Businesses usually do not develop strategies out of the blue, because they don’t see it as a necessity.
Yet, they have certain products or services; either they produce and/or sell them, or as a commercial enterprise they bring what someone else produces to the market; they mainly use the most known direct ‘sales’ method.
If conditions develop favorably and sales increase; they hire new employees, expand their offices, rent warehouses, and even build technological infrastructure to manage their operations. The goal is to sell even more.
However, triggered by a change in the environmental (such as economic, political, social, etc.) conditions, a demand shrinkage or crisis may occur, competition may catch up. Perhaps, other businesses that have more advantageous prices with even more quality products may arise. Even customers may prefer other companies’ products. In short, business may not always turn out as desired!
Every organization must re-visit and improve its business from time to time, may well be every now and then or with baby steps. Otherwise, it may become impossible for the organization to survive. What can be the business improvement areas? It can be; improving the product quality, hiring more competent staff, using the benefits of technology in business, close financial monitoring, improving the operation, increasing the capacity, creating a website, etc. Such attempts are known as ‘progressive strategies’.
If the organization’s efforts are not sufficient to deliver the product or service that would satisfy its customers through an affordable price or media, with better features or quality, then the competitors would certainly exploit the situation. The progressive strategies will remain quite limited. The decline in sales graphics, the increasing costs, collection problems, being unable to carry through loan debts, etc. month after month, along with the concerned employees, there are only two options for the managers:
- Withdraw, downsize, get out of the game, and maybe vanish; or
- Shake up, stand up/raise and start the change. Start listening, start hearing the voices, reading the signals and start caring (a fault confessed is half redressed, it is never too late to mend).
The need for change requires development of ‘robust strategies’.
Self-criticism starts with questioning and seeking ways to improve. Questions such as ‘What am I going to do, or maybe what will I not do; how will I do, for whom, with whom, when, where will I do it?’ triggers the search for powerful answers. Essentially, this is the process of enlightenment that we start to open our minds and learn. While fighting for our lives, we develop ‘transformative strategies’ rather than progressive strategies.
Effective ‘transformative strategies’ are nurtured by observation, knowledge and right interpretation skills.
We set to work by following the government policies, the market regulations, inflation, interest rates, exchange rates, social trends, technological environment, etc. Then, we should question: ‘Yes, I have a product, but does the customer want/need it? What is the price that he/she is willing to pay, where does he/she prefer to buy it from?’
We should try to find answers for questions like ‘So, what do our competitors offer? What do they do better? Where can opportunities become available for us?’ It is possible to look for channels and business partners where the products can be easily supplied for the customers. Right after that, from management to operations, it is good to discuss our competencies, assets and our values.
After depicting the picture, rest of the job lies with the ability to make the most accurate assumptions, to generate options and to make the most effective choices that will lead us to our goal. From now on we should be able to find the answers to ‘What can we do differently? Or how can we improve the current situation?’
Just beware that our strategies will vary depending on whether our goal is ‘to take a share of the growing pie, to hold on to the newly entered market, to retain market share or to maintain profitability?’
Written by Chinese commander Sun Tzu and considered one of the major military strategy studies in ‘Art of War’ says: ‘The best way to bring the enemy to its knees is by military action; a little better is to disrupt the enemy’s alliances with strategy; the best way is to counteract the strategy of the enemy. The best of the commanders is not that they won dozens of battles, but never have to fight to win. ”
Creating a strategic direction and roadmap is a multidimensional and profound subject.
Release: SME-EFOR September 2011