Devise a REAL Business Strategy

Most so-called “business strategies” are in reality just audacious goals and ambitious growth targets, bundled with a ‘vision of the future’, then packaged as a ‘business strategy’.
Sadly, this is true for many design, media and technology companies.

A REAL business strategy is different.

A real business strategy is a clever solution to a particular challenge or problem. A creative maneouvre. The problem must be understood in order to overcome it. Then an intelligent or creative response is identified. Then specific actions are implemented, which deliver the response and support one another.

Real business strategies embrace thorny issues that false strategies (non-strategies) choose to avoid. For example:

– A real business strategy often means a reallocation of resources from one area to another, doing more in one arena and consequently deciding what NOT to do in another, in order to release resources. The difficult choice to stop doing a current activity, that leads to real strategic focus, is often dodged in non-strategies.

– Very often, the problem identified is about competition. Too often, non-strategies fail to take competition into account, as if the business has the market all to itself. Moreover, competition in a wider sense also includes new entrants, substitute products, powerful suppliers, and powerful customers – the five forces of competition.

– Strategy generally involves deploying a relative strength – a competitive advantage – in an area of greatest impact. This means it’s crucial to identify your competitive advantage and choose customers strategically, two key elements of a successful ‘Business Formula‘.

A useful framework or ‘business strategy tool’ to help formulate a real business strategy is as follows:

Business Strategy Framework

This simple framework helps to devise a real business strategy by dealing with the most important elements at the heart of a business strategy:
1. Analysis. What’s the specific challenge?
2. Strategic Solution. What’s the new policy and direction?
3. Coherent Actions. What specifically will we do?
4. Monitoring and Revision. Is it working? What new challenges have arisen?

1. Analysis. What’s the specific challenge?
* Supply/Demand ratio in our industry
* Competitor analysis. Chart the competition.
* Relative strength of competitors. Who is stronger than us? In what way? Why?
* Forces of Competition (New entrants, substitute products, bargaining power of suppliers, bargaining power of customers, as well as rivals.)
* Limitations of our business
* What’s changing in our industry?

2. Strategic Solution. What’s the new policy and direction?
* Identify relative weaknesses of rivals
* Find market niches we can dominate
* Spot new opportunities due to industry changes
* Deploy our characteristics so that they become strengths in relation to the competition
* Reallocate resources to support the strategic solution (ie away from
non-strategic areas)

3. Coherent Actions. What specifically will we do?
* Identify and plan actions (specific, measurable, achievable, realistic and timetabled)
* Design combinations of actions to achieve overlaps, efficiencies and synergies
* Note actions/initiatives that could be tempting but are not part of a coherent, synergistic plan of action and so should NOT be done.

4. Monitoring and Revision. Is it working?
* How do we know the strategy is working? How will we measure progress? When?
* Be prepared to review and amend the business strategy in response to external developments. It’s a dynamic process. Strategic planning is not an annual event; it needs to be done in response to challenges as and when they arise.


Advice for your company

Contact David Parrish for professional business strategy advice for your media, design or technology company.


Read this book

One of the best books I’ve ever read on the subject of business strategy is ‘Good Strategy/Bad Strategy: The difference and why it matters’ by Richard Rumelt. An excellent read for any enterprise that wants to succeed by using a real business strategy. I recommend that creative entrepreneurs read it, especially those in media, design and technology businesses in the creative industries worldwide.

“Good strategy is not just “what” you are trying to do. It is also “why” and “how” you are doing it.”
– Richard Rumelt. Good Strategy, Bad Strategy

“At the core, strategy is about focus, and most complex organizations don’t focus their resources. Instead, they pursue multiple goals at once, not concentrating enough resources to achieve a breakthrough in any of them.”
– Richard Rumelt. Good Strategy Bad Strategy

 

 

 

 

 

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,