Strategy is about competing differently and striving for a competitive advantage.
An enterprises strategy evolves over time to improve, and adapts to the shifting landscape of internal and external challenges and opportunities. For this reason your strategy needs to be partly proactive and partly reactive.
An enterprise’s strategy aligns with an important element of its business model:
The Value-Price-Cost framework
The customer value proposition can be expressed as V – P (V meaning the value to the customer and P meaning Product Price) which is essentially the customer’s perception of how much value they are getting for the money. The profit formula, on a per unit basis, can be expressed as P – C (C meaning cost). From a customer’s perspective, the greater the value delivered (V) and the lower the price (P) the more attractive your value proposition is to them. From your side of the table, the lower the costs (C) given the customer value proposition (V – P) the greater the ability of your business model to be a money maker.
For these fundamental reasons, an enterprise’s business model sets the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and create profit.
How we craft your strategy
We begin by listening to you and crystalising your vision so we look through the same lens together.
We then work on 3 things that will make your strategic plan a game-changer.
The Fit Test
We test how well the strategy will fit your enterprise’s situation. To qualify as a winner, your strategy has to be well matched to industry and competitive conditions, your best market opportunities, and other important aspects of the business environment you operate in. Before you pass the fit test, your strategy also needs to suit your resources and capabilities.
The Competitive Advantage Test
This tests whether the strategy we develop for you helps you to achieve a sustainable competitive advantage. A winning strategy allows you to achieve a competitive advantage over your key rivals that is long lasting – a bigger and more durable competitive advantage is powerful.
The Performance Test
We test if your strategy will produce good business performance. Two kinds of performance indicators reveal the most the power of your strategy – your competitive strength and your financial strength (profitability). These are competitive strength and market standing; and profitability and financial strength.
Why are these strategy tests important?
How well a company performs is directly attributable to the caliber of its strategy and the prodficiency with which the strategy is implemented.
What’s involved in strategy making and strategy implementation?
Stage 1: We work with you to develop and then communicate a strategic vision, mission and core values.
A strategic vision describes ‘where you are going’, in other words your aspirations for your enterprise and the course and direction charted to achieve this. We develop your vision to be specific, graphic, focused and distinctive, and uniquely targeting your business so that it is more readily embraced by your teams.
Your mission describes the scope and purpose of your present business, such as who you are, what you do, and why you exist. It is purely descriptive and describes your products or services, specifies your customers’ needs and your market space and gives your business an identity.
The core values of your enterprise would already be established in one way or another, even if they haven’t yet been formally expressed. Your values are the beliefs, traits and behavioural norms that your teams are expected to display in conducting business and pursuing your enterprise’s vision and mission.
Stage 2: We determine objectives
Objectives are your performance targets – the specific results that you and the management team want to achieve. The purpose of setting objectives as part of your strategic planning is to convert the vision and mission into specific performance targets. We take these targets a little further and develop stretch objectives by setting targets high enough to stretch your enterprise to perform at its full potential and deliver the best possible results.
Objectives are then divided into two core concepts:
Financial objectives – specified increases in annual revenues, increases in after tax profits, specific % profit margins, specific internal cash flows and so on.
Strategic objectives – specific % market share increase, achieving lower overall costs than competitors, overtaking key competitors, broader technological capabilities, better known brand, wider product lines and so on.
Stage 3: Crafting your strategy
In most organisations, crafting and executing strategy is a collaborative team effort in which every director, manager and leader has a role for the area they head. This collaboration can be challenging with conflicting priorities and our involvement in facilitating the strategy creation is valuable, streamlined and provides focus and equity.
A large enterprise’s corporate strategy (for the set of businesses as a whole) is the top level of strategy crafting. This establishes the overall game plan for managing a set of business areas.
A business strategy (one for each business the enterprises has diversified into) involves streamlining the enterprise’s market position and building competitive advantage in either a single business company or within a single business unit of a larger enterprise.
A functional area strategy (within each business) outlines how to manage a particular activity within an enterprise in ways that support the business strategy.
At the bottom of the hierarchy is the nuts and bolts operating strategy (we craft one for within each functional area). These determine how to manage the key operating units such as plant, distribution and purchasing, and specific operating activities such as quality control, materials purchasing, technology, brand management, internet sales and so on.
By this stage the strategic plan has been crafted and elements are pieced together.
Strategic vision + Mission + Objectives + Strategy = A Strategic Plan
Stage 4: Executing the strategy
Implementing the strategic plan is a unique process for each organisation and is usually the most demanding and time consuming part of strategy management. Let’s face it, converting plans into actions and results can test our ability to drive change at the best of times. To execute the strategic plan we need to motivate teams, build and strengthen competitive capabilities, beat performance targets, and create and nurture a culture that supports the new and improved version of how you’ve always done things.
Stage 5: Evaluating performance and initiating corrective adjustments
An enterprise’s vision, mission,objectives and approach to strategy are never final; managing strategy is an ongoing process.
Ethics, Corporate Social Responsibility, Environmental Sustainability and Strategy
Your organisation has a responsibility to make a profit and grow business, Equally you, your enterprise and your teams have a duty to obey the law and play by the rules of fair competition and trading. We embed ethical principles into all aspects and hierarchic levels of your strategic plan because we understand the cost of not getting this right.
Consumers are motivated now more than ever by your commitment to corporate social responsibility (CSR); your duty to operate in an honourable manner, provide good working conditions for your teams, encourage work diversity, be a good steward of the environment, and actively operate to improve the quality of life in the community in which you operate and in society at large.
