Business Strategy principles
Strategies are concerned with the scope of a business’ activities i.e. what and where they produce. For example, BIC’s scope is focused on three main product areas – lighters, pens, and razors, and they have developed superfactories in key geographical locations to produce these items.
Two main categories of strategies can be identified:
1. Generic (general) strategies – The main types are Growth and Internationalisation/globalisation
2. Competitive strategies -Doing things better than rivals
7 BUSINESS STRATEGY PRINCIPLES EVERY LEADER SHOULD KNOW
1. Business Strategy = compete to be unique, not to be the best
Strategy is not about being the best, but about being unique. Competing to be the best in business is one of the major misconceptions about strategy.
2. Business Strategy = compete for profit
Business is not about having the largest market share or about growing fast. It’s about making money.
3. Know your industry before you develop your business strategy
A company is not an island – it’s part of a larger ecosystem, an industry. Each industry has its own characteristics, its own structure. This structure and the relative position your company has within the industry determines profitability. Certain industries have a higher return than others.
4. Business Strategy = Choice
In my eyes, this is the most simple strategy definition. You need a clear choice of WHO you are going to serve and a clear choice of HOW you are going to serve those clients.
5. A good business strategy requires you to say NO often
If you have clearly defined what you go for – a clear value proposition for a specific client segment (who) and a set of distinct, unique activities in your value chain to offer the needs of this client group (what), you will find out that there are lots of things that you are not going to do.
6. A good business strategy requires you to keep moving
Having a good business strategy means that you have arrived. Competitors move, customers’ needs and behaviors change, technology evolves.
7. Scenario thinking is an important business strategy tool
You need to turn data into assumptions that will fuel your reflection process. The standard way to work with assumptions in a structured way is by scenario thinking – fix some parameters and let other vary.
Source : jeroen-de-flander.com , businesscasestudies.co.uk