Ian heller believes a valid business strategy has five components:
The first component of a valid business strategy is a clear description of your company’s current or desired core competencies First of all, he defines core competencies, which is something that a firm can do well and that meets three conditions : ‘’It provides consumers benefits’’, ‘’It’s not easy for competitors to imitate’’ and ‘’And it can be leveraged widely to many products and markets ‘’. A core competency can take various forms, including technical subject matter know how, a reliable process, and/or close relationships with customers and suppliers. He gives the example of the southwest airlines’ 4 core competencies (The lowest operating costs per plane, An economical point to point airport network, A fanatical culture focused on customer service and cost savings and an ability to keep planes in the air more of the time than its competitors) that it executes so well that it regularly beats all other US airlines in terms of profitability The second component of a valid business strategy is a description of how you differentiate vs. competitors. In our experience, differentiation is about being the best at something. This should be encapsulated in your mission statement. The question is : what are you going to offer customers that will make them choose your products or services so that you can grow your business? It takes a lot of hard work to come up with a great answer to this question and even more work to make that differentiation real. It’s easy for us to say that Southwest is the best low-cost airline in the US, but it’s extraordinarily difficult for them to pull it off. The third component of a valid business strategy is a description of the industry or industries in which you intend to compete. You need to be able to define just what kind of company you are – This step sounds easy but companies are often so concerned about getting too narrow in their focus that they fail to...
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