Strategy

Everything starts with strategy! And at Fresh Cut, nothing is more fun and challenging than helping clients to develop a unique competitive advantage based on powerful strategic thinking.  Thousands of books have been written along with numerous methods and processes on business strategy.  But the one we’ve used over and over that’s been proven to harness strategic thinking is contained in a strategic primer from the 1980’s, that is still as relevant and useful as when it was first introduced to the world. We’ve used the simple strategic planning concepts from Kenichi Omae’s book, “Mind of the Strategist” over and over for a variety of different companies and products, and here are some of its most powerful concepts:

  1. The purpose of strategy is to maximize one’s advantage.  The object of strategy is to “bring about the conditions most favorable to one’s own side. Strategy helps your organization succeed in its purpose.
  2. Analysis is a cognitive process of breaking a complex topic into smaller parts to gain a better understanding of it. Analyzing means separating a situation into parts and examining the parts in an attempt to understand what is occurring. In business situations, analysis involves identifying business needs related to a situation, identifying critical issues and determining possible solutions.
  3. In business… the object of strategy is to bring about the conditions most favorable to one’s own side. Besides the habit of analysis, what marks the mind of the strategist is an intellectual elasticity or flexibility that enables him to come up with realistic responses to changing situations, not simply to discriminate with great precision among different shades of gray.

    Four Strategy Paths

    stratthenkStrategic thinking and strategy formulation is about achieving competitive advantage. If there were no competitors, there would be no need for strategy. This fact suggests that the most important strategic issue is competitiveness.

    A company can tolerate certain internal deficiencies, but firms cannot survive competitive disadvantages. Allowing the company position to deteriorate vis a vis competitors means the company’s fate is determined by the competition. People think differently when they face competitive survival. This changes their focus.

    They recognize that the best is the enemy of the good, and possibly the friend of the competition. Good enough is GOOD ENOUGH. There’s no point in looking for the perfect strategy or the perfect competitive situation. The object is to gain an advantage over the competition at a reasonable cost. Do that often enough and you will win. This can be accomplished in four different ways:

    1. Re-allocate resources.  Every industry has one or two factors that determine business success. No matter how complicated the industry may seem, at its heart it is simple…The critical factors in an industry can be identified several ways…Once you have identified the key factor for success (KFS) in your industry, re-deploy your resources to focus on building strength in that key factor.

    2. Focus on exploiting one’s relative strength. Examine your product and identify areas where you can focus on achieving a relative advantage…The corporate strategist who relies on relative strength should think through competitors’ likely reactions to each move, and prepare to defend against those reactions.

    3. Redefine the key issue of the business by taking a bold action. Simply put, this is about asking “Why” to test every assumption that is ordinarily taken for orthodox wisdom in your industry…Keep asking why. Great breakthroughs come from answering this question.

    4. Exploit any degrees of freedom to act…take advantage of strategic degrees of freedom. Having identified the key factors for success, precisely identify what courses of action may be open…Strategic planning and strategic action should proceed in the areas where the company is indeed free to move.