Your customers are bombarded with choice. In any industry, there is a surplus of businesses, all competing and providing similar products and services, of similar quality, at similar prices, to the same market.
To stay relevant, competitive and continue growing your business, it is essential to have a strong and clearly defined business strategy in place.
A good strategy will shine a light on what makes you different from your competitors to the delight of your customers, staff, suppliers and business partners.
Developing your strategy can be a challenging process it requires a robust process, analysis, insight, foresight and objectivity.
It is about making choices. You need to make difficult decisions about your business and the direction you want it to go in.
You need to know your market deeply, how you differentiate and add value, understand your capabilities and then be willing to make the changes you need to make to stay relevant which is why we recommend you engage an experienced external facilitator to guide the process.
To get your started we recommend you read the book Playing to Win: How Strategy Really Works: Lafley and Martin which identifies five key questions that need to be answered to develop your strategy as follows:
1. What is your winning aspiration?
Devising a winning aspiration will provide strong and clear direction for you and your team. This question really urges you to explore what success looks like for your business. What is it you really want to accomplish? Describe the ideal outcome from your efforts in say 5 or 10 years time. Do you seek, local, national and or international market penetration? Do you seek to be a global player or a boutique niche business? How will your customers describe your success -as perhaps the greatest innovator, or offering the best value? How many offices will you have and where? How will your staff describe the culture?
This question crystallises the potential that you see for your organisation and in so doing identifies the gap between where you are now and where you want to be.
2. Where will you play?
After you have set your winning aspiration, you need to pinpoint exactly which playing field and in which position you want to play. Where do you want to be distinctive, compared to your competitors and with what set of customers? Define your specific target market; what demographic, what geographic area do you want to play and focus your resources on. Do wish to offer a premium, mid-range or low-cost product or service. Your choice will have implications for resources required, likely volume, competitive dynamics and your likely return on investment. These choices can be unique to your organisation.
3. How will you win?
Where the rubber hits the road. This question identifies how you will organise to deliver your products or service positioning in the chosen way to reach the target audience. It requires you to be clear in the value propositions you offer clients, how they differentiate you and how you will ensure customer satisfaction. Questions to answer include, will you send direct to end-users, or via channels, will you price per unit, bundle pricing or offer a subscription model for example?
4. What capabilities must you have in place to win?
When you consider a new strategy this often requires the need to develop new capabilities – whether that is in production, service delivery, innovation, marketing or data analytics for example. In addition, you need to decide how to access those capabilities whether to hire in, engage a consultant or to establish an Advisory Board.
5. What management systems are required to support your choices?
What information do you need that if you had it would make the implementation of your strategy effective? How can you get that information? Is it competitive intelligence, data analytics, customer journey mapping, focus group feedback? With a new strategy there is often a need for new information to make better decision making.
Answering these questions gives you focus on how to marshal your resources. Of course you’ll need a plan to execute your strategy and you need a culture in the organisation that will embrace no hinder the new direction. More about that in future articles
Anthony Moss is CEO Lead Your Industry Pty Ltd. Visit www.leadyourindustry.com
