13 Commandments For Crafting Successful Business Strategies

13 COMMANDMENTS
FOR CRAFTING
SUCCESSFUL BUSINESS STRATEGIES
Dr WILFRED MONTEIRO
Executive Director
SYNERGY MANAGEMENT ASSOCIATES
Mumbai- INDIA
www.synergymanager.net
P A T H F I N D E R
THE CORPORATE PLANNI NG RETREAT
Dr WILFRED MONTEIRO
Executive Director
Mumbai- INDIA
P A T H F I N D E R
THE CORPORATE PLANNI NG RETREAT
Mastering life
is the process of moving
from where
you are
to where
You want to be
- Werner Erhard
copyright Dr Wilfred Monteiro
www.synergymanager.net -all rights
reserved
Mastering life
is the process of moving
from where
you are
to where
You want to be
- Werner Erhard
Taking time to
think
and reflect
may be more
important
than many
COMPANIES
allow time for!
reserved
Taking time to
think
and reflect
may be more
important
than many
COMPANIES
allow time for!
Most important,
leaders can
conceive and articulate goals
that lift people
out of their
petty preoccupations
and unite them
in pursuit of objectives
worthy of their best efforts.
- John Gardner
reserved
Most important,
leaders can
conceive and articulate goals
that lift people
out of their
petty preoccupations
and unite them
in pursuit of objectives
worthy of their best efforts.
- John Gardner
Most organizations dont know how to
execute strategy.
Less than 10% of
strategies
effectively
formulated are
effectively
executed.
reserved
Less than 10% of
strategies
effectively
formulated are
effectively
executed.
Fortune Magazine
KNOWING DOING GAP
Percent of large companies who
regarded themselves as good
or excellent at generating new
knowledge
46%
reserved
7
reported having launched new
products based on the application
of new knowledge
14% (of the same firms)
Source: J. Pfeiffer and R.I. Sutton, The Knowing Doing Gap (Boston: Harvard Business School Press, 2000)
TESTS OF A WINNING STRATEGY
GOODNESS OF FIT TEST
How well is strategy matched to firms situation?
COMPETITIVE ADVANTAGE TEST
Does strategy lead to sustainable competitive
advantage?
PERFORMANCE TEST
Does strategy boost firm performance?
reserved
GOODNESS OF FIT TEST
How well is strategy matched to firms situation?
COMPETITIVE ADVANTAGE TEST
Does strategy lead to sustainable competitive
advantage?
PERFORMANCE TEST
Does strategy boost firm performance?
What is strategic management?
A continuous, iterative process aimed at
keeping an organization as a whole
approporiately matched to its environment
(Certo and Peter)
Keeping the business in tune with
management and marketing forces both
outside and inside the firm
reserved
A continuous, iterative process aimed at
keeping an organization as a whole
approporiately matched to its environment
(Certo and Peter)
Keeping the business in tune with
management and marketing forces both
outside and inside the firm
Choosing how the organization will be
DIFFERENT- AL RIES
Strategic management is an ongoing process that
assesses the business and the industries in which the company is involved;
assesses its competitors and sets goals and strategies to meet all existing and
potential competitors;
and then reassesses each strategy annually or quarterly [i.e. regularly] to
determine how it has been implemented and whether it has succeeded or
needs replacement by a new strategy to meet
changed circumstances, new technology, new competitors, a new
economic environment., or a new social, financial, or political
environment.
(Lamb, 1984:ix)
reserved
Strategic management is an ongoing process that
assesses the business and the industries in which the company is involved;
assesses its competitors and sets goals and strategies to meet all existing and
potential competitors;
and then reassesses each strategy annually or quarterly [i.e. regularly] to
determine how it has been implemented and whether it has succeeded or
needs replacement by a new strategy to meet
changed circumstances, new technology, new competitors, a new
economic environment., or a new social, financial, or political
environment.
(Lamb, 1984:ix)
COMPETITIVE STRATEGY PRINCIPLE
Successful companies invest
aggressively in creating sustainable competitive
advantage, for it is their
single most dependable contributor
to above average ROI!
reserved
Successful companies invest
aggressively in creating sustainable competitive
advantage, for it is their
single most dependable contributor
to above average ROI!
THE FIVE GENERIC COMPETITIVE
STRATEGIES
LOW-COST LEADERSHIP
Striving to be the overall low-cost provider in industry
BROAD DIFFERENTIATION
Striving to build customer loyalty by differentiating ones
product offerings from rivals products
BEST-COST PROVIDER STRATEGY
Striving to give customers more value for the money by
combining an emphasis on low cost with an emphasis on
upscale differentiation
reserved
LOW-COST LEADERSHIP
Striving to be the overall low-cost provider in industry
BROAD DIFFERENTIATION
Striving to build customer loyalty by differentiating ones
product offerings from rivals products
BEST-COST PROVIDER STRATEGY
Striving to give customers more value for the money by
combining an emphasis on low cost with an emphasis on
upscale differentiation
Five Qualities that Lead to
Competitive Advantage
Appropriability
Can you actually capture the
profits that can be made in
the business?
Supernormal returns
Profits that are above the
average for a comparable set
of firms
Primarily a function of
greater-than-average
cost-price margins
Superiority
Inimitability
reserved
Appropriability
Can you actually capture the
profits that can be made in
the business?
Supernormal returns
Profits that are above the
average for a comparable set
of firms
Primarily a function of
greater-than-average
cost-price margins
Durability
Non-substitutability
Appropriability
THREE QUESTIONS
When a firm is
experiencing
difficulties, its
good to ask three
questions
Is its strategy flawed?
Is the implementation of its
strategy flawed?
reserved
14
When a firm is
experiencing
difficulties, its
good to ask three
questions
Is the implementation of its
strategy flawed?
Are both strategy and
implementation flawed?
13 COMMANDMENTS FOR CRAFTING SUCCESSFUL BUSINESS
STRATEGIES
1. Always put top priority on crafting and executing
strategic moves that enhance a firms competitive
position for the long-term and that serve to
establish it as an industry leader.
2. Understand that a clear, consistent competitive
strategy, when well-crafted and well-executed,
builds reputation and recognizable industry position
whereas a strategy aimed solely at capturing
momentary market opportunities yields fleeting
benefits.
1. Always put top priority on crafting and executing
strategic moves that enhance a firms competitive
position for the long-term and that serve to
establish it as an industry leader.
2. Understand that a clear, consistent competitive
strategy, when well-crafted and well-executed,
builds reputation and recognizable industry position
whereas a strategy aimed solely at capturing
momentary market opportunities yields fleeting
benefits.
reserved
STRATEGIES
3. Endeavor not to get stuck back in the pack
with no coherent long-term strategy or
distinctive competitive position, and little
prospect of climbing into the ranks of the
industry leaders.
4. Invest in creating a sustainable competitive
advantage, for it is a most dependable
contributor to above-average profitability
3. Endeavor not to get stuck back in the pack
with no coherent long-term strategy or
distinctive competitive position, and little
prospect of climbing into the ranks of the
industry leaders.
4. Invest in creating a sustainable competitive
advantage, for it is a most dependable
contributor to above-average profitability
reserved
STRATEGIES
5. Play aggressive offense to build competitive
advantage and aggressive defense to protect it.
6. Avoid strategies capable of succeeding only in the
best of circumstances.
7. Likewise, avoid rigidly prescribed or inflexible
strategies -- changing market conditions may render
it quickly obsolete.
5. Play aggressive offense to build competitive
advantage and aggressive defense to protect it.
6. Avoid strategies capable of succeeding only in the
best of circumstances.
7. Likewise, avoid rigidly prescribed or inflexible
strategies -- changing market conditions may render
it quickly obsolete.
reserved
STRATEGIES
8. Dont underestimate the reactions and the
commitment of rival firms.
9. Be wary of attacking strong, resourceful
rivals without first having solid competitive
advantage and ample financial strength.
10. Consider that attacking competitive
weakness is usually more profitable than
attacking competitive strength.
8. Dont underestimate the reactions and the
commitment of rival firms.
9. Be wary of attacking strong, resourceful
rivals without first having solid competitive
advantage and ample financial strength.
10. Consider that attacking competitive
weakness is usually more profitable than
attacking competitive strength.
reserved
STRATEGIES
11. Be judicious in cutting prices without an
established cost advantage.
12. Be aware that aggressive strategic moves to wrest
crucial market share away form rivals often provoke
aggressive retaliation in the form of a marketing
arms race and/or price wars.
13. Employ bold strategic moves in pursuing
differentiation strategies so as to open up very
meaningful gaps in quality or service or advertising
or other product attributes.
11. Be judicious in cutting prices without an
established cost advantage.
12. Be aware that aggressive strategic moves to wrest
crucial market share away form rivals often provoke
aggressive retaliation in the form of a marketing
arms race and/or price wars.
13. Employ bold strategic moves in pursuing
differentiation strategies so as to open up very
meaningful gaps in quality or service or advertising
or other product attributes.
reserved
If you have any questions at all please
do not hesitate to send a note or call.
My email address is:
wm@synergymanager.net
If you have any questions at all please
do not hesitate to send a note or call.
My email address is:
wm@synergymanager.net
20
(c) copyright 2010 Dr Wilfred Monteiro www.synergymanager.net
is a nationally acclaimed
stalwart in the field of
business management with
an illustrious career spanning
over 25 years
He is a consultant and advisor
to Board of Directors of
leading companies &
Chambers of Commerce;
a management trainer of high
repute who has conducted
over 2250 seminars in India
and abroad in areas of
business strategy, marketing
& organization development.
a Visiting Professor to
premier management
institutes and staff training
colleges throughout India.
Dr WILFRED MONTEIRO
is a nationally acclaimed
stalwart in the field of
business management with
an illustrious career spanning
over 25 years
He is a consultant and advisor
to Board of Directors of
leading companies &
Chambers of Commerce;
a management trainer of high
repute who has conducted
over 2250 seminars in India
and abroad in areas of
business strategy, marketing
& organization development.
a Visiting Professor to
premier management
institutes and staff training
colleges throughout India.
21
website: www.synergymanager.net
(c) copyright 2010 Dr Wilfred Monteiro
http://wilfredmonteiro.blogspot.in/
http://negotiating-wizard.blogspot.in
http://salescoach-india.blogspot.in
http://the-sales-champ.blogspot.in
http://salesforce-excellence.blogspot.in
http://strategic-selling.blogspot.in
http://hrm-excellence.blogspot.in
http://personal-growth-guru.blogspot.in
http://thegreatmanager.blogspot.in
http://leadership-by-values.blogspot.in
http://therightetiquette.blogspot.in
Dr WILFRED MONTEIRO
please view the blogspots I have developed for my participant ongoing learning
http://wilfredmonteiro.blogspot.in/
http://negotiating-wizard.blogspot.in
http://salescoach-india.blogspot.in
http://the-sales-champ.blogspot.in
http://salesforce-excellence.blogspot.in
http://strategic-selling.blogspot.in
http://hrm-excellence.blogspot.in
http://personal-growth-guru.blogspot.in
http://thegreatmanager.blogspot.in
http://leadership-by-values.blogspot.in
http://therightetiquette.blogspot.in
22
website: www.synergymanager.net
(c) copyright 2010
Dr Wilfred
Monteiro
www.synergyman
ager.net
CONTACT US
Dr Wilfred Monteiro
TELE : 91 22 9819843927
EMAIL: wm@synergymanager.net
website:
copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved
since 1993
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