What is Strategy?
Most business books say you must follow a strategy.
Few actually spell out what strategy is.
Strategy is simply the key success factors that mean you reach
or miss your goals.
To think of your strategy start with active verbs and statements
of urgency, for example: we must, it is essential that, we
have to, there must be….
The smartest author on strategy is Michael Porter of Harvard
University. Anything he writes is worth learning. Porter has
summarized strategy as a matter of choices. However –
and this is the main point – strategy isn’t
what you do. It’s what you don’t
do.
You can’t be all things to all people, so you have
to choose.
Porter says the essence of strategy is the position your
product or organization owns in the market. To position yourself
is to choose activities that are different from your rivals.
The three strategic positions are:
- Offering a variety of products or services to your target
customers. (one-stop shopping, for example).
- Serving all or most of the needs of a group of customers
or segment of the market. TravelCUTS is a world-class Canadian-based
travel company that dominates the student traveler market.
- Segmenting customers who are accessible in different
ways — focusing on a region or providing a service
on the Web. Porter mentions a successful US chain of small-town
movie theatres. The company avoids head-to-head competition
with the big chains that compete in major markets.
Make your priorities clear
A successful strategy is only sustainable if your organization
makes trade-offs: more of one thing means less of another.
It is inefficient to refuse to trade off. By choosing to compete
one way and not another, you make your priorities clear.
A discount airline, for instance, needs to provide limited
passenger service (no meals or seat assignments), with a high
utilization of aircraft, highly productive ramp crews, and
frequent, reliable departures on short routes from secondary
airports. The airline’s procurement, training, maintenance,
and other marketing functions all must fit together to support
the strategy.
Lock out your competitors
With a strategic position and strategy, a company or any
organization can focus on combining activities that
support the strategy. Fitting all your firm’s or organization’s
activities together defends your strategic position in the
marketplace and locks out your competitors.
As you grow, strategy becomes more important because bigger
investments are at stake and compete for attention. If you
don’t have a strategy, as the futurist Alvin Toffler
said, you become part of someone else’s strategy.
To find out more about our strategy services, call Marc Zwelling
at 416.733.2320. |
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