Qn 1: Where are you going to play?
Qn 2: How are you going to win?
The first question requires you to define the world in which you will participate – your target customers, the products and services you will offer them, the channels you will offer them through and your geographical reach.
The second question asks you to articulate how you will be #1 in your chosen world – what you will be famous for, how you will gain an edge over the competition and which capabilities you need to succeed.
Three critical things to remember:
- Your world does not have to be the world. It could be the UK, or the North West, or Manchester, or even Eccles. And you don’t need to focus on everyone. You can target women, or women under 30, or women under 30 with a family. Well, you get the picture – have you defined the world in which you wish to play? And if you have, how attractive is it?
- You do have to be #1 in your chosen world. Only market leaders succeed and generate adequate returns and growth. You have no choice but to be #1, so do you have the capabilities and points of uniqueness that your customers value? And can you deliver them in a way that allows you to generate adequate profits?
- The two questions are inter-linked. As you answer these questions it becomes clear that you need to answer both at once. Your chosen market helps define the types of competitive advantage you need, and your capabilities help determine the markets in which you can succeed. It is an iterative process.
Only when you have crisp, focused replies to these two questions are you likely to have a strategy that has a chance of being delivered by your organisation.
Worryingly, many executives struggle to come up with a clear response, although, unsurprisingly, they tend to lead organisations that are struggling to succeed.
© Stuart Cross 2010. All rights reserved.