SGG

‘Strategic Global Group (SGG) establishes your Competitive Advantage’.

There is a lot of empirical and also tried and tested knowledgeable work that has both been published and practiced about strategy. It is a subject that most leaders, entrepreneurs, VP’s, directors and C levels will encounter, and certainly if in a start up, or development and expansion program of an ongoing business, strategy will be crucial to the success of any future business diversification.

Much has been written about the subject matter and it could be argued that Michael Porters1 books on Strategy are the father of all books on strategy. However, in Porters voluminous book on Competitive Advantage, Porter professes that Competitive Advantage is at the heart of a firm’s performance in the market place. Simply put the following reason is why you should understand this strategic style. Competitive Advantage equals revenue and revenues [should] equal profit.

Porter also states that many firms loose sight of Competitive Advantage in their efforts to clamber for growth and diversification. I have to concur with this statement as I have seen from my past experience with Multi-Nationals Corporations (MNC) and also start-ups with ill-conceived business plans, to those Small Medium Enterprises (SME) firms that have grown, but for reasons we will look at in this series, do not continue to grow and prosper, but stagnate and sometimes, even contract.

Tom Schleifer2 stated in Constructor Magazine “[small and family] businesses suffer from a lack of clearly defined objectives or from no long range strategy at all; goal setting in family [SME] businesses is sadly lacking.” This point too, I have encountered in some of the SME’s that I have contracted with. It often begs the question; can owners of SME’s actually be good managers? One example I encountered was with a business that has been relatively successful for just under three decades. They reached a plateau in their annual revenues maintaining the same single $M figure for the last seven or so years. A marketing executive I was discussing the business with, clearly was alerted instantly to the fact that, after that time period, then something was clearly wrong with the ongoing business model. There was, and it came down to the owners inability to determine what Competitive Advantage the firm had, and how best to exploit it.

It is issues like this enticed me to look more deeply at Competitive Advantage and attempt to understand it better. As with most academic and experience enlightenment, I would love to go back to some of the firms, both MNC’s and SME’s and redo their strategic development. The saying of; “if I knew then, what I know now”, never rings more true. Doing your homework to find your Competitive Advantage associated to strategic planning and implementation is paramount to your success, growth and revenues. In an attempt to outline this process simply, I will use a couple of metaphors to describe this point of view.

Building a strategy is akin to using a GPS (SATNAV). Yes, you most definitely need to know where you are now. Knowing what your Competitive Advantage is now, in relation to your firm’s capabilities and your competition, gives you a starting point. Once you know this, only then can you clearly define where you need to go. This is because you will then have better visibility to define your Competitive Advantage verses your competitors. You will be able to build a plan of what you need to do to exploit your Competitive Advantage and find the path(s) to the goal(s). This is especially important in today’s global economies, if you intend to establish foreign direct investment, international distribution, establish global trade or markets, plan development of the firm or introduce new product sales, this path is only defined by knowing how to deploy your Competitive Advantage, the ‘where you are now’, the beginning, and the ‘where you want to go to’, the end. How this path is defined is by properly applying values, resources and imitability along with organization capabilities in conjunction with competitive forces. Be they in domestic or foreign markets or distribution networks.

In my following articles it is my intention to explain, how you can accumulate the resource based view and competitive forces knowledge, and how this can be effectively used. This methodology has always been a good recipe for strategic planning and implementation success. How your path is selected, these resource based views and competitive forces will always – in some part and without exception – be affected. 
In using a second metaphor, understanding where you are, sets the [strategic] border of the puzzle. How you complete the puzzle, apply the strategic path to achieve the required change is in clearly identifying and promoting your Competitive Advantage, as well as implementation and measurement of the strategic plan. In effect, this defined Competitive Advantage lays out the pieces that help you to complete the [strategic] puzzle.

In the next article (#2) in this series we will start by looking at the ever faithful, much used and abused, SWOT box.

References

1 Porter, M. (1985) ‘Competitive Advantage’ The Free Press (NY, USA) 1st Ed.

2 Rivers, W (2009) ‘Separating the Roles of Owner and Manager in the Family Business’ Available online at: http://tinyurl.com/patt4w9

 

‘Strategic Global Group (SGG) establishes your Competitive Advantage’.

 

Author: Phil Wilton has worked in MNC’s as well as developing start-ups and business expansion for SME’s. He received his MBA in International Business, Strategy, Marketing and Emerging Markets from the University of Liverpool. He also completed Business Strategy – Achieving Competitive Advantage at Cornel University.

Feel free to contact Phil (SGG) for a free intro consultation on how SGG can help your firm. philwilton@strategicglobalgroup.com 

All content © 2014. Permission to use with reference to author