|
|
|
|
Competitive Strategy SummaryView Template for: Competitive Strategy Summary Within the context of the industry analysis which should be completed prior to this section, the purpose of this section is to make clear, without ambiguity, the competitive strategy of the business. First, within the context of the industry segmentation matrix presented earlier, in which segments will the business compete? Second, what is the competitive advantage the business has, or plans to achieve, in order to attain superior returns? Listing the competitive advantages the company has or plans to achieve in priority order forces the business to make decisions and select between alternative strategies. This helps avoid the we're-the-best-in-everything strategy which isn't too different from the very common we're-not-the-best-in-anything strategy. Competitive advantage refers to something the business can do more cheaply than competitors (i.e., a cost advantage) or something it can offer that is unique and will provide premium pricing and higher margins. Examples of factors which can be used for differentiation or differentiation focus strategies include: sales force knowledge; heavy advertising; product appearance; superior product design; product conformance; most convenient location; product reliability; linkages to other products; superior functionality; broad product features; superior client service; superior client training; product durability; brand reputation; superior dealer network; customer financing; compatibility; one-stop shopping advantages; and broad geographical scope. Examples of factors which might support cost leadership and cost focus strategies include: low cost design; superior automated assembly; global scale over which to amortize research and development; low overhead; plentiful source of low cost labor; superior training; cheapest telecommunications; lowest cost delivery system; and fewer features and fewer services tailored to buyers with fewer needs. In practice, this part of strategy development is the most difficult to reach consensus. This is because choosing the competitive strategy and the route to competitive advantage is the heart of the entire plan and has the biggest impact on resource allocation. The strategy chosen should be well communicated. It should not be a secrete. Resource allocation and other decisions should be based on the strategy. Advertising and other communications should reinforce the chosen strategy. Although there are certain conditions in which it is not appropriate to tell everything to everyone, the more common situation is that too few people, internally and externally, understand the business strategy. If you're the president or manager of the business or the person responsible for the strategic plan, then choosing the strategy and the route to competitive advantage should feel exhilarating. If, on the other hand, you're not in a position to re-allocate resources or implement bold and creative strategies, then choosing the business strategy should feel intellectually satisfying; pass the popcorn please. SUMMARY OF BASIC STRATEGY FOR SUCCESSAfter making the key decision regarding the firm's competitive strategy that will direct its route to competitive advantage that will determine its performance, this section provides an opportunity to state the reason for selecting this strategy. Or, as they say in the post employee-empowerment era, defend thyself you swine! In practice, besides explaining the basic strategy chosen, it is often useful to explain why other strategies were not chosen. Ideally, this should be done objectively and constructively, rather than stacking the deck as if the strategy chosen was the only viable option. |
|
Send e- mail to
webmaster@e-competitors.com with comments. Or
use Feedback.
|
