How to Develop Your Business Strategy
I love the Michael Porter quote here because it’s so true, and more so the more you dig down into the front lines of real business, such as small business and startups.
Strategy is what you’re not doing. My favorite metaphor is the sculptor with a block of marble—the art is what he chips off the block, not what he leaves in. Michelangelo started with a big chunk of marble and chipped pieces off of it until it was his David.
Business strategy is focus
At the real-world level (my favorite), strategy is like driving and sex: we all think we’re pretty good at it. But simplifying, doing today what will seem obvious tomorrow, is genius.
I say the best strategies seem obvious as soon as you understand them. Furthermore, it seems to me that if they don’t seem obvious after the fact, they didn’t work.
Strategy has to be easy to define. I like the simple LivePlan method, which I explain here. But aside from that one, I’ve also worked in depth, during my consulting years, with several competing strategy frameworks, and every one of them works well if it’s applied correctly and executed. And furthermore, I say you can also define strategy with a simple summary, story, or a small collection of stories, which I’ll also explain here.
- The LivePlan simple strategy method
Think of it as the heart of the business, like the heart of the artichoke. It’s a group of core concepts that can’t be separated: problem, solution, market, and identity. Don’t pull them apart. It’s the interrelationship between them that drives your business.
The problem you solve
We forget too often, so start with this: Your business is not about you, what you like to do, or what you want from it. It’s about your customers. And, most important, the problem you solve for your customers.
Theodore Levitt changed marketing with his pivotal piece “Marketing Myopia,” which includes this important reminder:
People don’t want to buy a quarter-inch drill, they want a quarter-inch hole.
And this also famous quote, about railroads:
They [the railroads] let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business.
Real businesses solve problems and to develop an effective business strategy, they have to know what problem they solve. For a social media company that posts updates for its clients, the problem it solves is not social media—it’s getting the word out, and getting people to know about their clients’ businesses.
Consider a bicycle retail store. Maybe it solves the simple problem of where to buy children’s and family bicycles, service, and accessories, which is one problem. But maybe it solves the problems of the mountain bikers and racers who want a lot of expertise, specialized bicycles, equipment, and know-how, which is a different problem.
You also need to understand what business you’re in. The bicycle store might be helping families with kids bicycles as they grow, or it might be offering real expertise to the serious bikers. Those are different businesses.
- The solution: Your product or service
Your solution to that problem is your product or service. Focus on the true desired end result for your customers—the holes too, not just the drill.
Take the bicycle store for example. One solution is a bike store catering to families with children and casual bikers. Another very different solution is a bike store catering to bicycle enthusiasts, such as serious mountain bikers and racers. It’s not just a bike shop; it’s a general bike shop, or one for families and hobbyists, or one that caters to serious cyclists.
That’s strategy at work.
- The market: Who buys your solution
Your identity influences your choice of target market.
The bike racing shop focuses on attracting enthusiasts, offering expensive high-end bicycles and equipment. The family-focused shop focuses on attracting parents with kids, concentrating on medium-level bikes, trailers, and family-friendly accessories.
Keep your business focused on specific target markets. That bike racer shop owner has to know his products are too expensive for the families, and the families bother the high-end enthusiasts in the shop. Likewise, the family bike shop shouldn’t scare away its target market with very expensive racing bikes.
Henry Abbey , a talented author who has a knack for creating stories that captivate and engage readers. He’s been writing since he was a child and tasted success with his first novel at only 19. His works are available to read on the businessdoom website, where readers can find stories of romance, mystery, and adventure from the mind of Henry Abbey.