Smart Business Strategy is the Key to Success
Written By Melisa Marzett
Published On October 23, 2018
In 2004, Mark Zuckerberg founded Facebook; he was not a discoverer though. Dozens of social networks had already existed with millions of dollars in investments and the membership in the thousands. However, he managed to create one of the most popular social networks on the planet.
How did Facebook manage to define bigger and more financed competitors? The answer is simple — it is a matter of advanced strategy, which has become a major advantage with years. For more info Check Into Cash
What is a strategy?
If you ask this question to a small group, you will likely receive very different answers. For example, the author of the widely known tractate. The Art of War, Sun Tzu says about strategy as:
“All men can see the tactics whereby I conquer, but what none can see is the strategy out of which
victory is evolved.”
In present-day management theory, term “strategy” appeared in 1960s, however, representatives of east philosophy were the first who began using it in their works.
Henry Mintzberg, a professor of McGill University is considered to be one of the heavyweights in modern strategic management. He suggested 5 different versions of this term in his book “Strategy Safari: A Guided Tour through the Wilds of Strategic Management”:
- 1.Strategy as a Plan;
- 2.Strategy as a Pattern;
- 3.Strategy as a Perspective;
- 4.Strategy as a Position;
- 5.Strategy as a Ploy.
At first sight, these definitions are very different; however, all of them are linked through their shared meanings of working towards desired goals under uncertainty.
A strategy is an answer to the question «How? »
A supreme goal of any business isliving up to the potential of an original idea fully to create a working business model. Many entrepreneurs often make the same mistake: take on an improvement of products, without paying due attention to vision (laconic and inspiring statement of how a top-management sees a development of business in the near future) and strategies (strategic vision plan).
Strategic pyramid: a vision — why, a strategy — how, a product — what?
Vision and strategy are the main components of the pyramid above; even the best product cannot stand up to competition on the market without accurately achieving this pyramid. Vision is what helps to define long-range goals, and strategy is what helps to achieve these goals.
Strategy as a pattern
Any science is based on tribal knowledge. This also holds true for innovations.
“If I have seen further than others, it is by standing upon the shoulders of giants”,
— Isaac Newton.
In order to observe his in order to observe his competitors, Sam Walton, an American businessperson, founder of Walmart and Sam’s Club chains travelled a lot. He drew ideas from what he saw in order to best practice in his shops. Google followed suit and a model of AdWords auction system from his competitor Overture.
In 1831, Darwin embarked on a round-the-world cruise on a «Beagle» ship, and had a book with him titled as Principles of Geology by Lyell. He returned in 5 years with a huge number of materials, which confirmed the scientist’s ideas. However, the main treasure Darwin brought home with him was his assurance that all species of plants and animals go through a long process of gradual non-stop changes leading to new species to appear as a result.
By sheer coincidence, Charles Lyell, due to whose influence Darwin wrote the main work of his life “Origin of Species” was criticizing the evolution theory for many years.
Many innovative business models were built in ideas borrowed from other spheres of industry. There are many examples in the history of a company that releases an improved version of an already existing product, which turns the company into an industry. To borrow an idea and to borrow a strategy are two different things.
Strategy as a differentiation
Someone else’s idea can mobilize you into developing a strategy, but one way or another you will have to think about how your product is going to be different from the nearest competitors` product.
The definition of insanity is doing the same thing over and over again and expecting a different outcome.
— Albert Einstein.
The Facebook secret was connected with its users: Zuckerberg understood that people like to communicate; however, a modern rhythm of life makes it rather difficult. Zuckerber decided that to remove all the disadvantages is the way to create a new social network but to not to follow the example of his competitors. Harvard’s campus served as the perfect Petri dish for conducting several experiments into perfecting his product.
In order to open a secret of one`s own and understand sooner or later, what your «dishonest advantage», is all about, you need to study not analogues of your products only, but, perhaps, their anti-analogues. The concept of anti-analogues described for the first time in “Getting to Plan B: Breaking Through to a Better Business Model” book by Randy Komisar and John Mullins, is about learning from the negative experiences of competitors and-bringing innovative products to market.
After understanding the importance of having a vision for your business and developing of strategy, the question remains on how to develop your own successful strategy.
How to craft a strategy of one`s own?
Marketing specialists of Toyota Company suggested the approach described below. It is simple to implement and any burgeoning entrepreneur can use it.
Split columns, «Current reality» and «Future reality». Fill in the strategy from up to down, left column goes first, and then goes the right column.
The left column, «Current reality» allows analyzing the current situation.
- 1.The backgroundis a prehistory. Formulate what you want to achieve.
- 2.Сurrent Condition is a current situation. Describe the existing state of affairs; break out problems and disadvantages of your business.
- 3.Root Cause Analysisis the main reasons for analysis. You have already filled in two fields and know what you want to achieve and what you have achieved by now. Think about the reason for your failure. What do you miss? Why your business is not a success?
The right column, «Future reality» helps strategy definition.
- 1.Goal. Your goals will be based on the previous conclusions.
- 2.You begin to formulate your future strategy of development with a goal setting.
- 3.Implementation Plan. Think about how to implement target goals. Do not over-focus on global, write down specific, realize for the moment measures only. Initially, Facebook was a social network for learners from one colleague and gradually integrated a system of others education institutions. It is unlikely that Zuckerberg planned on Facebook to become a chain with millions of registered members someday.
- Follow-on Strategies is follow-up actions. If you are going to be on top of a situation, what are you going to do next? Achievement of minimal success is only a step to your goal. You can explore on how to gain entry into other markets and bring in add-on products.
Using this approach, you will be able to develop a strategy and destroy that strategy for many years to come in order to achieve success.