Strategy – How Small Businesses Can Win

Strategy – How Small Businesses Can Win

As a subscriber to the Harvard Business Review (Harvard Business Review – Ideas and Advice for Leaders (hbr.org)) we are always interested in how the articles from distinguished business academics can be applied in a pragmatic and profitable way to small businesses.

Strategy is often over-looked by small business owners as they rush to get their products and services to market. But integral to success is planning. Planning should take the form of a business plan and within this plan a strategy must be planned, constructed, communicated, and executed to win with your business.

We have been recently re-reading articles from HBR on strategy:

Michael E. Porter: What is Strategy? (Harvard Business Review November – December 1996).

Michael E. Porter: Five Competitive Forces That Shape Strategy (Harvard Business Review January 2008).

David Lancefield: How to Communicate Your Company’s Strategy Effectively (Harvard Business Review November 2022).

A few key points from these articles:

• ‘Strategy is the creation of a unique and valuable position, involving a different set of activities. (Porter 1996). You can serve the needs of many customers, you can serve the broad needs of few customers, and serve the broad needs of many customers in a narrow market. What does your business do? Trying to serve all three needs is risking failure. Keep focussed.
• ‘The forces that shape industry competition’ (Porter 2008). These are (i) rivalry among existing competitors and then this spins off to (ii) threat of new entrants (iii) bargaining power of buyers (iv) bargaining power of suppliers (v) threat of substitute products or services. Do you know the competitive forces that impact on your business? Consider the following: position your business where the forces are weakest, exploit changes in the forces, or reshape the forces in your favour.
• ‘…communicate strategy comprehensively…’ (Lancefield 2022). If you have a strategy do people know about it or what is stands for? Try these steps: (i) visualize your ambition (ii) describe the contribution you want to make (iii) challenge the status quo (iv) instill belief in your business (v) focus attention on what matters (vi) outline what will change (vii) set out the metrics (viii) explain the thinking, logic, and evidence that supports the choices (ix) describe the process. A strategy is worth nothing without engagement, empowerment, and execution.   

If you need support with your business plan and/or strategy, then please get in touch.