Be a Visionary
Strategic planning is vital to business success
Successful companies understand that business strategy and vision are closely linked with success. Having the correct business strategy helps enable an organization to achieve and sustain a high level of performance over time. Developing a business strategy is a core responsibility of senior management, and it involves a range of critical activities, from identifying core capabilities, completing a competitive analysis and conducting a risk/market forecast to clearly defining what success looks like for the organization into the future.
For companies to be viewed as competitive as opposed to comparative, senior management must make conscious decisions that will uniquely position their organization for success. The goal for the strategic planning process is to provide an organization with an opportunity to develop clarity with regards to their vision and business strategy. Strategic planning is a process that discovers and articulates a company’s vision, competitive advantage, target market and long-term strategic objectives.
Defining business strategy
Business strategy articulates the specific characteristics that set a business apart from other businesses within the same industry. A well-developed business strategy provides focus to an organization, enabling it to fully leverage and exploit its competitive advantage. Business strategy focuses on describing what makes your company unique (differentiators), who your ideal customers are and what your priority products and/or services should be. Ultimately, business strategy helps to create a specific market identity that provides your company with an advantage over your competition. Business strategy helps business leaders do the following:
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Find new and unique ways to provide and market a mature product/service to the marketplace.
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Find a new application for a mature products/service offering.
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Find a new product/service offering for your existing customer base.
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Find new ways to differentiate your company from the competition.
Strategic choices are the building blocks of business strategy. These choices represent different ways in which a business could differentiate itself from the competition. When developing business strategy, business leaders must look at their companies from different vantage points. They must identify their core capabilities, complete a competitive analysis, conduct a risk/market forecast and clarify their definition of success. Again, the goal is to select a business strategy that is competitive, as opposed to comparative, in the market in which you compete. As business leaders develop business strategy (strategic choices), they will investigate differing ways in which they can uniquely position their company.For instance, many business owners believe they have no opportunity to differentiate themselves as they are in a mature industry with plenty of competition. Being in a mature industry with plenty of competition implies narrowing margins and ultimately earnings compression for the organization.
Let’s look at some companies that have competed very effectively in a mature industry with plenty of competition. The restaurant business is a mature industry with plenty of competition. We can assume there are tremendous earnings compressions for those organizations that have not effectively carved out a niche for themselves. In a highly competitive industry, it would appear that both Pizza Hut and Taco Bell have been very effective at carving out a niche for themselves. How do they compete in a mature industry with plenty of competition?
They have defined themselves two ways. Both organizations are product innovators and exceptional marketers. These are two strategic choices they have deliberately made in an effort to differentiate themselves from the pack. Being product innovators implies they continually develop and introduce new product offerings to the marketplace to keep their customers interested and coming back for more. Being exceptional marketers implies they are excellent at communicating their message and getting the attention of both their existing and prospective clients. There are examples like this in every industry with both large and small companies.
If you are an organization in a mature industry, afflicted with plenty of competition and struggling with creating a unique position in the marketplace, then consider the value of going through the strategic planning process with the goal of identifying your organization’s uniqueness and leveraging that uniqueness in a way that produces greater earnings performance over time.