Business Success Starts with a Clear Strategy

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Most businesses fail or do not reach their potential because they lack direction and purpose. This presentation demonstrates the need for and benefits of a clearly defined business strategy.

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Business Success Starts with a Clear Strategy

  1. 1. Business Success Starts with a Clear Strategy Presented by Kevin Nott June 17, 2009
  2. 2. Preface <ul><li>Simplistic overview of a complex concept </li></ul><ul><li>This is the method I employ </li></ul><ul><li>There are different methods used by others </li></ul><ul><li>There is not “one right way” to do it </li></ul><ul><li>Most effective when conducted with an experienced coach who </li></ul><ul><ul><li>Understands the process </li></ul></ul><ul><ul><li>Encourages you to look beyond the obvious and comfortable </li></ul></ul>
  3. 3. Expected Course Outcomes <ul><li>Understand the concept of STRATEGY </li></ul><ul><li>Know why a clear strategy is critical to business success </li></ul><ul><li>Understand strategic options </li></ul><ul><li>Learn how strategic options are evaluated </li></ul><ul><li>See how a business is built around a strategy </li></ul><ul><li>Be motivated to forge and follow a clear strategy </li></ul>
  4. 4. Running a Successful Business is like Playing a Game <ul><li>The game must be winnable </li></ul><ul><li>You play the game to win </li></ul><ul><li>Rules must be clearly understood </li></ul><ul><li>Probability of winning must be high </li></ul><ul><li>You can only play one game </li></ul>
  5. 5. What is this Strategy Stuff? <ul><li>Selecting the right game to play </li></ul><ul><li>Identifying components for success </li></ul><ul><li>Creating and aligning the organization to win the game </li></ul>
  6. 6. Why a Clear Strategy is Critical <ul><li>Sets the direction for the business </li></ul><ul><li>Blueprint for the organization </li></ul><ul><li>Identifies purpose </li></ul><ul><li>Filters opportunities, decisions and resources </li></ul><ul><li>Drives the communication between company and constituents </li></ul>
  7. 7. Steps to Selection and Clarification <ul><li>Analyzed your current situation </li></ul><ul><li>Identify viable strategic options </li></ul><ul><li>Evaluate each option Select one option </li></ul><ul><li>Determine strategic direction </li></ul><ul><li>Identify strategy-driving processes </li></ul><ul><li>Align all aspects of business with the strategy </li></ul>
  8. 8. S.W.O.T Analysis <ul><li>Internal Factors </li></ul><ul><ul><li>Strengths </li></ul></ul><ul><ul><li>Weaknesses </li></ul></ul><ul><li>External Factors </li></ul><ul><ul><li>Opportunities </li></ul></ul><ul><ul><li>Threats </li></ul></ul>
  9. 9. Internal Factors <ul><li>Company culture </li></ul><ul><li>Company image </li></ul><ul><li>Organizational structure </li></ul><ul><li>Key staff </li></ul><ul><li>Access to natural resources </li></ul><ul><li>Position on the experience curve </li></ul><ul><li>Operational efficiency </li></ul><ul><li>Operational capacity </li></ul><ul><li>Brand awareness </li></ul><ul><li>Market share </li></ul><ul><li>Financial resources </li></ul><ul><li>Exclusive contracts </li></ul><ul><li>Patents and trade secrets </li></ul>
  10. 10. External Factors <ul><li>Customers </li></ul><ul><li>Competitors </li></ul><ul><li>Market trends </li></ul><ul><li>Suppliers </li></ul><ul><li>Partners </li></ul><ul><li>Labor issues </li></ul><ul><li>Substitutes </li></ul><ul><li>Social changes </li></ul><ul><li>New technology </li></ul><ul><li>Economic factors </li></ul><ul><li>Political factors </li></ul><ul><li>Regulatory factors </li></ul><ul><li>Barriers to entry </li></ul>
  11. 11. Identifying Strategic Options <ul><li>Primary Business Focus </li></ul><ul><ul><li>Who you serve </li></ul></ul><ul><ul><li>What you offer </li></ul></ul><ul><li>Basis of Competition </li></ul><ul><ul><li>How you position your business in the market </li></ul></ul><ul><ul><li>How you conduct business </li></ul></ul>
  12. 12. Primary Focus Options <ul><li>Customer / Market </li></ul><ul><li>Product / Service </li></ul><ul><li>Production Capacity </li></ul><ul><li>Technology </li></ul>
  13. 13. Primary Focus Characteristics Product Integrity Customer Satisfaction Objective Existing products Customer needs Product Evolution New customers or uses for existing products New products for existing customers Growth Focus Products and services Customer type Business Defined by PRODUCT/SERVICE CUSTOMER/MARKET
  14. 14. Basis for Competition BASIS FOR SELECTION BY CUSTOMER Level of service – the experience. Quality, price and speed are less important. SERVICE Quality of the product. Price, service and quality will be less important QUALITY Speed of delivery. Quality, price and service are of lesser importance SPEED Lowest price. Speed, quality and service are of lesser importance. LOW PRICE
  15. 15. Strategic Options Summary SERVICE QUALITY SPEED LOW PRICE PRODUCT/SERVICE CUSTOMER/MARKET
  16. 16. Identify Strategy Drivers <ul><li>Processes that are performed in the business for a selected strategy that </li></ul><ul><li>Create distinctiveness </li></ul><ul><li>Are critical to the success of the strategy </li></ul><ul><li>Must be performed very well </li></ul><ul><li>Must be a business priority </li></ul>
  17. 17. How are Options Evaluated? <ul><li>Each option is considered on its own merit </li></ul><ul><li>Each factor is evaluated us S.W.O.T. analysis </li></ul><ul><li>Strategy drivers are identified </li></ul><ul><li>Ideal business is “created” for strategy </li></ul><ul><li>Current business is measured against ideal business to determine potential fit </li></ul>
  18. 18. Selection Criteria <ul><li>Organization has or can easily obtain significant competency in areas of Strategy Driver </li></ul><ul><li>Significant market demand exists to make the option viable </li></ul>
  19. 19. Strategy Fit Matrix Internal Capabilities Foolish Challenge Low Temptation (Solution seeking a problem) Winner High Low High Meets Customer Wants / Needs
  20. 20. Aligning the Business with the Strategy <ul><li>Shared Values </li></ul><ul><li>Structure </li></ul><ul><li>Systems </li></ul><ul><li>Style </li></ul><ul><li>Staffing </li></ul><ul><li>Skills </li></ul>Based on the 7-S Model developed by McKinsey & Company
  21. 21. No Strategic Alignment Skills Systems Structure Shared Values Staffing Style Strategy
  22. 22. Limited Strategic Alignment Skills Systems Structure Shared Values Staffing Style Strategy
  23. 23. Clear Strategic Alignment Strategy Shared Values Systems Structure Skills Staffing Style
  24. 24. Summary <ul><li>A clear strategy is the foundation for success </li></ul><ul><li>Only one strategy can be selected </li></ul><ul><li>Strategy defines all aspects of the business </li></ul><ul><li>Organizational alignment is critical to strategy </li></ul><ul><li>Strategic success is dependent on Strategic Drivers </li></ul><ul><li>Strategic Drivers must be in areas of core competency </li></ul>
  25. 25. Kevin Nott , M.A. Business Strategy Coach Kevin@ GetProfitPointed .com

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