs of production decrease as the number of units produced increases).
* Reduce operational and administrative costs.
* Improve the efficiency of all your processes.
* They use sales volume to maximize their profits.
Security businesses that use this strategy require that they be able to provide their products or services at a lower cost than their competition can offer.
Differentiation Strategy
This strategy is based on differentiating the products or services in a way that is able to compete in the market. This strategy is appropriate for a business when the market segment being sought:
* Is not sensitive to the price of the product or service.
* When the market is competitive or saturated.
* When customers have very specific needs that have not been met by the market.
* When the organization possesses unique resources and capabilities that give it opportunities to meet the needs of its customers in ways that are difficult to imitate.
The Differentiation Strategy is designed to attract customers to a particular attribute of the product or service. By emphasizing this attribute over the other qualities of the product or service, the organization can develop the loyalty of its customers. This loyalty translates into the ability to charge a price above competitors.
Focus Strategy
This strategy is based on meeting the needs of a particular segment of the market through low costs or differentiation of products or services. An organization employing this strategy must be willing to:
* Provide your product or service in isolated geographical areas.
* Meet the needs of customers with financing, inventory, service problems.
* Tailor your product or service to the needs of a medium or small clientele.
Organizations that employ this strategy benefit in their willingness to serve ignored or undervalued market segments.
Strategic planners recognize that short-term profits are not the best approach to ensuring sustained growth and profitability of an organization. Therefore, the use of strategic plans based on these generic strategies offers the best chance of long-term success. No entrepreneur plans to fail, yet many fail by not thinking and planning strategically. I invite you to continue to share your ideas and concerns of the world and security management. A hug and see you next time!!
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