Boosting the Competitiveness of Business Strategy
Good Strategy / Bad Strategy
Unfortunately over time the term ‘strategy’ has perhaps become the most misused and misunderstood word in the business dictionary. It has become confused with the missions, visions, goals, ambition, values and planning of business. It has been applied to just about every type of plan for every type of business activity regardless of whether or not it addresses a specific challenge or addresses competition.
A good strategy addresses a specific challenge, evaluates the situation and options, determines the most viable solution, provides clear direction and establishes the critical actions required. Good strategies require knowledge, analytical skill, innovative thinking and precise formulation.
Bad strategies by comparison are often little more than restatements of the status quo, wish lists and sound bites. Strategising in many businesses lacks any direct connection to how they will enable the business to address its core challenges and beat its competitors. There is a very strong need to remind ourselves just what a strategy really is and what it isn’t.
‘Competitive Strategies’ are those truly unique to just one business (within its own target market) and are specifically designed to give that business a long term competitive advantage over its direct competitors. Michael Porter identified three generic types of competitive strategies; Cost Leadership, Focus & Differentiation.
From these generic types we have seen many sub-forms of competitive strategies emerge, for example: market positioning, value chain, brand, unique design, patents, channel, technology and leadership. There is a great deal of academic argument about the various terminologies of strategy and what does and doesn’t constitute what type. For those of us in business the acid test of our strategies are whether or not they work in our chosen markets. Whether they allow us to attract our target customers and win their business against our competitors with sufficient frequency, reliability and longevity that we can achieve our objectives.
Boosting the Competitiveness of Business Strategies
List all the main objectives of the business across all its operational areas and then against each objective write down the strategies that are currently being applied to achieve them. If there are objectives and no strategy or strategy and no objective then there is a problem. Ideally this exercise will have revealed a cohesive set of strategies for each significant challenge set by the various objectives. It is a very worthwhile exercise to do and shows any gaps in your strategic planning. Then evaluate each individual strategy far more closely by asking seven questions.