Strategy of the Fittest
By Dr. Hussein Ismail - July 1, 2011
I am always asked this question: What is the best strategy to gain market share? Unfortunately, there is no magic recipe. Good strategies cannot be bought off the shelf and they cannot be perfectly imitated. We have seen so many examples in which competitors imitate a leading competitor’s strategy only to realize after five years that it failed. A successful strategy is a product of analysis, research and productive resources. But first, let us remind ourselves of what strategy is.
A strategy is simply the means of how you are going to reach your goal. Let’s say that you have a goal of increasing your beverage sales by 18% after three years. How will you achieve this? A strategy helps in formalizing the means and ways to reach your target smartly. In this example, it might be through organizational restructuring, which focuses on closing down one of your manufacturing plants in California and reinvesting that money into several new selling booths in hot areas throughout the city, enabling you to reach out to more customers. That’s one way. The confusing part is that there are so many ways to reach your goal; which is the right one? Let’s not forget that strategies are expensive. Lots of resources may be needed, so investing in the wrong strategy may lead to disastrous consequences.
Although I mentioned that there is no magic recipe for choosing the right strategy, there is, however, a foolproof method to ensure (to some extent) that you are on the right track. Below, I offer some very useful and smart ways that can be followed for this purpose.
Research and analysis. Relying on luck alone, or simply doing it because others have done it is highly risky and it is very probable that failure will be the outcome. Good research of the environment in which your company is operating in is necessary before implementing any new strategy in order to judge the costs and benefits of the strategy, and the extent that the latter outweighs the former. First, we begin with the general questions. Who are your main competitors in the beverage industry? What resources do they have? Who are their allies? Who are their main suppliers? Do they have international links? Are they upgrading their technologies? Who is the target audience? What do their customers say about them? These are just few of the general questions that have answers that are not difficult to research, yet will provide big help to us for all current and future strategies. Ideally these questions will assist in knowing our competitors’ strengths and weaknesses in the industry. After the general questions, we have to research and analyze information related to our specific strategy mentioned above. What level and amount of resources will this strategy employ? Is it feasible, and what is the return expected? How will my competitors react to this new strategy? What is the rate of speed of their reaction to the strategy? Will their reaction be aggressive or mild? For how long can I remain in the market before my competitors imitate me? How can I defend myself? More questions like this require creativity, and are best done in group meetings. The answers to these questions should be researched and documented. After all the research and analysis, can we judge accurately that the benefits are greater than the costs? If the answer is yes, then take the next step.
Implementation and follow up. In this stage, I should make sure that the planned resources for this strategy are on standby and ready to be deployed. This stage is very critical as no matter how attractive our espoused strategy is any shortcoming during the implementation stage may be very damaging to the whole process. A formal plan for all resources, from A to Z, should be in place to ensure smooth deployment. Very importantly, leadership and employee motivation are very necessary at this phase for the success of the strategy. Workers who do not have a clear idea of the strategy, and are not motivated or enthusiastic about the strategy may eventually lead to implementation problems along the way.
Follow up is also a central step during and after the implementation of the strategy. Any changes in the environment will require correction and adjustment and therefore contingency plans/backup should be planned before hand in order to quickly adjust any errors without any delay.
Originally, the word strategy in business is borrowed from the battle field. Commanders formulated strategies and gave clear instructions to their armies to execute the strategies. Some strategies have won battles, while others have failed. History is full of example on wins and losses in battles, and the same for businesses. We are just happy though that in the business world there are no bloody war battles!
By Dr. Hussein Ismail - July 1, 2011
I am always asked this question: What is the best strategy to gain market share? Unfortunately, there is no magic recipe. Good strategies cannot be bought off the shelf and they cannot be perfectly imitated. We have seen so many examples in which competitors imitate a leading competitor’s strategy only to realize after five years that it failed. A successful strategy is a product of analysis, research and productive resources. But first, let us remind ourselves of what strategy is.
A strategy is simply the means of how you are going to reach your goal. Let’s say that you have a goal of increasing your beverage sales by 18% after three years. How will you achieve this? A strategy helps in formalizing the means and ways to reach your target smartly. In this example, it might be through organizational restructuring, which focuses on closing down one of your manufacturing plants in California and reinvesting that money into several new selling booths in hot areas throughout the city, enabling you to reach out to more customers. That’s one way. The confusing part is that there are so many ways to reach your goal; which is the right one? Let’s not forget that strategies are expensive. Lots of resources may be needed, so investing in the wrong strategy may lead to disastrous consequences.
Although I mentioned that there is no magic recipe for choosing the right strategy, there is, however, a foolproof method to ensure (to some extent) that you are on the right track. Below, I offer some very useful and smart ways that can be followed for this purpose.
Research and analysis. Relying on luck alone, or simply doing it because others have done it is highly risky and it is very probable that failure will be the outcome. Good research of the environment in which your company is operating in is necessary before implementing any new strategy in order to judge the costs and benefits of the strategy, and the extent that the latter outweighs the former. First, we begin with the general questions. Who are your main competitors in the beverage industry? What resources do they have? Who are their allies? Who are their main suppliers? Do they have international links? Are they upgrading their technologies? Who is the target audience? What do their customers say about them? These are just few of the general questions that have answers that are not difficult to research, yet will provide big help to us for all current and future strategies. Ideally these questions will assist in knowing our competitors’ strengths and weaknesses in the industry. After the general questions, we have to research and analyze information related to our specific strategy mentioned above. What level and amount of resources will this strategy employ? Is it feasible, and what is the return expected? How will my competitors react to this new strategy? What is the rate of speed of their reaction to the strategy? Will their reaction be aggressive or mild? For how long can I remain in the market before my competitors imitate me? How can I defend myself? More questions like this require creativity, and are best done in group meetings. The answers to these questions should be researched and documented. After all the research and analysis, can we judge accurately that the benefits are greater than the costs? If the answer is yes, then take the next step.
Implementation and follow up. In this stage, I should make sure that the planned resources for this strategy are on standby and ready to be deployed. This stage is very critical as no matter how attractive our espoused strategy is any shortcoming during the implementation stage may be very damaging to the whole process. A formal plan for all resources, from A to Z, should be in place to ensure smooth deployment. Very importantly, leadership and employee motivation are very necessary at this phase for the success of the strategy. Workers who do not have a clear idea of the strategy, and are not motivated or enthusiastic about the strategy may eventually lead to implementation problems along the way.
Follow up is also a central step during and after the implementation of the strategy. Any changes in the environment will require correction and adjustment and therefore contingency plans/backup should be planned before hand in order to quickly adjust any errors without any delay.
Originally, the word strategy in business is borrowed from the battle field. Commanders formulated strategies and gave clear instructions to their armies to execute the strategies. Some strategies have won battles, while others have failed. History is full of example on wins and losses in battles, and the same for businesses. We are just happy though that in the business world there are no bloody war battles!