Download - What is Business Strategy ?
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JONATHAN DONADO
Linkedin.com/in/jonathandonado
What is
Business Strategy ?
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Let’s begin … by asking ourselves
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… an Art
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It easier to start by defining what it isn’t a Strategy
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SOME COMMON MISTAKES:
Be #1 in our market ….Pursue a global expansion….Have unmatched customer
service….etc
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STRATEGY is NOT:
a TACTIC an OBJECTIVE or a GOAL a DESCRIPTION
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But, today Strategy is a common buzzword:
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Where does the word strategy come from?
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From the Greek word “Strategos” = The art of the
general
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Strategy can be found in the book “The ART of WAR”
by Sun Tzu (from 500 BC)
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Today, Business is seen
as a modern
day war….
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…challenges of a CEO are similar to an ancient General
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…a CEO needs to define a set of tactics to lead to
business “victory”
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How do we know what it is our strategy? How do we make one?
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A Google Search
provides the following
formal results
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?
So … is it a surprise we have misunderstandings about
business strategies?
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Or …. why do great strategies have no impact on the
organization?
?
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To blame: 1. A strategy that isn’t well defined?
… or 2. A lazy execution?
?
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A large proportion of failure is due to Strategy
definition and not in
the execution
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Strategy needs to influence Action…. So, in order to influence
Action, it needs to be Remembered….
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In order for a strategy to be Remembered…. It needs to be
Understood…
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In order to be Understood… a strategy needs to be SIMPLE
(if not it is a just a report)
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So, a Strategy needs to be: 1. Remembered 2. Understood
3. Simple
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Business Components
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Components Overview :
Where are we going? The future. The dreams.
Who are we as a company? What we do. Why we exist. Our purpose. Values.
What are going to do to achieve our objectives? How are we going to get there?
Vision
Mission
Strategy
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Example: Business
Components
Canadian
Intellectual Property
Office
https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03475.html
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Example: Mission
Vs Vision
From a philosopher
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Example: Strategy
vs Tactics
• Planning • Large Scale • Why • Difficult to Copy • Long Term
Frame
• Doing • Small Scale • How • Easy to Copy • Short Term
Frame
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Example: Strategy
vs Tactics
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So… Business
Strategy in simple terms
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A BUSINESS STRATEGY answers 2 questions:
1. How firms create value 2. How firms sustain value
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What is Value ?
What Customers are willing to pay What It cost the Company to produce it VALUE
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A Survey Says…
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70% of employees don’t understand their company strategy
Forbes “When CEOs Talk Strategy, 70% Of The Company Doesn't Get It”, 2013
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To make sure all employees understand the Business Strategy,
we need to make sure that it clarifies the following:
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1. Why Customers buy our products?
Need to Clarify Key Drivers
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Drivers to increase
revenues or lower cost are defined by Strategy
1. Key Drivers
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1. Key Drivers
Who are the people that make out target market ?
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1. Key Drivers
Value proposition
to differentiate our products:
1. Product Differentiation 2. Cost Reduction
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2. Identify Critical Challenges
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2. Challenges
Internal or External. Need to define top 3 to 4
obstacles to focus attention
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2. Challenges: Internal
What capabilities do we need to be the best in the market at delivering our value proposition ?
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2. Challenges: External
- What is the competition doing? - How is the market evolving? - Etc
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2. Key Drivers
Strategy Formulation
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2. Key Drivers
Strategy Formulation
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2. Key Drivers
Strategy Formulation
Porter 5 Forces
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3. Determine Must-Win Battles
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3. Must-Win Battles
Define battles that a company needs to win in the next 2 to 3 years to
overcome obstacles to value creation
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Why do
companies with good strategies
fail ?
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Let’s take the DOW JONES. It started in 1896. The companies were:
Not too many
known names
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DOW JONES 1976. The companies were:
Some names
unknown
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DOW JONES 2016. The latest group as of March 21 2016
Only GE remains since 1st
Index
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The “Strategy Trap” for successful companies:
Exploitation Get cash for growth
Exploration Find new wining products business models
FAILURE ? Companies
need to balance current
strategies with the
discovery of new ones
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FAILURE because
overtime as Companies
focus more on
Exploitation
The Strategy Trap for successful companies:
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1 / 3 firms become trapped in just a 5 year period
Exploitation
Exploration
FAILURE overtime.
Companies focus
more on exploitation
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7 / 10 firms can’t escape the trap
Exploitation
Exploration
FAILURE overtime.
Companies focus
more on exploitation
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Business Strategy:
Takeaways:
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Business Strategy
Takeaways
1. a Strategy defines how the company creates and sustains value
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Business Strategy
Takeaways
2. a Strategy has to be remembered, understood and be simple
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Business Strategy
Takeaways
3. a Strategy fails because companies focus on mainly in Exploiting instead or Exploring
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Testimonials
“Jonathan is a very experienced and highly skilled
executive… a great knowledge about both strategic and
managerial issues, with an international approach. He is
highly recommend as a leader, capable to motivate and
improve performance of his teams, and as a business
developer. And definitively, he is a person you can trust.“ Francisco Martinez
CEO
“Jonathan is a very results-oriented persons, a natural leader
and someone that makes his team really perform
efficiently.”
Eduard Fernandez Executive Director
Source: Linkedin.com/in/jonathandonado
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Contact Info
Linkedin.com/in/jonathandonado
Thank You
www.branded.me/jonathandonado
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