Need A Business Strategy?
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Reading these sections won’t qualify you for a job at McKinsey & Company, but if someone mentions Six Sigma, you’ll know they’re not talking about a Tom Clancy novel. From Outsourcing to Lean Thinking; it’s all here.
The only person who can drive a strategic initiative is the CEO. And the execution of that strategy will not happen without management ownership. If CEO cannot articulate a business strategy, next level managers will have to infer a strategy from memos and decisions handed down from the CEO.
It’s best to involve the whole team in a discussion about the company’s future. Don't develop a strategy in a vacuum.
Many companies will follow a strategy that seemed to work for a competitor. Big mistake. You’ll end up in race with the winner being the company with the most sales that quarter.
To gain a competitive edge for the long run, you need a distinctive plan that changes the rules of the game; in your favor. If your current strategy is not allowing you to control the rules……for example you lower your prices because they lowered their prices…….you need a new plan of attack.
When you control the rules of the marketplace, your competitor must react to your moves. And very often, its not easy to make those changes.
Here are a few strategic points:
• No Sanctuary : American automobile companies for along time ignored the small car market. The Japanese saw that as their opening and clobbered Detroit. After they developed manufacturing expertise, the luxury car market came next.
• Two Fronts : It’s best not to go after two competitors at once. Go after the one causing you the most trouble first. Only fight if you think you can gain at least 20 points.
• No Knives At a Gunfight : Is the Wal-Mart across town giving you trouble? Unless you can charge low prices for good quality…..offer free coffee and babysitting for shoppers…...make sure you have something Wal-Mart doesn't.
As Sheriff Brody said in the movie Jaws, “We’re going to need a bigger boat.”
• Several Step Plan : If you decide open a new store in another part of the country, you should expect a competitor to follow suit. If that happens, you must have that move already anticipated. One possibly is having a distribution center in that city. If you have a good idea, what move will make if a competitor copies it?
Shock & Awe is great....but have a follow-up.
What is your specialty or area of excellence? Is it outstanding customer service? Low cost? Customizable solutions? Large share of the teen market? These strengths must be identified, isolated and developed.
These areas will vary depending on company and industry. But over time, they will be your exclusive competitive advantage.
If your business strategy is product driven, that improving manufacturing quality will be your area of excellence. Dell is an example.
Does your company sell to a whole class of customers? Then you probably offer a variety of unrelated products. Proctor & Gamble sells a whole range of goods used everyday by retail customers. They invest heavily in consumer research to continually find new areas to exploit.
Is the ability to be everywhere or deliver anywhere your advantage? Then logistics and system efficiency are areas of excellence to develop.
An important theme that runs through effective business strategies is measurement. You can’t manage what you don’t measure. If you have metrics and standards you’ll never know if something’s getting better or worse.
Defects in production, revenue per sales person, delivery time, customer satisfaction, customer returns, stock price, and CEO performance. It’s all measurable. Once you set the baseline, you’ll know what to do.
Le Business Strategy
Six Sigma. Why You Should Be 99.9997% Perfect.
What It Means To Be Lean
Outsourcing. All The Big Guys Do it.
The Art of Negotiation
Effective Leadership
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