Business strategy is serious affair because you
have got to answer three questions before you really start formulating strategy.
Unless you get the right and most importantly honest answers to the three
questions you will not be able to do an effective strategy formulation.
1. Where were you?
This question solicits precise answer about your
concept of your business, your business policy and your past performance in
terms of product line, target market, customer capture & retention, revenue
generation, bottom line and how you have fared in terms of sales growth and
beating your nearest competitor. You have to give a pecking order where you are
exactly placed. If you are not on the top five you must explain where you are
lagging: in the product features or market structure.
2. Where are
you now?
This must sum up your present state of affairs in terms
of cost-revenue dynamics, product line, market share and the structure of
market itself. According to BCG Matrix you may fall into one of the categories:
Stars, Cash-cows, Question Marks, and Dogs. Assume
you are in the square of question marks. This is the space for firm with low
market share in a high-growth market. If you are in this sector there is big
potential for breakthrough with suitable strategy to succeed as market leader
in the future.
On the contrary, if you are in the low market share
in a fairly mature market with average growth then you are dubbed as dogs. You must
review your position and progresses objectively so that you know exactly where you
are now.
3. Where you
wish to go?
I am not suggesting that you can catapulted from
dogs to stars overnight. But with the same objectivity guiding you, quietly
work on where you can go from here to somewhere you are comfortable in terms of
product improvement or innovation that satisfies a need presently observed in
the market or a need you can create in the market by yourself.
Secondly, you must tabulate in terms of time scale
what products you are going to introduce, what market share you wish to have
and how realistic are your expectations in terms of market penetration & success
that can come in the wake of your promotional campaigns.
Thirdly, you need to assess finance, human resource, logistics required
for you to operationalize you program of action along with ascertaining the
risks associated with it and the revenue profile you would have generated in
the future. When this is complete you have already got details necessary for
your strategy formulation.
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business
Strategist
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