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13 commandments for crafting successful business strategies

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Most upcoming enterprises are so caught up in fulfilling targets for the next quarter that they have no time to plan and analyse and think of LEVEL NEXT as the achievement platform...here are some …

Most upcoming enterprises are so caught up in fulfilling targets for the next quarter that they have no time to plan and analyse and think of LEVEL NEXT as the achievement platform...here are some useful tips to plan strategically

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  • 1. 13 COMMANDMENTS FOR CRAFTING SUCCESSFUL BUSINESS STRATEGIES Dr WILFRED MONTEIRO Executive Director SYNERGY MANAGEMENT ASSOCIATES Mumbai- INDIA www.synergymanager.net
  • 2. P A T H F I N D E R © THE CORPORATE PLANNING RETREAT Dr WILFRED MONTEIRO Executive Director SYNERGY MANAGEMENT ASSOCIATES Mumbai- INDIA www.synergymanager.net P A T H F I N D E R © THE CORPORATE PLANNING RETREAT
  • 3. “ Mastering life is the process of moving from where you are to where You want to be” - Werner Erhard copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved “ Mastering life is the process of moving from where you are to where You want to be” - Werner Erhard
  • 4. Taking time to think and reflect may be more important than many COMPANIES allow time for!copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved Taking time to think and reflect may be more important than many COMPANIES allow time for!
  • 5. “ Most important, leaders can conceive and articulate goals that lift people out of their petty preoccupations and unite them in pursuit of objectives worthy of their best efforts. ” - John Gardner copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved “ Most important, leaders can conceive and articulate goals that lift people out of their petty preoccupations and unite them in pursuit of objectives worthy of their best efforts. ” - John Gardner
  • 6. Most organizations don’t know how to execute strategy. “Less than 10% of strategies effectively formulated are effectively executed.” copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved “Less than 10% of strategies effectively formulated are effectively executed.” – Fortune Magazine
  • 7. KNOWING – DOING GAP Percent of large companies who … … regarded themselves as good or excellent at generating new knowledge 46% copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved 7 … reported having launched new products based on the application of new knowledge 14% (of the same firms) Source: J. Pfeiffer and R.I. Sutton, The Knowing – Doing Gap (Boston: Harvard Business School Press, 2000)
  • 8. TESTS OF A WINNING STRATEGY • GOODNESS OF FIT TEST – How well is strategy matched to firm’s situation? • COMPETITIVE ADVANTAGE TEST – Does strategy lead to sustainable competitive advantage? • PERFORMANCE TEST – Does strategy boost firm performance? copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved • GOODNESS OF FIT TEST – How well is strategy matched to firm’s situation? • COMPETITIVE ADVANTAGE TEST – Does strategy lead to sustainable competitive advantage? • PERFORMANCE TEST – Does strategy boost firm performance?
  • 9. What is strategic management? • A continuous, iterative process aimed at keeping an organization as a whole approporiately matched to its environment (Certo and Peter) • Keeping the business in tune with management and marketing forces both outside and inside the firm copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved • A continuous, iterative process aimed at keeping an organization as a whole approporiately matched to its environment (Certo and Peter) • Keeping the business in tune with management and marketing forces both outside and inside the firm Choosing how the organization will be DIFFERENT- AL RIES
  • 10. “Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” (Lamb, 1984:ix) copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved “Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” (Lamb, 1984:ix)
  • 11. COMPETITIVE STRATEGY PRINCIPLE Successful companies invest aggressively in creating sustainable competitive advantage, for it is their single most dependable contributor to above average ROI! copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved Successful companies invest aggressively in creating sustainable competitive advantage, for it is their single most dependable contributor to above average ROI!
  • 12. THE FIVE GENERIC COMPETITIVE STRATEGIES LOW-COST LEADERSHIP • Striving to be the overall low-cost provider in industry • BROAD DIFFERENTIATION • Striving to build customer loyalty by differentiating one’s product offerings from rivals’ products • BEST-COST PROVIDER STRATEGY • Striving to give customers more value for the money by combining an emphasis on low cost with an emphasis on upscale differentiation copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved LOW-COST LEADERSHIP • Striving to be the overall low-cost provider in industry • BROAD DIFFERENTIATION • Striving to build customer loyalty by differentiating one’s product offerings from rivals’ products • BEST-COST PROVIDER STRATEGY • Striving to give customers more value for the money by combining an emphasis on low cost with an emphasis on upscale differentiation
  • 13. Five Qualities that Lead to Competitive Advantage Appropriability – Can you actually capture the profits that can be made in the business? – Supernormal returns • Profits that are above the average for a comparable set of firms • Primarily a function of greater-than-average cost-price margins Superiority Inimitability copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved Appropriability – Can you actually capture the profits that can be made in the business? – Supernormal returns • Profits that are above the average for a comparable set of firms • Primarily a function of greater-than-average cost-price margins Durability Non-substitutability Appropriability
  • 14. THREE QUESTIONS When a firm is experiencing difficulties, its good to ask three questions Is its strategy flawed? Is the implementation of its strategy flawed? copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved 14 When a firm is experiencing difficulties, its good to ask three questions Is the implementation of its strategy flawed? Are both strategy and implementation flawed?
  • 15. 13 COMMANDMENTS FOR CRAFTING SUCCESSFUL BUSINESS STRATEGIES 1. Always put top priority on crafting and executing strategic moves that enhance a firm’s competitive position for the long-term and that serve to establish it as an industry leader. 2. Understand that a clear, consistent competitive strategy, when well-crafted and well-executed, builds reputation and recognizable industry position whereas a strategy aimed solely at capturing momentary market opportunities yields fleeting benefits. 1. Always put top priority on crafting and executing strategic moves that enhance a firm’s competitive position for the long-term and that serve to establish it as an industry leader. 2. Understand that a clear, consistent competitive strategy, when well-crafted and well-executed, builds reputation and recognizable industry position whereas a strategy aimed solely at capturing momentary market opportunities yields fleeting benefits. copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved
  • 16. 13 COMMANDMENTS FOR CRAFTING SUCCESSFUL BUSINESS STRATEGIES 3. Endeavor not to get “stuck back in the pack” with no coherent long-term strategy or distinctive competitive position, and little prospect of climbing into the ranks of the industry leaders. 4. Invest in creating a sustainable competitive advantage, for it is a most dependable contributor to above-average profitability 3. Endeavor not to get “stuck back in the pack” with no coherent long-term strategy or distinctive competitive position, and little prospect of climbing into the ranks of the industry leaders. 4. Invest in creating a sustainable competitive advantage, for it is a most dependable contributor to above-average profitability copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved
  • 17. 13 COMMANDMENTS FOR CRAFTING SUCCESSFUL BUSINESS STRATEGIES 5. Play aggressive offense to build competitive advantage and aggressive defense to protect it. 6. Avoid strategies capable of succeeding only in the best of circumstances. 7. Likewise, avoid rigidly prescribed or inflexible strategies -- changing market conditions may render it quickly obsolete. 5. Play aggressive offense to build competitive advantage and aggressive defense to protect it. 6. Avoid strategies capable of succeeding only in the best of circumstances. 7. Likewise, avoid rigidly prescribed or inflexible strategies -- changing market conditions may render it quickly obsolete. copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved
  • 18. 13 COMMANDMENTS FOR CRAFTING SUCCESSFUL BUSINESS STRATEGIES 8. Don’t underestimate the reactions and the commitment of rival firms. 9. Be wary of attacking strong, resourceful rivals without first having solid competitive advantage and ample financial strength. 10. Consider that attacking competitive weakness is usually more profitable than attacking competitive strength. 8. Don’t underestimate the reactions and the commitment of rival firms. 9. Be wary of attacking strong, resourceful rivals without first having solid competitive advantage and ample financial strength. 10. Consider that attacking competitive weakness is usually more profitable than attacking competitive strength. copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved
  • 19. 13 COMMANDMENTS FOR CRAFTING SUCCESSFUL BUSINESS STRATEGIES 11. Be judicious in cutting prices without an established cost advantage. 12. Be aware that aggressive strategic moves to wrest crucial market share away form rivals often provoke aggressive retaliation in the form of a marketing “arms race” and/or price wars. 13. Employ bold strategic moves in pursuing differentiation strategies so as to open up very meaningful gaps in quality or service or advertising or other product attributes. 11. Be judicious in cutting prices without an established cost advantage. 12. Be aware that aggressive strategic moves to wrest crucial market share away form rivals often provoke aggressive retaliation in the form of a marketing “arms race” and/or price wars. 13. Employ bold strategic moves in pursuing differentiation strategies so as to open up very meaningful gaps in quality or service or advertising or other product attributes. copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved
  • 20. If you have any questions at all please do not hesitate to send a note or call. My email address is: wm@synergymanager.net If you have any questions at all please do not hesitate to send a note or call. My email address is: wm@synergymanager.net 20 (c) copyright 2010 Dr Wilfred Monteiro www.synergymanager.net
  • 21. • is a nationally acclaimed stalwart in the field of business management with an illustrious career spanning over 25 years • He is a consultant and advisor to Board of Directors of leading companies & Chambers of Commerce; • a management trainer of high repute who has conducted over 2250 seminars in India and abroad in areas of business strategy, marketing & organization development. • a Visiting Professor to premier management institutes and staff training colleges throughout India. Dr WILFRED MONTEIRO • is a nationally acclaimed stalwart in the field of business management with an illustrious career spanning over 25 years • He is a consultant and advisor to Board of Directors of leading companies & Chambers of Commerce; • a management trainer of high repute who has conducted over 2250 seminars in India and abroad in areas of business strategy, marketing & organization development. • a Visiting Professor to premier management institutes and staff training colleges throughout India. 21website: www.synergymanager.net(c) copyright 2010 Dr Wilfred Monteiro www.synergymanager.net
  • 22. – http://wilfredmonteiro.blogspot.in/ – http://negotiating-wizard.blogspot.in – http://salescoach-india.blogspot.in – http://the-sales-champ.blogspot.in – http://salesforce-excellence.blogspot.in – http://strategic-selling.blogspot.in – http://hrm-excellence.blogspot.in – http://personal-growth-guru.blogspot.in – http://thegreatmanager.blogspot.in – http://leadership-by-values.blogspot.in – http://therightetiquette.blogspot.in Dr WILFRED MONTEIRO please view the blogspots I have developed for my participant ongoing learning – http://wilfredmonteiro.blogspot.in/ – http://negotiating-wizard.blogspot.in – http://salescoach-india.blogspot.in – http://the-sales-champ.blogspot.in – http://salesforce-excellence.blogspot.in – http://strategic-selling.blogspot.in – http://hrm-excellence.blogspot.in – http://personal-growth-guru.blogspot.in – http://thegreatmanager.blogspot.in – http://leadership-by-values.blogspot.in – http://therightetiquette.blogspot.in 22website: www.synergymanager.net (c) copyright 2010 Dr Wilfred Monteiro www.synergyman ager.net
  • 23. CONTACT US Dr Wilfred Monteiro TELE : 91 22 9819843927 EMAIL: wm@synergymanager.net website: www.synergymanager.net copyright Dr Wilfred Monteiro www.synergymanager.net -all rights reserved SYNERGY MANAGEMENT ASSOCIATES since 1993 Designing Business Excellence Models Corporate Planning & Strategy Summits Change Management Initiatives Business Leadership Development Performance Management Systems

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