The Five ‘S’s for successful execution of business strategy

Everyone can craft a business strategy but only the ablest can execute it with successful completion. Here are five essentials required for this feat. Incidentally all of these begin with the alphabet ‘S”:

1. Surprise:  The top S in business strategy execution is pre-emptive action by the firm against single or a group of competitors at a point of time when they least expected it. By unveiling new or much improved product, firm must plan to be much ahead of others using technology and improved method of distribution. This element of surprise must astound the competitors powered by high degree of secrecy and unpredictability

2. Speed: The second essential for successful strategy execution is the speed in which a firm moves in putting into action its strategy. This is what General Norman Schwarzkopf practised in combination with the use of overwhelming power and spectacular display of force in order to paralyze Iraqi Army. Taking a leaf out of the General’s repertoire firm must use speed and promotional campaigns to secure an edge over competitors

3. Security:   This S has two dimensions: internal and external. Internal security arises from robust strength that eliminates all weak points that are vulnerable in the case of pre-emptive offensive or counter offensive by the opponent when the firm takes on the attacker first. If such weak points exist then competitors can creep through. External security arises when the firm has done thorough analysis of risk and return and is satisfied that the risk is acceptable and worth taking one

4. Savings: This is the economic part of executing business strategy. Firm must employ its resources in optimum manner to gain its goals stipulated in strategy paper. While carrying on the implementation side it is necessary that there is a trade-off between resources used and the gains garnered. No firm can throw all his resources to a single expedition. Similarly re-usable resources are to be preserved to effect cost-savings.

5. Shared value: Finally shared value is large S because that tells about the prevailing mood & dedication to the purpose among the cadre that distinguishes a successful firm from the laggards. Once the whistle is blown to put the strategy on wheels every staff member shall work with the same level of dedication, loyalty, enthusiasm and excellence in customer service. That is almost half way in executing your business strategy.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

Three questions you must answer before crafting business strategy

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

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

Why competition is of vital interest to a Firm?

It was Sun Tzu who said “War is a matter of vital importance to the State: the province of life and death; the road to survival or ruin.  It is mandatory that it be thoroughly studied.” In business strategy we have the same connotation. But instead of war we have competition.

Paraphrasing Su Tzu we can equip” Competition is a matter of vital importance to the firm; the province of life and death; the road to survival or ruin.  It is mandatory that it be thoroughly studied.”

In studying competition we have three inter-related aspects: market, customers and product. All three need constant and careful attention. A robust business strategy must be able to balance all three to gain what we call “competitive advantage”.

Understanding market is the first step. What market needs right now must be explored with details. Before thinking about what product to produce firm  must perch on what product market needs, quality and standards the market is looking for and the price that could likely prevail. This is basically market driven approach. When a firm has already decided on a particular product, then it must assess likely demand and if such demand is less than expected must go on creating the need for that product by way of educating and explaining. This is product driven approach.

Every business competes to get the customers. Capturing customer is one thing and retaining them is another. In fact business failures occur where firms are unable to retain their customer base. Just having a customer base is not enough. The customers must be persuaded to go for repeat purchases. Firm should begin with finding buying habits of the customers: what they buy when they buy and what quantity. Firm needs also to connect with them and continue to be in touch with them.

Finally a firm must be armed with the right product to make test marketing as the first salvo followed by aggressive campaign to take it upward. Another business tactics is to go for marketing blitz at first and follow up with focussed persuasion on selective targets by creating dealership or alliances with other firms who stand to benefit by selling the firm’s product to their own customers. Whatever it is unless the product is of absolute value proposition that is unshakable and that cannot be duplicated by competitors in near term the marketing campaign would end in a whimper rather than a bang!

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

Richard Rumelt: Four criteria for evaluating business strategy

Professor Richard Rumelt came out with a brilliant idea on business strategy evaluation by using just four criteria that can dissect how it is working well at present and in the future too. He recommends that consistency, consonance, competitive advantage and feasibility as the four criteria:

Consistency: Primary search option under consistency is to appraise whether internal and external goals are aligned with each other. For example, how the marketing department sets targets for its team and how these are in consistent with the broader market depth the firm seeks. Rumelt especially is concerned with a situation where sudden surge of demand of a particular product consequent to an aggressive sales campaign bringing out strain in the production department resulting in organization-wide conflict. Therefore, the main focus of strategy evaluation must be to remove situations where mutually inconsistent goals are set by either marketing or production departments.

Consonance: A vital ingredient in any business strategy is the ability of adapting to the external environment with short notice. There may be events that are critical or ground shaking occurring in economic, political and social fabric that could directly impact industry. Good example is how lifestyle and fashion, change the demand stature of goods that are used by young people in the market. The changes that happen in the market must be immediately taken upon by the firm so that necessary alterations are done in both marketing & production areas.

Competitive advantage: In the key activities of the business model there must be a provision to create and continually maintain competitive advantage amongst competitors especially in the case of homogeneous products. Rumelt suggests the firm on continued basis, must assess how it is placed in terms of innovation and technology. Being in the top three is essential and to make it there, the firm needs superior resources, superior skills, and superior marketing position.

Feasibility: Ascertaining the feasibility of overall business strategy is the fourth and final criteria. The focus of this aspect of strategy evaluation is to find out the neither ideal position where neither there is over-taxing nor under-utilization of key resources. Besides, implementation of strategy must be seen as fair and objective by all personnel in the entire organization. 

In the production department the skills development and training must be of the state-of-the-art type. To ensure that condition firm must allocate sufficient resources for skills development. Equally important is to allocate funds for the marketing department to undertake training of their staff in improving skill sets in sales and distribution. In such an ideal balance, value proposition by way of products and customer service by way of sales & after-sales go in harmony with the expectations of the target market.

 

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist