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The word strategy can take on many different meanings. There is a tendency to compare business strategy with military science. Strategy can apply to military commanders, or it can apply to the purpose of a move in a basketball game. Business is not war, but rather an integrated strategy that focuses on people as well as products. The people in an organization are a company resource, as are the people on the end who buy the product or service.  Strategy is more about establishing relationships than about beating others into submission.

The best way to describe strategy is as a structure which uses an improvisational approach as it encounters new situations. Strategy is the planning and implementation of a product or service. It is not a learned process of planning and acting, but a combination of planning, interaction, evaluation, and adjustment. Strategy is continually reshaped as market conditions change. This requires making decisions and taking action to anticipate and respond to customer needs. 

An essential part of strategy is the speed of reaction. An organization must be able to understand customer needs, and must also be able to move quickly while maintaining strength and stability.

Targets provide the goal and structure. Reaching the goal requires adjustment as new knowledge is acquired. The central idea of strategic planning is to provide a way to reach a goal through adequate preparation and a strong vision of how the future will appear. Strategic planning takes into account the factors which will have significant impact on the company’s success and failures. It is necessary to lay a foundation for the changes and advantages that lie ahead.

The strategy allows leadership to obtain an initiative in a changing, complex, and interactive environment. The strategy incorporates planning and adjusts to turbulence during changing market conditions. Like hitting a moving target, strategic planning is far from a set process. It is the combination of planning with change that makes a strategy a success.

The Role of the Strategist

The strategist uses cognition, consistency, and coherence. The strategist challenges assumptions with a single question—Why? In this way the strategist examines resources and eliminates bottlenecks.

The strategist is a diplomat who carries the information to advocate for strategies.  The strategist facilitates processes to evaluate opportunities and helps make decisions.  The strategist is also a juggler who can manage diverse demands associated with leadership and management. 

The first step of a strategy is foresight—the identification of a need is followed by an analysis, a definition of key targets, and a strategy tested in the market. The new strategy evolves as a result of what was learned in the testing phase. To move forward, this cycle continues until the product reaches the marketplace. Feedback is encountered and incorporated in the process to make a better product and stay ahead of the competition. The strategist never stops analyzing the business, never stops learning, and leverages the skills and abilities which are brought to the company.

Strategic planning

Strategic Planning addresses:

1. Key customer segments. Are customer needs well defined and understood? Is the market segmented so that the differences are addressed?

2. Key functions of the company for deployment of the product. Is the business equipped to handle the needs and wants of the customers? Are the processes in place?

3. Key focus of the competitor, which will allow the company to seize advantages when an opportunity occurs. Do competitors have different sets of operating conditions that could give them an advantage? What benefits does the business bring to the marketplace? How are the company’s skills and capabilities leveraged to enhance the service? What is the competitive position of the service? How can the service be structured to ensure the highest return on technology and other investments in the short and long term?

4. Key focus on revenues. What aspects of the business have the most impact on income? How must the business be managed to maintain operating margins and profitability? Are the margins in line with competitors’?

Crucial Strategic Factors

Crucial strategic factors include an analysis phase, which determines the target market. How will the target market use the product? What is the rationale for the user to buy the product? What is the size of the projected market?

When performing an analysis consider the following:

  • Dissect the current market by performing a thorough market analysis. Look at the current technology, the world market, and the present economy.
  • Point of difference—build on strengths of the product.
  • Know your customer and what they really want and need.
  • Expand and nurture your niche through a strategic emphasis.  Consider the image you are projecting such as high quality, alignment with global brands, on-price competitiveness, and the commitment to continued innovation.

Evaluative Criteria for the Company

Companies may want to consider the following to determine strategy:

  • Return on investment (profit related to investment)
  • Risk of losing resources
  • Company growth (as a percentage of the marketplace)
  • Stability and security of earnings

Strategic Partnerships and Collaboration

It may be beneficial to partner with other organizations in order to enlarge the scope of services provided. Partnering is a useful way to incorporate skills without the overhead associated with rapid expansion. Types of partnerships and collaboration include:

  • Mutual Assistance : Mutual aid is the most informal. You help me, and later I will help you.
  • Legal Agreements: Formal agreements or contracts come into play when commitments are large and there is a consistent understanding.
  • Joint ventures: This type of project allows intense collaborative activity and provides resources and knowledge for a project. First, a strategy must be developed to determine how best to work together and how profits will be shared. This is definitely defined in a legal document.

Top-Down vs. Bottom Up Approach

It is the people on the front lines who deal with customers who may best be able to contribute valuable input to the strategy. All strategies are customer-based. Unless the needs of the customer are constantly addressed and changed accordingly, there is the possibility that a competitor will capitalize on the inconsistency.

Consider those sources closest to the customer to obtain feedback.  Marketing, sales, technical support, and customer service are great places to start. Leading an organization means being out front with the banner, but listening to the followers to de-emphasize hierarchy and focus on teamwork. Especially with the development of the Internet, globalization is occurring and we are becoming more and more interrelated. As we become a community-based environment, the needs of the whole are greater than the parts.

Management may argue that this process of inclusion takes too long. Another argument may be that if opportunities are continually encountered, how will the focus be maintained? There is the temptation to take the short-term rather than the long-term view. Usually the more ideas that come forward in a brainstorming session allow some clarity to surface. Solutions often become clear just through verbalizing issues and communicating with the team. The company always wins when the customer is placed first and the goal is to satisfy the customer by altering the strategy to accommodate the buyer.

Companies need to have some structure without bureaucracy.  If the entire company is involved there will have to be a structure in place to make the final decisions. Team leaders are often encouraged to listen to those within the group to funnel the feedback to management during planning sessions. Other ways to obtain feedback are through surveys which allow for open-ended responses, questionnaires or e-mail solicitations. Employees need to meet with senior executives in small groups to propose their ideas. 

Some companies may be reluctant to involve more people in the decision making process because of time restrictions. Have you ever heard the phase, "there is never enough time to devote to doing a job correctly, but there is always enough time to do it over"? Without enough information and ideas, the project may head down the wrong road. Involving team members in the decision builds rapport, trust, and captures ideas that are helpful in seeing the whole picture. What strategist wouldn’t want to see the whole picture rather than a small segment?

Capital Links with Strategy

Any needs for capital expenditures should be the result of information contained within the strategy.  The strategy takes into account the proposed expenditures it will have on its execution.

In Summary

Michael Eisner, the CEO of Walt Disney, says it another way: "What you are striving for is magic, not perfection." Endless variability in factors and obstacles can be overcome. The strategist summons success. Success in business rarely comes unplanned.  The strategist cannot place the success of a company on blind optimism by applying a strategy only when obstacles are encountered. 

Timing is critical. Strategy considers the ever-changing trends in the marketplace.  It is not the top down management styles, but rather the strategist who is flexible and listens to those closest to the customer, that can capitalize on correct direction.


This Business article was written by Ann Estabrooks on 2/11/2005

Ann Estabrooks is the founder of Catapulta, LLC, a business development consultancy based in Raleigh, North Carolina. She can be reached via info@catapultallc.com or by phone at 919-556-6119. Her website is http://www.catapultallc.com