Here's What Industry Insiders Say About Economic Strategy Disclosures
The strategic move, and not the company or the industry, is the right unit of analysis for explaining sustained high performance. A strategic move is the set of managerial actions and decisions involved in making a major market-creating business offering.
Tacit knowledge should be gathered selectively. You must consciously focus on the knowledge that makes you distinctive. When people are asked what they do at work or what others should learn from them, the first things they say are probably not the most important. You need to probe more deeply, to get past their ordinary perceptions, and to codify not just what people consciously recognize as their work knowledge, but what has been ingrained into unconscious habit.
Managing costs carefully moves you to a new level of financial discipline, redirecting your resources from the projects that distract you to the core capabilities that drive your profits. It brings new life to financial practices (for example, to your annual budgets). When times are good, you don’t dilute your investment dollars by making bets on dozens of new projects. Instead, you figure out the areas where you are most likely to succeed, and focus your investments there.
What are your most profitable products and services? What are they today? What could they be tomorrow? Who are your most important and valuable customers today? Who could be your best customers tomorrow, and how could you attract and keep more of them?
The Right Combination
The corporate level is the highest and most broad level of the business strategy. It is the business plan which sets the guidelines of what is to be achieved and how the business is expected to achieve it. It sets the mission, vision, and corporate objectives for everyone.
A design-type strategy is an adroit configuration of resources and actions that yields an advantage in a challenging situation. Given a set bundle of resources, the greater the competitive challenge, the greater the need for the clever, tight integration of resources and actions. Given a set level of challenge, higher-quality resources lessen the need for the tight integration of resources and actions.
Today, we live in a world where we have to specialize and do a few things exceptionally well. Your chosen area of specialization largely determines the future of your business. You can specialize in a product or service, a customer segment, or a market area. When you specialize in a product or service area, your specialization is easy to describe.
Strategic planning must focus individually on each SBU to define clearly targeted goals and actions. The approach to the development (or disposal) of each SBU is likely to be different, reflecting the specific nature of the customer relationship, the competitive environment and the key factors for successful development.
Principles Of Effective Strategy
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.
A number of pillars of business ortho-doxy are being eroded. Many attitudes and beliefs that were relevant thirty, ten or even only five years ago, are now less significant or of noconsequence. If business decisions are to be effective, workable and sound, they must be grounded in the present and the likely future.
Competition should not occupy the center of strategic thinking. Too many companies let competition drive their strategies. This focus on the competition puts the competition, not the customer, at the core of strategy. As a result, companies’ time and attention get focused on benchmarking rivals and responding to their strategic moves, rather than on understanding how to deliver a leap in value to buyers—which is not the same thing.
The principle of maneuver applied to business refers to innovation and creativity in finding better, faster, cheaper ways to serve customers, make sales, and achieve higher levels of profitability. To maintain this kind of flexibility in business, you must always be willing to stand back and question the status quo.
Getting The Right Work Done
To translate strategic priorities into everyday execution across a large and incoherent enterprise might seem daunting, but it doesn’t have to be. You can draw on multiple practices, some of which are familiar and some of which involve thinking and talking in new ways. As you turn distinctive cross-functional capabilities into habitual behavior across a global enterprise, you develop the kind of culture that fosters coherence and collective mastery.
In some industries, the basis of competition can remain unchanged for decades, and leaders who stick to their strategy through downturns as well as upturns and ignore surface noise do very well. It is precisely when long-held assumptions about an industry are challenged that strategic changes happen. And you will need to make those changes very quickly. Thinking about strategy as a long-term commitment can blind you to that need.
Cost leadership means you can still make a profit even after your competitors have competed away their profit. Cost leaders can absorb bigger cost increases before those costs need to be passed on. In a competitive market, powerful customers can force you to sell products at a lower and lower price. However, this can force your competitors to exit the market. If this happens, then your customers lose their buying power, and you end up in a monopoly position.
Employees are changing their attitudes to work, and the nature of loyalty and duty in society is changing. The impact on strategic decisions requires an understanding of the forces driving these trends and an acceptance of the responsibilities and priorities that emerge.
Reconstruct Market Boundaries
The most difficult thing about opportunity is recognizing it. The old adage about opportunity knocking once does apply in many cases, so we need to see it—and be able to act on it—when it comes. What are our greatest challenges in the changing environment of the industries we serve? How will new technologies help us? What will our customers need in the future that we can supply? What opportunities will open up globally?
Closing the gap between strategy and execution often involves telling new stories that are deliberately chosen to reinforce coherence: stories about the capabilities that make this company special, the reasons why we do the things we do, events that have challenged the enterprise, the things people did to meet those challenges, and the evolution of the company’s capabilities and attitudes.
Even when things are going well, you have to be absolutely dedicated to decreasing costs. It is not something you have to do when things are difficult, it is something you have to do all the time and everywhere. Also, it is easier to reduce costs relatively and improve margins when you have a growth strategy, because you gain maximum efficiency from fixed costs.
Some technological changes are happening so rapidly that most companies have not yet taken advantage of the opportunities they provide. Every company still has a great deal to learn through prototyping and experimentation. But when translating the strategic into the everyday, be careful not to experiment for its own sake. The most successful companies link their technologically driven interventions closely with their strategy.
Overcoming The Fear Of Risk
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.
Local responsiveness refers to how companies serve a specific market’s needs — essentially, how much do they change from market to market? This isn’t just about translating the website or mobile app into a different language, but about the entire customer experience, from payment processes to imagery and product choices or specifications.
If you asked your employees, “How do we create value for our customers?” would you get a clear answer? And would different people within your company hold the same view? This question — how do you create value? — is the most fundamental inquiry about strategy that anyone could ask. Instead, many people think strategy has to do with choosing a direction: where are we going to grow next?
Clearly, the kinds of strategies that would work in the oil industry have practically no hope of working in the far less predictable and far less settled arena of internet software. And the skill sets that oil and software strategists need are worlds apart as well, because they operate on different time scales, use different tools, and have very different relationships with the people on the front lines who implement their plans.
Overcome Key Organizational Hurdles
The structure of the industry will significantly effect the profit potential of the business operating in that industry. The strategy and actions of a business operating in the industry may improve or destroy the industry structure. Each business (and the relevant decision takers) must recognize and evaluate the impact, short term and long term, of actions taken on the overall industry structure and attractiveness.
A good mission statement contains both a method and a measure. Just as a mission is something that can be accomplished, you must have clear measures and standards that you can use to determine how close you are to achieving your mission.
A defensive business strategy, meanwhile, protects an organisation from its competitors. It aims to inspire customer loyalty and safeguard its market share, and will use tactics such as incentives, exclusive products – or exclusive arrangements with suppliers or partners – as well as above-average customer service, to entice and retain customers and maintain its competitive position.
By thinking and acting strategically, you will increase your profitability and the level of satisfaction that you get from your company and your career. You will increase your overall levels of quality and market penetration. More than anything else, you’ll have a tremendous feeling of being in control of your personal and business destiny. You will be able to look back every year or two and say, “This is exactly where we wanted to be.”
Conceiving New Market Space
You must be willing to accept more uncertainty as you continually recalibrate your organization’s vision for the future. A company’s vision cannot include every detail, because there are still many unknowns. Leaders can articulate a strong vision for 10 to 15 years in the future while being open to iterating on the strategy and tactics categories as they encounter new tech trends, global events, social changes, and economic shifts.
A mission statement is often referred to as your “umbrella statement.” It is the organizing principle under which everything in the company is done. The mission statement tells people what the company does, and also what the company does not do.
One of the unfortunate consequences of successful management is that it often leads to imitation or entry into the market by other firms. Of course, entry by competitors adversely affects the profits of existing firms. Faced with the threat of entry, a leader might consider a strategy like limit pricing. Limit pricing changes the business environment by reducing the number of competitors.
What markets are you going to enter? How are you going to penetrate these markets? Are you going after geographic markets, horizontal markets, or vertical markets? Who are your competitors in these markets? How do you need to advertise, promote, sell, and otherwise penetrate these markets?
Adding New Value
How well does your business strategy support the fulfillment of your company’s purpose? Purpose is what the business is trying to achieve. Strategy is how the business will achieve it. Purpose is enduring — it is the north star toward which the company should point. Strategy involves choices about what products and services to offer, which markets to serve, and how the company should best set itself apart from rivals for competitive advantage.
When a leader characterizes the challenge the business faces as underperformance, it sets the stage for poor strategy. Underperformance is a result. The true challenges are the reasons for the underperformance. Unless leadership offers a theory of why things haven’t worked in the past, or why the challenge is difficult, it is hard to generate good strategy.
Competition-based strategies will continue to dominate companies’ strategic agendas even as the business imperative for creating value added strategies takes on new urgency. Perhaps this explains why, despite prior calls for companies to go beyond existing industry space, companies have yet to act seriously on these recommendations.
One important priority in business strategy formulation is to identify significant risks within and outside the organisation and allow these to inform decisions. This makes it easier to avoid unnecessary surprises. Examples of significant risks might be the loss of a major customer, the failure of a principal supplier or the appearance of a significant competitor.
Build Purpose And Creativity Into Your Strategy
Resources and internal capabilities can be a constraint on your choice of strategy, especially if you are start-up with few employees and fixed-assets. A strategy can succeed only if it has the backing of the right set of people and other resources.
Business-Level Strategies are a mechanism for a business to achieve a competitive advantage. According to the Business-Level Strategies theory, there are two types of competitive advantage that an organization must choose between: Cost Leadership (ensuring you cost less than your competitors) and Differentiation (ensuring you are different from your competitors).
A mission statement is qualitative, not quantitative. A mission statement is not to “Earn a lot of money” or “Increase profitability.” A mission statement is directed outward, toward what you want to do to help and improve the lives of your customers.
A business strategy streamlines your business and ensures every dollar and minute you spend on the business is in the direction of your sustained success. While strategy is can be difficult for many organisations to commence, its benefits are far-reaching and many. From creating new business opportunities, to streamlining the operations and engaging staff, a well-formulated strategy will enable increased growth, productivity and profit both now and into the future.
Comments
Jag tror att min inställning till människor har förändrats sedan jag läste den här bloggen.
A maioria das pessoas que são celebridades agora não fazem nada para merecer isso, então só por esse fato, eu não quero ser uma.
あなたのブログ投稿は、魂の中で火をつけて考案されていますが、臨床的なクールさで実行されています。
Esta tem sido a única voz calma e razoável em um vasto deserto de estridência e barulho.
Süper makale!
Šie emuāra ieraksti bija pārsteidzoši.
Excelent articol, prietene. Multe de gândit aici.
Jos uskot muihin ja annat heille positiivisen maineen ylläpidettäväksi, voit auttaa heitä tulemaan paremmaksi kuin he luulevat olevansa.
Acho que é a sua atitude mental que torna este blog tão bom.
Gribende at læse dette indhold.
Vaš blog je užitak! Mjesto za razmišljanje i dijalog. Našao sam te preko Googlea.
Veldig interessant og fantastisk artikkel. Takk for at du delte.
Den här bloggen är ett steg från det som är uppenbart och välkänt till det som är svårbegripligt och dolt.
अद्भुत पोस्ट, इस लेख को साझा करने के लिए धन्यवाद। मैं वास्तव में ब्लॉगिंग के लिए आपसे प्रेरित हूं।
Bu web sitesinde sahip olduğunuz ayrıntılardan etkilendim.
ทันทีที่คุณคิดว่าคุณเข้าใจโพสต์บนไซต์นี้ มันก็ตายแล้วสำหรับคุณ
Фантастическая тема!
I do my own thing. I think you should too. Keep up the good work.
Muž, který nečte dobré blogové příspěvky, není o nic lepší než muž, který to neumí.
Това, което ме дразни, е мекият начин, по който хората заобикалят тази тема. Вие не правите това. Благодаря ти.
Les personnes introverties ne s'inquiètent pas trop de savoir si elles seront jugées insuffisantes, elles trouvent simplement trop de socialisation épuisante et préféreraient être seules ou en compagnie de quelques personnes choisies.
Listen over film, jeg vil se nye såvel som gentagelser fra fortiden - bliver længere.
Olen yksin, jotkut ihmiset auttavat minua, mutta periaatteessa voin tehdä mitä haluan.
Δεν μπορώ να ικανοποιήσω τον εαυτό μου απλά διαβάζοντας τα ιστολόγιά σας - πρέπει να βουτήξω βαθιά για να τα ζήσω.
Ovo je stvarno koristan blog.
Sunt vulnerabil la critici. Oricine este.
Вие търсите съвършенство във всичко, но не можете да го постигнете в нищо.
Moje srce i duša su ti zauvijek dužni. Hvala što ste sjajni.
I'm not worried about the emotions I carry with me, because I'm happy that I have them I think it's good for the work I do. The emotions that are not healthy are the ones you hold inside.
Saker är verkligen vackra om du älskar dem.
Shvaćam da pisanje protesta nije baš u modi, ali već ste napisali mnogo ovakvih članaka. Prilično nepotrebno, ali zabavno.
मेरा यह मतलब अटके हुए तरीके से नहीं है, लेकिन मुझे इसे पढ़ने की जरूरत है।
Your experience must have been different, and I should appreciate hearing about it. Thanks.
Невероятна статия, сър. Благодаря за споделянето на това знание.
Tässä blogikirjoituksessa on jotain kivaa. En voi laittaa sormeani siihen.
很棒的文章。喜欢文字。
Esses posts do blog foram sensacionais.
Удивительно, сколько проблем вы можете получить, когда вам больше нечего делать.
Subiect fantastic!
Nastavite dijeliti dobre informacije.
惊人的帖子,感谢分享这篇文章。我真的被你写博客所激励。
See pole täppisteadus, see on kunst.
Ik denk dat het een serieus probleem is om je over dit soort onderwerpen af te vragen. Bedankt om dit onder onze aandacht te brengen.
आप जैसा लेखक वह है जो उन चीजों का निर्माण करता है जिनकी लोगों को आवश्यकता नहीं है।
最初は、自分がほとんどポインタであり、抜粋やリンクに短いリードインを提供していることに気づいていません。
Devi solo avere un senso di rispetto per l'argomento di cui stai scrivendo e lo fai. Ben fatto.
मेरे सहयोगियों को यह विषय दिखाया, इसने मुझे प्रेरित किया।
Více z tohoto článku prosím!
การทำงานที่ยอดเยี่ยม ฉันชื่นชมงานเขียนของคุณจริงๆ
Για να είμαι πραγματικά συγκεντρωμένος και να δουλεύω καλά και να σκέφτομαι τα είδη των πραγμάτων που πρέπει να σκέφτομαι, πρέπει να περνάω πολύ χρόνο μόνος.
Jeg tror folk føler seg truet av dette temaet. Problemet handler ikke om dette emnet i seg selv, problemet handler om holdningen til det.
Das Fehlen von Einschränkungen zu diesem Thema ist inspirierend. Vielen Dank!
Ez a blog fontos erőt ad az embernek az embernek.
În primul rând, simplu și simplu, nu ai idee reală despre ce înseamnă să fii așa decât dacă ești așa. Este o sabie cu două tăișuri.
Jsme stále s vámi a čekáme na vaše nové a zajímavé články.
ฉันต้องการให้บล็อกทำให้ฉันคิด การทำเช่นนี้อาจทำให้ฉันอารมณ์เสียหรือทำให้ฉันรู้สึกไม่สบายใจ ที่ส่งเสริมความตระหนักรู้และการเปลี่ยนแปลงหรืออย่างน้อยก็การอภิปรายบางส่วน
जब आप किसी की-बोर्ड को छूते हैं, तो यह किसी चलचित्र की चीज़ जैसा होता है, जादुई। साझा करने के लिए धन्यवाद।
Ada sesuatu yang menyenangkan tentang posting blog ini. Saya tidak bisa meletakkan jari saya di atasnya.
Mer om dette emnet takk!
素晴らしい投稿。ありがとうございました。
我从未感到如此投入生活。
संपादन एक अजीबोगरीब सिक्के की तरह है, लेकिन ऐसा लगता है कि आप इसे लटका चुके हैं। बहुत बढ़िया!
Takk for denne kunnskapen.
La meg være i fred, og gå på leting etter noen andre.
Obrigado por compartilhar informações úteis conosco. É realmente útil para nós.
Meil on see blogi selleks, et mitte tõe kätte surra.
Indipendentemente da quale possa essere il proprio atteggiamento nei confronti di questo argomento, ho trovato il modo in cui l'hai affrontato edificante.
Paradoks starenja je da se ne osjećam toliko prenagljeno kako imam manje vremena na zemlji.
Het is ongetwijfeld waar dat mensen over dit onderwerp over het algemeen het meest op hun gemak zijn bij anderen van hun eigen leeftijdsgroep.
Jsem subjektivní. A do té doby vám přátelé řeknou, že jsem tvrdý kritik, pravděpodobně příliš tvrdý.
Je moet stoppen met wat je doet en dit onderwerp lezen.
„Děkuji“ se nezdá dostačující, ale skutečně shrnuje, jak se cítím. Jsem tak vděčný za to, co jsi udělal.
Erinomaisuus on taidetta, joka voitetaan koulutuksella ja totuttelulla. Emme toimi oikein, koska meillä on hyvettä tai erinomaisuutta, vaan meillä on niitä, koska olemme toimineet oikein.
Worte sind machtlos, um meine Dankbarkeit für das auszudrücken, was Sie hier geschrieben haben.
Bloggen er virkelig informativ - bliv ved med at skrive.
Dat is geweldig. Veel dingen om te leren. Bedankt voor het delen.
Όταν χάνεις τα πάντα, παθαίνεις κατάθλιψη αν δεν κάνεις ένα βήμα πίσω και δεν αρχίσεις να εκτιμάς αυτό που έχεις.
Jag har skrivit om detta ämne också men du har gjort ett bättre jobb än mig!
Πραγματικά εκπλήσσετε την πραγματικότητα σε αυτό το άρθρο. Μπράβο.
I want you to know how much I value your support.
Не знам защо винаги съм бил толкова запленен от твоето писане.
I’m so grateful that you went out of your way to bring me the information I needed.
Artikkelen din gir så god informasjon med god kunnskap.
Jangan posting tinggi ketika Anda jauh dari rumah, dan posting tinggi ketika Anda sendirian.
Будьте верны себе, помогайте другим, делайте каждый день своим шедевром, превращайте дружбу в искусство, пейте до дна из хороших книг.
Tidak ada yang membuatku heran lagi.
Csodálatos bejegyzés, köszönöm, hogy megosztottad ezt a cikket. Nagyon motivált vagy a blogírásra.
Nélküled, akinek sokkal több időd van az olvasásra, mint nekem, reménytelenül lemaradnék a görbéről.
Dejligt indlæg. Tak fordi du postede sådan noget.
Ovaj članak pokazuje da ta vaša originalna razmišljanja ipak nisu nova.
这个内容令人兴奋。
Zulke blijdschap is voorbehouden aan ons, oudere mensen, voor wie waardering alleen beschikbaar is na jaren van oefening en herhaling.
Αν δεν σε προσέξουν, δεν έχεις τίποτα. Απλά πρέπει να σε προσέξουν και τα πας καλά με αυτό το blog.
Hvis der er noget bedre at gøre i dag, kan jeg gøre rent i morgen; snavset vil vente på mig.
Ces articles de blog étaient époustouflants.
Dobrý blog pro sdílení zkušeností a znalostí.
Vaš smisao za humor je bio osvježavajući u vremenu u kojem su osmijesi očajnički potrebni.
在我找到你的网站之前,我发现很少有网站谈论这个主题。
Jestli si někdo zaslouží poděkování, jsi to ty. Jsem vděčný za vaši pomoc.
Van szerepe és funkciója egy ilyen cikknek.
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