In short, it can be said that having a strategy means that when the set of our decisions is seen, we can see a certain pattern in them. But strategy and strategic management are words whose meaning you hear in a thousand ways and narratives.
In the world of management, the word strategy or strategic adjective is simply added to the first and last of many management words.
Strategic planning , strategic management , marketing strategy , strategic choice , strategic interests and strategic resources are only examples of these terms.
If you are the manager of an organization, you are constantly forced to talk about the strategy of the organization. You will also have to defend your decisions as strategic decisions over and over again.
However, the frequent use of the word strategy does not mean that our activities and actions and decisions are also strategic.
With a little look around you, you can see many managers who, despite the constant use of the word strategy and holding numerous meetings about strategic actions, in practice have become an ordinary operational manager and are caught up in the daily routine.
Most of the daily time of these managers is spent writing letters and organizing administrative correspondence, making daily phone calls, signing salary checks and financial documents, and controlling the business’s daily operating indicators.
Definition of strategy
Strategy means making clear and accurate decisions about how to compete with others, or in other words, to do what others do with fewer resources and do things that no one else is doing.
Of course, keep in mind that producing cheaper is a competitive position, and in order to have the right strategy, specific planning in order to differentiate is very important.
Although being cheap is a generic strategy, Japanese automation and low-cost production methods in Southeast Asia are not very acceptable because sooner or later automation and technology will be available to others and cannot create a long-term competitive advantage, so it cannot be Accept technology as a sustainable advantage.
In other words, cheapness is valuable when it is difficult to imitate and in other words it can be considered a serious differentiator.
Strategic actions
Strategic action and behavior means that we choose a specific subset from the set of different behaviors and actions and options and decide not to choose other options.
But usually, when we are faced with several options, as a first attempt, we think to ourselves, is it possible to behave in a way that uses all these options?
For example, remember the last wedding or dinner party you attended. Most people see many options on the table and instead of thinking about which dish or dessert they like the most? They think about how much of each food they should take so that they can eat a little bit of all the foods they like.
People with the same mental model enter the business environment and many decisions in the business environment are made, like the choice of food on the table.
So it’s important to note that you can’t always fill your dinner plate with a portion of all the good options. Many times, we have to accept that the plate is small and the variety is large.
Removing the jelly should mean giving up the caramel cream. Just like the salad plate, there won’t be much room for the cream cake. Besides, the desserts and foods that are mixed in one plate, none of them have any taste or properties.
Strategic choice
A few years ago, Harvard Business Review published an interview with world chess champion Garry Kasparov , in which he tried to explore the similarities between chess and business strategy.
The similarities between these two fields are not few, and if you think about it yourself, you can probably find many examples that make chess understandable and acceptable as a metaphor for strategy.
But besides these discussions, Garry Kasparov raised a very important sentence in this interview and said that in professional chess games, the number of moves is usually so large that you and I can no longer calculate the moves accurately. So here, the only thing that can be done is to rely on intuition.
In other words, we should not expect that in strategic decision making , all options will always be presented and discussed in a completely dry, precise and logical manner, and expressed in an understandable and documented way on paper or in words.
It is not unlikely that experienced managers rely on their intuitive judgment in some strategic decisions.
The business world has a serious difference from the chess board, and that is that in the business world, the board is not as stable and stable as it should be, and of course, sometimes the wind of government rules and regulations shakes the pieces, and sometimes they change. The exchange rate will turn our soldier into a minister in the middle of the game before reaching the end of the line, or the opponent will quietly and silently touch our pieces and play with them.
So it can be said that strategy and strategic choices are like the permanent choice of the rudder of a ship. Everything else that is done on the ship is an operation, and managers who are overwhelmed by operational tasks leave the direction of the ship and the destination of the ship in the hands of the winds. This issue ultimately leads to three key and clichéd questions in the field of strategy.
where are we
Where do we want to go?
How are we going to get there?
The appearance of these questions is much simpler than their answers, and in fact, the skill of a strategist is to find answers to these three questions and even more precisely define these three questions.
The concept of strategy
One of the tasks of the organization leader is to teach his colleagues the concept of strategy and the importance of saying no. Strategic decisions are not simply a matter of doing, and discerning what not to do is as important as what to do.
Note that strategy does not mean doing our current activities better. It means that if we get more output with a fixed input, it is a very good thing; Or that we can do better today what we did yesterday, it’s great; But none of these are considered strategies, but all of them are operational effectiveness.
Strategy does not mean working better ; Rather, it means doing something different from others; A work that others simply cannot imitate.
Developing a strategy
Formulating a strategy is actually the process of determining the goals and strategic plans of an organization. At the time of drafting the strategy document, you should remember that position, expertise, appropriateness and strategic decision are the 4 key factors in drafting a successful strategy, which we will examine further.
1- Strategic location
Strategy means that your business has found its own special place in the market . A place where you don’t have many competitors or ideally, no competitors at all.
Also, the successful strategy is to define your position in such a way that others cannot imitate it, even if they wanted to.
In the following, we will examine three types of positioning together.
Positioning based on product variety
In the sense that the business is focused on a specialized but diverse subset of products and services in an industry.
For example, consider a travel agency that organizes only domestic short-term tours of one or two days among all domestic and foreign leisure tours. But it tries as much as possible to offer all the diverse products imaginable in this field and has a very wide portfolio of products.
Positioning based on the needs of a group
In the sense that the business selects a specific group of customers and tries to meet the diverse needs of that group.
For example, Ikea can also be included in this category. Because this company has considered young customers with not very high income and interested in modern design and style and tried to consider the needs of this group in home decoration and design.
Positioning based on access method
In the sense that the business offers its product or service only to a group of customers who are accessible through a specific channel or in a specific space.
For example, a chain store should only establish its branches in cities with a population of less than 200,000 people.
Or a training center offers all of its training in physical form to those who want to attend face-to-face courses.
It is necessary to explain that the above positions can be combined with each other. For example, the position of a clothing chain store can be based on a combination of product variety and accessibility. For example, we can refer to all kinds of sports clothes in roadside stores.
2- Strategic expertise
If you choose your niche carefully and specialize in that field, others cannot simply imitate you.
For example, suppose that a clothing store chain becomes a road sales specialist and gradually learns all the details of this game.
So when you define your position or position accurately, you can be very professional and deep in designing and implementing activities that fit that position.
3- Strategic fit
It is important to note that for the success of a business strategy , each activity must fit with the main strategy. In other words, in a strategy-oriented company, even if a lamp is chosen for the ceiling, the type and power of the lamp should be chosen according to the company’s strategy.
For example, IKEA, which has chosen its target customers from buyers of modern design with low prices, has established strategic fit as follows:
- If the buyer does not have a high income, then he is ready to tighten a few extra screws himself and pay less for the purchase.
- If the buyer wants not to pay a lot of money, he should enter the warehouse and pick up the product himself.
- If the buyer doesn’t have a high income, they don’t have the budget to pay the designer. Therefore, the items in the stores should be arranged in such a way that the buyer can get ideas for their arrangement without needing a designer .
- If the buyer wants to pay less, the packaging should be flat to fit in a car or small van and pay less.
4- Strategic decision
Don’t be afraid to choose and remember that to pick up one thing, you have to put down something else.
Many managers are afraid to choose. That is, they cannot accept that choosing one option means abandoning other options. They are so afraid of missing out on opportunities that they avoid making decisions and making strategic choices. They want all the good things together and in the end, nothing gets their hands on it.
Keep in mind that focusing on the customer and the needs and wants of the customer does not mean accepting all the wishes of all customers. You have to say no to many requests from many customers in order to give a solid yes to some requests.
Considering this point, it can be said that it is the courage to choose that distinguishes strategic businesses from ordinary businesses.
Has there ever been a point in your business where you made a brave strategic decision and said no to a temptation? We are happy to join you in this discussion and share your views with us.
