Strategy 101

October 18, 2006

If Strategy is all about how to best allocate resources, then how is it best developed? Think about strategy as how to compete and where to compete. In order to answer these questions, 4 critical areas need to be investigated: Your Company’s strengths and weaknesses, your competitors strengths and weaknesses, your customers needs, and any outside influence groups.

Your greatest opportunities lie in the region where you are strongest, your competition is weakest, there is a significant unmet and intense need on the part of your customer base, and any outside influence groups perceive the same unmet need. Now for the hard part. Objectively evaluating all of the above is no easy task. First, of course, determining your own Company’s strengths and weaknesses is a challenge unto itself. Everything should be examined including assets, skill sets, staff, expertise, capital, etc. It’s not good enough to say “we are good at making widgets.” Questions should go to the core of the business such as: Are we the low cost producer? Can we maintain that advantage? Are we innovative? How? Do we have underutilized manufacturing assets? Can those assets be deployed in other ways? How good are we as marketeers? Are we better at transportation and distribution? What about our relationships with our customers? Are we good at selling? As you can see, all stones need to be turned over and an objective list of strengths and weaknesses needs to be created.

The same exercise needs to be done for each key competitor. While some information may be in the public domain, the use of an outsider is often times necessary to objectively complete this step. Remember, the key is objectivity…

Customer needs then should be assessed. Are you currently filling the most important needs of your customers? Are there any unmet needs which you could uniquely fill? This clearly plays into your strengths and weakness analysis for both your Company and your competitors. But, in order to gain competitive advantage in an area of significant opportunity, these analytics must be undertaken.

Finally, the role of outside influence must be taken into account. If you are in the pharmaceutical business, who is your “customer?” The consumer or the doctor? If you market an RX product directly to consumers, you must take into account the doctor. So, with this view, the doctor becomes the outside influence.

So, that is the basics of strategy development. I hope it helps bring some clarity to the subject and I welcome your opinions.

Rich

Bizvice:  Strategy, Marketing & Entrepreneurship

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