Business Planning - Strategy
Fine-Tuning Strategy

Fine-Tuning Strategy

How To "Steer" Your Business
How important is strategy? Whether your business is a one-person start-up or a huge corporation, a great strategy is crucial. It's like the steering wheel on a ship. If the ship is in A- - -1 condition except for a broken steering wheel, it's going to spin hopelessly in circles.

In my twelve different businesses, I've spun around in a lot of circles for lack of a solid strategy. Why is it so hard? Strategy is not that complicated! Basically it's just the few key factors that differentiate your business from your competitors'.

But it's easy to fall into traps. Many service business owners proclaim, "My strategy is great service," while CEOs of product companies exclaim, "Our strategy is to produce great products." However, these aren't strategies at all-because their competitors are often making the same claims.

In What Direction Are You Headed?
If you're not quite sure where your business is headed these days-or if you're not quite sure if you're taking the right course to get there . . . what do you do? Don't procrastinate! Take action!

Try a complete strategic review. Get together with your key people for a couple of days of undisturbed time-maybe even go off-site or hire a facilitator. For starters, here's a few of the most basic issues every company should discuss:

• Future Vision: What kind of company do we want to be five years out?
• Strengths: What aspects of our work do we do well?
• Weaknesses: What aspects don't we do well?
• Markets: What opportunities and challenges loom ahead in the markets we serve?
• Strategic Options: What are our basic alternatives and their implications?
• Selection: Which strategy should we select?
• Implementation: What changes need to be made to implement the chosen strategy?

Finding a true strategy-one that really differentiates your business from the competition-may take some energy, but believe me-it'll be worth it.

Here are a few possible strategy variables to consider:

• High quality versus low price
• Narrow versus broad product line
• High-tech versus low-tech products
• Trendy versus conservative products
• Brand-name versus generic
• Customized versus standard
• Niche market versus mainstream market

Another thing that has worked for me is having what some call "a bumper sticker strategy"-just a few words that capture the spirit of the more detailed strategy plan. A simple "bumper sticker strategy" lets everyone in the entire organization know what the strategy is-and it makes them feel part of it.

Don't Copy Your Competitor's Strategy!
When I was nineteen years old, I decided to start a bicycle rental business on Cape Cod, after I heard about a man earning $150,000 during the summer season renting bicycles. I copied everything he was doing. I bought fifty used bikes and lined up gas stations and motels to act as my rental agents. Then I waited for my profits to roll in . . . but no one was renting my bikes. The other guy's strategy didn't work for me. He had new bikes. I had old ones. He had the best locations. I had what was left.

In desperation I tried something different. I put to use my competitive advantage-free use of my mother's station wagon-and offered free delivery of bikes to campsites and motels. Now I had a strategy that differentiated my business from the competition. It didn't matter that my bicycles were old or what price I was charging. I was the only firm delivering bicycles.