Business
Start
source by: businesstown.com
Fine-Tuning Strategy
"Strategy
isn't just a buzzword that MBAs at huge corporations use to sound intelligent!"
How
To "Steer" Your
Business
How important is strategy? Whether your business is a one-person start-up
or a huge corporation, a great strategy is crucial. It's like the steering
wheel on a ship. If the ship is in A- - -1 condition except for a broken
steering wheel, it's going to spin hopelessly in circles.
In my twelve different businesses, I've spun around in a lot of circles
for lack of a solid strategy. Why is it so hard? Strategy is not that
complicated! Basically it's just the few key factors that differentiate
your business from your competitors'.
But
it's easy to fall into traps. Many service business owners proclaim, "My
strategy is great service," while CEOs of product companies exclaim, "Our
strategy is to produce great products." However, these aren't strategies
at all-because their competitors are often making the same claims.
In What Direction Are You Headed?
If you're not quite sure where your business is headed these days-or
if you're not quite sure if you're taking the right course to get there
. . . what do you do? Don't procrastinate! Take action!
Try a complete strategic review. Get together with your key people for
a couple of days of undisturbed time-maybe even go off-site or hire a
facilitator. For starters, here's a few of the most basic issues every
company should discuss:
* Future Vision: What kind of company do we want to be five years out?
* Strengths: What aspects of our work do we do well?
* Weaknesses: What aspects don't we do well?
* Markets: What opportunities and challenges loom ahead in the markets
we serve?
* Strategic Options: What are our basic alternatives and their implications?
* Selection: Which strategy should we select?
* Implementation: What changes need to be made to implement the chosen
strategy?
Find Your Unique Strengths!
How do you determine what your strategy should be? How do you weigh strengths
and weaknesses? Fifteen years ago leading consulting firms were advising
their corporate clients to get rid of any business that couldn't become
the market leader. But the truth is that you don't need to be the market
leader to successfully compete. But you do need to find some area of
strength and some way to differentiate yourself from the competition.
Finding a true strategy-one that really differentiates your business
from the competition-may take some energy, but believe me-it'll be worth
it.
Here are a few possible strategy variables to consider:
* High quality versus low price
* Narrow versus broad product line
* High-tech versus low-tech products
* Trendy versus conservative products
* Brand-name versus generic
* Customized versus standard
* Niche market versus mainstream market
Have A Bumper Sticker Strategy!
Coming up with a great strategy is of course only half the challenge.
Getting all of your employees to "buy into" it is the other
half. You can't just announce to your staff what the strategy is going
to be-I've tried it-they'll forget it the next day. That's why it's
so important to get managers (or other key employees if you don't have
managers) involved in setting a new strategic course. Have them participate
in discussing their vision of the future. Have them create lists of
areas of company strengths and weaknesses. And most of all, carefully
consider their opinions in setting direction.
Another
thing that has worked for me is having what some call "a
bumper sticker strategy"-just a few words that capture the spirit
of the more detailed strategy plan. A simple "bumper sticker strategy" lets
everyone in the entire organization know what the strategy is-and it
makes them feel part of it.
Don't Copy Your Competitor's Strategy!
When I was nineteen years old, I decided to start a bicycle rental business
on Cape Cod, after I heard about a man earning $150,000 during the
summer season renting bicycles. I copied everything he was doing. I
bought fifty used bikes and lined up gas stations and motels to act
as my rental agents. Then I waited for my profits to roll in . . .
but no one was renting my bikes. The other guy's strategy didn't work
for me. He had new bikes. I had old ones. He had the best locations.
I had what was left.
In desperation I tried something different. I put to use my competitive
advantage-free use of my mother's station wagon-and offered free delivery
of bikes to campsites and motels. Now I had a strategy that differentiated
my business from the competition. It didn't matter that my bicycles were
old or what price I was charging. I was the only firm delivering bicycles.
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