6 Things You Should Consider Regarding International Tactics Exposures

All organisations and their staff need to understand their purpose, their destination and the course they’re taking to get there. A company without a strategy is akin to sending your staff into the desert and leaving them to follow mirages in search of water.
An isolating mechanism inhibits competitors from duplicating your product or the resources underlying your competitive advantage. If you can create new isolating mechanisms, or strengthen existing ones, you can increase the value of the business. This increased value will flow from lessened imitative competition and a consequent slower erosion of your resource values.
Entropy is a great boon to management and strategy consultants. Despite all the high-level concepts consultants advertise, the bread and butter of every consultant’s business is undoing entropy — cleaning up the debris and weeds that grow in every organizational garden.
Business strategy can be understood as the course of action or set of decisions which assist the entrepreneurs in achieving specific business objectives. It is nothing but a master plan that the management of a company implements to secure a competitive position in the market, carry on its operations, please customers and achieve the desired ends of the business.

Managing Up And Across

How is your company structured? Are decisions centralized or are they mostly decentralized to business units and subsidiaries? Do you have operations scattered around the globe or are you grouped in one location, with everyone under the same roof—from production to sales and marketing?
Strategic planning is something you cannot do by yourself. It’s like dentistry or medical work or the law. You have to get someone who is objective, who has knowledge and exposure to different industries, and who has studied in and is experienced in strategic planning.
If you’re unsure how your products will respond to different markets or just want to test it out, following the export model is a safe option. However, an international strategy does have its drawbacks, which is why many companies use an international strategy to start with before moving to one of the other three strategies. We’ll explain more below.
For decisions to be formulated accurately and implemented effectively, people must have the freedom to act and to be able to exploit their potential. This requires the removal of unnecessary bureaucratic or procedural constraints, giving people clear (and possibly expanding) areas of responsibility and authority.

Revenue Forecasts

Treating strategy like a problem in deduction assumes that anything worth knowing is already known—that only computation is required. Like computation, deduction applies a fixed set of logical rules to a fixed set of known facts. If everything worth knowing is already known, the problem of action reduces to crank winding.
One of the keys to focus and concentration is for you to have the foresight and courage to abandon certain products, services, and markets where you cannot achieve superiority. As Jack Welch famously said, “If you don’t have a competitive advantage, don’t compete.”
The presumption that all important knowledge is already known, or available through consultation with authorities, deadens innovation. It is this presumption that stifles change in traditional societies and blocks improvement in organizations and societies that come to believe that their way is the best way. To generate a strategy, one must put aside the comfort and security of pure deduction and launch into the murkier waters of induction, analogy, judgment, and insight.
The mutual accountability of your enterprise can help overcome the short-term orientation and unproductive internal competitiveness that pervades many organizations and prevents them from doing amazing things. Once people feel responsible for each other’s success, they are more likely to take the time to understand each other’s perspectives.

Unifying The Organization

If you don’t write down in advance what your logic was for your strategy, you will find that you will convince yourself that everything worked out the way you thought it would — and you will learn nothing. In strategy, you need to keep yourself honest.
Strategy is the path that takes your company to the ideal future. Strategic planning starts with knowing where you are now, envisioning your ideal future, then focusing on what needs to change in the present to create the future.
Always be open to the possibility that you could be doing the wrong thing. Your business model may be obsolete. What seemed like a good decision at one time, in one or more of these areas, is no longer a good decision today.
To build competitive advantage, an organisation must encourage challenges to accepted norms and engage in direct dialogue with customers and other stakeholders. It should not rely on assumptions that have little evidence to support them. Having a corporate culture that encourages or allows this is essential. In reversal theory terms, the rebellious motivational state, rather than the conforming state, needs to dominate.

The Driving Force

The problems you encounter in running your company are tough enough to solve. Don’t let confusion muddy the waters. This means keeping your analyses as objective as possible and admitting what you see to those around you. Don’t try to persuade yourself or others to see what isn’t there. You may be the only person, for example, who can tell whether a two-month downturn in revenues reflects your ordinary business cycle or the beginning of a more drastic trend. Therefore, you must gauge the truth and act accordingly.
The process of strategic analysis is one of focusing down ‘layer by layer’ to develop a clear understanding of the factors which effect the corporate and the market in which it operates. It may therefore be referred to as the ‘onion skin’ approach, as illustrated below. Each layer must in turn be ‘peeled off’ and analyzed before the core Strategic Business Unit (SBU) element is approached.
Whatever you choose to do, you are simultaneously choosing not to do anything else at that moment, or with that same amount of money. Sometimes, what you choose not to do is absolutely essential so that you are able to concentrate your powers where the greatest success is possible.
A strategy is, like a scientific hypothesis, an educated prediction of how the world works. The ultimate worth of a strategy is determined by its success, not its acceptability to a council of philosophers or a board of editors.

Sources Of Innovation

A good strategy contains a diagnosis that defines or explains the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as critical. It also contains a guiding policy for dealing with the challenge. This is an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
There’s nothing wrong with having a quarterly target; cash is the oxygen of a growth business, and it needs to be managed very carefully. But leaders, especially those who are still learning to navigate their market, must have a deep, unwavering focus on how they will win over the long run. Doing anything else is like driving across the country while looking only five feet in front of your car.
Business-Level Strategy theory states that there are essentially three strategies you as an organization can use to win in the marketplace: cost leadership, focus, or differentiation. Which one you choose with depend on market conditions and your unique set of core competencies.
The SWOT Analysis works well because it contrasts the internal and external factors that affect a company. It matches the strengths found in the company’s internal environment with opportunities in the organization’s external environment in a way that makes its core competencies self-evident. Scanning the internal environment includes an analysis of the company’s structure, its culture, and its resources.

Look Across Time

It used to be that the strategy for growing operations went in only one direction: scaling up. Scaling up was the best way to get the most productivity and to reduce unit costs. Bigger was better. Ten 100-ton dump trucks using ten drivers carry the same amount of load as 100 ten-ton dump trucks requiring 100 drivers! So scale up to those 100-ton dump trucks as soon as you can.
A business strategy typically comes second to an organisation’s corporate strategy. The corporate strategy looks at the bigger picture – the market a business is operating in, new markets that may be profitable to enter, and how best to ensure company growth.
It is important to distinguish between value innovation as opposed to technology innovation and market pioneering. What separates winners from losers is neither bleeding-edge technology nor “timing for market entry.” Sometimes these exist; more often, however, they do not.
A competitive advantage becomes more valuable when the number of buyers grows and/or when the quantity demanded by each buyer increases. Technically, it is the scarce resources underlying the advantage that increase in value.

The Centralization Decision

Organizational inertia generally falls into one of three categories: the inertia of routine, cultural inertia, and inertia by proxy. Each has different implications for those who wish to reduce inertia or those who seek to gain by attacking a less-responsive rival.
If you have a business strategy in place you will be clear on where your business is now, where it is going and what you need to do to get there. This will give your business clarity, focus and direction as you can align the business to achieving the business strategy. You will be making your business strategy happen rather than letting your business drift along without purpose.
Execution can be built into strategy formulation. This recognizes and pays respect to the importance of aligning people’s minds and hearts with a new strategy so that at the level of the individual, people embrace it of their own accord and willingly go beyond compulsory execution to voluntary cooperation in carrying it out.
When a company’s value curve lacks focus, its cost structure will tend to be high and its business model complex in implementation and execution. When it lacks divergence, a company’s strategy is a me-too, with no reason to stand apart in the marketplace. When it lacks a compelling tagline that speaks to buyers, it is likely to be internally driven or a classic example of innovation for innovation’s sake with no great commercial potential and no natural take-off capability.

Thinking Strategically

An Integrated Cost Leadership/Differentiation Strategy involves producing low-cost products with differentiated features. This strategy is about simultaneously focusing on two drivers of competitive advantage: cost and differentiation. This type of strategy is often called a hybrid strategy.
It is often said that in many organisations, too much attention is paid to norms, rules, procedures and precedents and not enough to creative thinking. However, many of the problems that organisations face today cannot be solved without a creative approach.
Business-level strategy looks at how to win within a market, and corporate level strategy looks at what markets you should be in. For example, you might be in the vitamin niche. Your corporate-level strategies will determine what niches within the vitamin market you’ll compete in, for example, cod liver oil, muscle growth, etc. Your business-level strategy will determine how you intend to win in each of these markets.
Distinctive capabilities are expensive. They involve significant fixed costs and enormous managerial attention. To unlock the potential value from your investment in them, you must focus on only a few, and instill them throughout your enterprise, everywhere you do business.

Determine Your Purpose

Without proper controls, financial management and in particular the management of risk remain uncertain, flawed activities. Control is necessary not only to avoid cheating or fraud, but also to test that the best decisions are made and that the most effective tactics are employed.
In business, the strategy of the offensive requires that you continually bring out newer, better, faster, cheaper, and easier-to-use products and services. You introduce new technologies and new methods of marketing and selling. You continually change your pricing strategies and your cost structures. You form joint ventures and strategic alliances with other companies and organizations that can give you entry into different markets and enable you to outcompete your competitors.
A company needs a vision statement that everyone from the CEO to the receptionist can understand. It formulates what an organization wants to be and stimulates specific goals that can be passed down to every department in the organization. It needs to be something useful and applicable to daily operations. You—and, more importantly, your coworkers—should feel comfortable using your vision statement in everyday conversation.
Every business needs a safety net of protocol to help them make those tough decisions. What a documented strategy can do is give your business the extra support and guidance it needs if put to test.

Comments

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