Making Sense of Strategy

Focus is a decision that may be made by a few people in your organization and holding your course is a leadership matter. But driving value up and costs down depends on everyone.

Winning and keeping customers depends 100 per cent on them. Whatever you sell, and whomever you sell it to, you have to do these three things or you won’t survive:
1. Focus your resources where you’ll get the most from them.
2. Continually drive up your customer’s perception of value.
3. Simultaneously drive down the cost of doing it.

A brand is not something you can get your hands around. Rather, it’s the bundle of perceptions and feelings customers hold for a product, service, or company – or all three as a whole.

If you don’t make a difference, you don’t matter!

we shall see, you should obviously strive for win-win relationships with all your stakeholders. But you will be faced with trade-offs. When that happens, remember that no business can be run as a social club (at least, not for long) and that the long-term survival of your organization is your first responsibility.
The fashionable notion that all stakeholders rank equally is not grounded in reality. Firms that balance the demands of shareholders, customers, and their own people tend to outperform others. But let’s be clear: the reason to care for customers is because they’re the source of economic profit – the indicator that investors care most about. The reason to care for employees is that they produce products and services and drive sales. Both groups, in other words, serve the investor.

The real questions are, “What is our growth ambition?” “How fast should we grow?” “How will we do it?”
Your growth trajectory will vary, depending on circumstances. Sometimes, it makes sense to “go for it” with a vengeance, to spend freely on market share through new product launches, price cuts, promotions, or distribution improvements; or through acquisitions or alliances. At other times, you need to slow down, get your house in order, and wait for the next opportunity. Always, though, your strategic conversation must focus on growth.

How? By getting the basics right. By having a “fingertip feel” for what’s happening in your business arena, creating an appropriate value proposition and business model, applying the First Principles of Business Competition,* and executing effectively.

So best you create the circumstances in which things are mostly likely to go your way.

strategic management is an ongoing process

quantum-leap approach ensures that you wind up having to change too much, too fast, and usually when it doesn’t suit you. When you defy reality, you make nonsense of strategy.