When managing your business strategy, a good place to start is to assess what you are not doing and what you would like to do with the company going forward. The essence of any strategy development should be about coping with the competition.
“Sound strategy starts with having the right goal,” says Michael Porter, Founder of Monitor Deloitte, a multinational strategy consulting practice that specialises in providing consulting services to senior management in large organisations and governments. He is also the Bishop William Lawrence University Professor at Harvard Business School.
Porter specialises in business and economic strategy and has various models such as “Porter’s Five Competitive Forces That Shape Strategy” which determine the long-term profitability of any industry. These five forces govern the profit structure by determining how the economic value it creates is distributed.
Only by understanding the Five Competitive Forces can a company incorporate industry conditions into strategy.
Porter reiterates the fact that when developing a strategy for business, it is not about who is the biggest, it is about who is the most profitable.
While it is always daunting to develop a strategy, especially as a start-up looking to get their foot in the door, so how do you know the difference between good and bad choices?
Developing a feasible strategy should be about making smart choices that lead to sustainable and superior performance.
When developing a business strategy, it may be difficult to differentiate between the finance/operational side and the leadership/corporate culture side of your business.
While most businesses will seamlessly integrate the two as a working whole, it is important to assess all the cogs in your business operation. This will help you see what your organisation is not doing and determine what you would like your company to be or do in the future in order to sustain profitability.
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