If You Do One Thing With Your Strategy - Differentiate

There is a critical strategic component that is often completely misunderstood, even ignored all together.    The requirement to differentiate through the conscious act of making trade-offs.   A winning strategy is by definition different from competitors and what makes it different should be clearly understood by your organisation. 

This is why so many strategies fail to deliver, because they aren’t strategies at all, simply dressed up business plans.   For example, To improve margins by 2%, or to increase market share by 3%.   There are three things wrong with these kinds of statements.  The first is they are outputs not inputs; they are consequences of doing something, and the doing something is the really interesting area to explore.   Secondly these are operational improvement targets, not strategic objectives.   Thirdly they fail to say anything about distinctiveness. 

Some examples of strategic discrimination. 

1. Virgin Atlantic’s decision to only fly long haul.  To not be a budget airline.  To always benchmark there business (upper) class against other airlines first class, but price against their business class fares.  To include extras in the offer (in all classes) that other airlines don’t. 
2. Dell’s decision to never open third party channels to market.  It seems obviously right now, but the direct model was derided for some years as being ‘to simplistic’ for sophisticated purchasers.  They are now the largest PC seller in the world. 
3. Toyota’s organic, rather than acquisition growth strategy.  The world’s most profitable car manufacture hasn’t made an acquisition for over 20 years.  On current forecasts they also become the biggest in the world sometime in the next 18 months. 

By saying what you won’t do, is as important as what you will do.  And what you will do must be done distinctively; otherwise you end up competing on price, what Proctor and Gamble refer to as ‘commodity hell’.  Their aggressive strategy in buying up premium beauty brands is because own-label supermarket brands (so far) can’t penetrate that market space. 

SalesPathways help organisations develop distinctive strategies.  To find out how please call:

Lynn Joy
T:  01789 734400
E:  lynnj@salespathways.com

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