Business Strategy 101: For Real

So, it’s taken me a long time to really understand the business planning and strategy process. I keep on finding bits and pieces as I go through different marketing problems at work. And typically I keep on going back again and again to the quickMBA website.It’s possible that I would have learned this all in a real MBA program, but I guess I’m from the school of hard knocks when it comes to Strategy (even though I know that’s an incredibly ironic statement).

There’s a really good textbook, that I read when I get bored (read: over vacations only) on it called: Strategic Management: Concepts and Cases by Thompson and Strickland. It’s honestly the best one I’ve found… most books glance over the details or present one paragraph on a topic as important as Mission or Values, without giving you a really deep understanding of how they relate to each other and the context and importance of them.

Basically… what I think happens when somebody starts a company is that they look on the interwebs for a list of possible missions and values and just pick ones that sound good. Maybe they revisit them once they are up and running and then backfill what they think their mission really is or what values have seemed to develop. 

I get it…I did this when I first tried to start a company…

but fortunately I got into an accelerator program and learned about some new, “thought-leadership”, principles like customer development, business model canvas and lean startup framework. Now as great as that was for developing a new company it leaves you hanging with respect to implementation in a stable small to medium or even large business.

But… I FINALLY  got the whole picture!

Note: This might be a little bit directed towards B2B companies and hardware companies, but it’s the same principles

The three areas are:

  1. Strategy Development/Formulation
  2. Strategy Implementation/Execution
  3. Evaluation and Control

Development/Formulation

  • Set your mission and values
  • Create a goal and a Big Hairy Ass Goal (BHAG). This is revenue or profit related; could also be Market share or some other metric though…
  • Then do a quick Strength, Weaknesses, Opportunities and Threats (SWOT) evaluation. Quick because you want to get your thoughts down, but you’ll really be filling this out through the formulation process.

  • Then do your Market Research, Secondary first because then you be intelligible enough about the market to do some damage in the Primary interviews part.
  • Secondary – canned reports or come up with reports from available online sources (Analyze and process this information to death)
  • Primary – Voice of the Customer (VOC). This means interviews with:
    • Sales
    • Marketing
    • Distributor
    • Customer
    • Production
    • Engineering
    • Service
    • Aftermarket
  • Get to know your competition with environmental scans or PEST analyses. This means really look at what products you offer and compare to what products they offer and look at what markets they are targeting and compare to what markets you are targeting
  • Pick your Positioning. Where do you want to be with respect to your competition; what is the biggest two value propositions you want to offer and how strong do you want to offer them. This is basically the one thing that you will preach that you do better than anyone else.

  • Then do Marketing Segmentation
    • Industry
    • Job Title
    • New or Upgrade
    • Company Size
    • New or Repeat Customer
    • Location 
  • Pick a Target Market from your Market Segmentation
  • Develop a Customer Profile – Yes, you need to do a deep psychological, socioeconomic profile even if you think it’s stupid or “fluffy” because your sales people will be able to look at a prospect and “profile” whether they will be a good customer or not and be able to prioritize their time accordingly 
  • Then do an Ansoff Matrix. Pick out what your situation is or what you want it to be. This is also know as GROWTH STRATEGIES.

  • Pick how you want to go to market with Porter’s Generic Strategies. This should be pretty simple because you should know from your historical supply chain and operations financials whether you can be a cost leader or not, then you have to pick whether you’re going to differentiate broadly meaning without focusing on a particular market sub-segment or not.

  • Then do some serious planning of marketing tactics with Marketing Warfare.

Implementation/Execution

  • Now you are getting to the meat of marketing tactics with the 4 P’s (even though they are up to 7 or 8P’s now I stick with the basic 4P’s)

  • Product (this is a HUGE topic, but won’t go into it all today)
    • VOC
    • Product Portfolio Management
    • Derived from Customer Profile and Needs of Customer
    • New Product Development (NPD)
  • Pricing
    • Special Pricing (much more important in B2C than B2B which is why I don’t have as much to talk about here)
  • Place (Distribution)
    • Sales Process
    • Second top priority after Sales Messaging in the next P category – Promotion

    • Sales Training
    • Create Customer Lists (probably already done when you did Market Research)
    • Develop Unique Selling Propositions
    • Develop Product-Feature-Benefit
  • Promotion
    • Sales Messaging
    • Sales Messaging is SUPER important, if you don’t create a strong message all of your work here is pointless

    • Test the Market. This is the new “thought-leadership” stuff I talked about. Do lots of test landing pages with A/B testing to fine tune your message
  • Choose Channels
    • Trade Shows (B2B)
    • Content – Blog (the key missing “link” that people don’t get between getting on the first google search page and “traditional marketing”)
    • Advertising

      old school, but necessary, don’t do anything more advanced than this before you do this, yes, even before a website – do the digital, industry magazines, brochures etc FIRST

    • Website
    • SEO (you need a website, a blog on your website to accept backlinks, and social media to drive your backlinks in order to get on the first page of google)
    • Social Media
    • Marketing Automation (more advanced but becoming vital pretty quickly)
    • Viral Shock Marketing (untested but interesting)
    • Viral Marketing (same as viral shock, but a little bit more studied)
    • News Jacking (controversial, but effective)
    • PR (best way for a start-up to market)
  • Evaluation and Control

    • Metrics
    • KPIS
    • Change Management

      Change Management is the MOST important thing you will ever understand about business in your life

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      6 thoughts on “Business Strategy 101: For Real”

      1. You’ve put together a very comprehensive plan but I have a couple thoughts you might want to consider. You start your plan with what appears to be an assumption of your product and then use research to best position it. I’ve found success in starting with the research to understand the needs in the market and then creating the product offering to truly meet those needs. The additional research can help refine the product concept and implementation. My other thought was primarily about your presentation. The concepts you present are good, but you show them almost as if they are a checklist on how to launch a successful product. I’ve consulted a lot of businesses that wish the process were that simple. You will find your most important skill will be the ability to be flexible. Hope that helps.

        1. Hi Steve,

          I think her point of view is a result of having a narrow-enough point of view to begin with, rather than being open to a larger set of possibilities. Her view is in contrast with companies that are more opportunistic, meaning their core competencies are product-agnostic. The product-agnostic marketing companies tend to depend on scale, and have lower margins.

          Since I’m more about brands, I’m interested in people who are passionate about a particular product or way of doing things, because it’s harder for someone else to really duplicate and it means higher margins on each sale (other things being equal). This blog post would seem compatible with this way of doing things.

          #janitorwisdom

      2. Hi Sarah,

        You did a nice job covering the bases and I particularly like how you sequence activities/tools. If you consider this a process template and truly a “101” level then I am fully behind it. If you hope it is more then I am afraid you did exactly what you complained about what most business books do – “… most books glance over the details or present one paragraph …”.

        I like and continue to use basically all of the tools you propose but the devil is in the details. For example, many people use SWOT analysis but too many treat it like a “checkbox” exercise. In reality it is a very powerful tool that requires honesty, deep analysis and the will to do something about the items you identify.

        Or lets take Porters Generic Growth Strategies. It is easy enough to say “we are going to win by differentiation”. You have got to ask, what does that really mean? Do you differentiate by product features, product performance, the service you provide along with it, the way you serve the market , and so on and so on.

        I am all for lean startup, being agile and quick but if you want to create a powerful business strategy not just on paper but also to execute then you cannot underestimate the amount of effort and time that needs to go into it.

        Best,

        Andreas

        PS.: I recommend Philip Kotler and Kevin Keller, “Marketing Management” which has been my business and marketing bible for many years. It is in its 15th edition at this point.

        1. Thanks Andreas! I did envision this as more of a process rather than a deeper way of doing things. I definitely recommend the book, I did, because it goes deeper into the details.

          I think I need to understand SWOT a little bit more like you suggest.

          Also, I actually have that book, Marketing Managrment! I need to re-read it though!

        1. Saul,

          I think the business model canvas is VERY valuable! I think that it’s purpose is to test out whether or not your ideas surrounding revenue generation will actually pan out. If I were to fit it into the scheme I’ve presented here, I would put it into the 4 P’s Product category for testing assumptions on new offerings because this articles’ point of view is from someone developing strategy within an established organization with a core set of current products. BUT you’ll notice a few things that parallel each other. 1) primary research is validating your value proposition in the business model canvas and 2) picking a target market is validating who your customers are in the business model canvas. Something that the two frameworks could learn from each other is that the business model canvas needs to be smarter about how to compete and basic strategy needs to focus more on getting feedback from customers.

          However I remind you that the business model canvas falls very nicely into the “Product” tactic of the 4 P’s where you are growing the business with the Ansoff Matrix by trying to grow in an existing market. Any “new” product or service could use a healthy dose of feedback and validation with the customers.

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