Success in strategy, not winging itQuestion: I own, along with some investors, a manufacturing business that has done well over the years and is doing $40 million a year. However, we seem to have a lot of ups and downs in various tries to increase our market share. while still doing well in net profit, we have had more product-introduction failures lately. do you know any good way to increase our success rate that doesn't involve a lot of additional expense?
Answer: A quick way to court disaster is to run a company by instinct or gut feel.
Companies of all sizes are being challenged with unprecedented global competition, rapid technological advances, and increasing customers demands for quality, value and innovation. Companies can't afford to guess which business strategies to pursue, or waste time and money developing products and services that people don't need. They cannot afford to enter the wrong markets, target the wrong custoers or overlook new opportunities.
Planning never has been more important, yet this is one aspect of business that many companies fail to master. Here are some elements to consider when developing a strategy for the future.
Simply, a strategy is a plan of action. A company may execute a variety of strategies to guide the business, its products and services, and its operating, support and management processes.
For example, a strategy may be needed as you create products, develop alternative channels of distribution, expand into new markets, evaluate pricing alternatives, improve product development and manufacturing, or improve manufacturer-supplier realtions. The reason for developing strategy is to arrive at a solution that will help meet these challenges.
How do you find the one that will best serve the company and its customers? The solution should:
Understanding the difference is a key factor in formulating an effective strategy. Consider the last time you formulated a plan. You might have said, "We need a new computer." This is really the solution, while the desired outcome may have been saving time, trimming staff or enhancing productivity.
The desired outcome describes an important benefit that the company and/or customers would like to receive from the strategy.
A strategy is worth developing only if it places the company in a favorable competitve position. Achieving this depends on knowing your customers' desired outcomes and the degree to which they want them satisfied.
Winging it may serve you will in some situations, but it will never let you soar over the competition.
Bill Bryan is a counselor with the Service Corps of Retired Executives. SCORE offers counseling, workshops and seminars on small business operations. You can reach Bryan through SCORE, 515 N Court St. 815-962-0122, for information and appointments.
SCORE is a registered trademark of the Service Corp of Retired Executives
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