Best Practice
Business Strategy Do You Understand Your Company’s Strategic Landscape?
Ronald J. Recardo
is the managing partner of The Catalyst Consulting Group LLC. He can be reached at rrecardo@catalystconsultinggroup.org.
The best-designed strategic planning processes start with a data-driven analysis of what’s happening outside of your organization. The data can then be used to begin to formulate your organization’s preliminary growth platforms. There are five critical areas of focus: 1. Market Dynamics: One can easily get lost in a “forest vs. the tree” scenario if not careful. The most critical areas to focus on are
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collecting data that can impact the performance of your organization, such as inflation rates, energy costs and unemployment rates. Understand the cause-and-effect variables that can help you determine market segmentation. For example, if inflation increases X percent, revenues decrease Y percent. You typically want to focus on the largest markets with the highest growth rates and largest profitability.
For many of us, the strategic planning process is akin to a “black hole.” Meetings occur, and at the end magic happens and a three-ring binder is crafted or, worse yet, a plan is never formalized and stays in someone’s head. The most successful second-stage companies fully understand the value of strategic planning and appreciate that it is an iterative discovery process with inputs, outputs and deliverables.
2. White Space or Blue Ocean: The best place to “play” is in uncontested market space where you are the first to identify an unmet need. Think of Cirque du Soleil, which combined traditional circus with Broadway theatrics to command a premium price point that appeals to a much a larger audience, from children to retirees.
Key Success Factors
Rank
Market awareness
H
5
4
3
2
1
Brand strength
M
5
4
3
2
1
Distribution channels
M
5
4
3
2
1
New product introduction
H
5
4
3
2
1
Price
H
5
4
3
2
1
Customer relationship management
M
5
4
3
2
1
High
Medium
Low