Mcgraw-Hill - Briefcase Books - ...

Mcgraw-Hill - Briefcase Books - Manager'S Guide To Strategy, SAMOKSZTAŁCENIE, Mcgraw-Hill [Briefcase Books]

[ Pobierz całość w formacie PDF ]
What Is
Business Strategy?
Packers coach is asked about his feelings about the game.
“We have a good game plan and our players, coaches, and
support staff are prepared and ready. I couldn’t be more confi-
dent of victory!”
On the other side of the field, the Bears coach says virtually
the same thing.
Then the game begins. Play after play, the coaches adjust
their game plans to reflect the circumstances. They keep using
plays that gain yardage, they keep going with defensive forma-
tions and tactics that prove effective, they exploit any weak-
nesses they find in the other team, they react to injuries or field
conditions, they make decisions based on the score and field
position and the clock.
In the end, the team whose coach best understands the
strengths and weaknesses of both teams and then strategizes
for all the possibilities and whose players execute the strategies
best will usually win. Then, after the game, both teams must
begin again to prepare for the next opponent.
1
P
rior to the Green Bay Packers-Chicago Bears game, the
2
Manager’s Guide to Strategy
The Game of Business
Business competition is very similar to sports. In business,
teams of individuals face each other in competition for employ-
ees, customers, product innovations, and profits—among other
goals. The major difference between sports and business is the
relevant time frame. (Imagine if teams in the National Football
League had to play each other every day, from nine to five, with
the lunch hour replacing halftime!)
As in sports, business organizations that win consistently
excel at preparation, planning, and execution. They know their
situation, know where they want to go, and determine how best
to go there. Maybe more importantly, these organizations have
their finger on the pulse of the markets, customers, technolo-
gies, and other innovations that may change the rules of the
game and the factors that lead to success. And these dominant
companies are willing to
adjust their game plans
accordingly.
Strategy is the busi-
ness word for game plan.
All businesses have strate-
gies, either planned or
unplanned. This book
explores how to find the
best strategy for your busi-
ness and how to use strat-
egy to drive successful
business results, that is, achieve your long-term goals.
The Power of Business
The essence of business can be depicted in a simple diagram
(Figure 1-1).
This diagram suggests that a business is a flow model, a
going concern. First, there’s the business idea that motivates us
to begin a business.
Strategy
A detailed plan
for achieving success, the
bundle of decisions and
activities that we choose to achieve
our long-term goals. Strategy is the
path we choose. Every organization
has to figure out what it wants to
achieve and then how it is going to
make it happen, with its products, cus-
tomers, and operations.
What Is Business Strategy?
3
Ideas
Assets
People
Property
Relationships
Income
Figure 1-1. A simple model of business
Let’s say we decide to use our grandmother’s recipes to
open a restaurant. We figure that since we all loved Grandma’s
cooking, others would too. In order to realize and deliver the
promise of the business idea, we must use a package of assets:
people, property, and relationships. We’ll need a location,
tables, chairs, china, silverware, and a lot of restaurant equip-
ment and supplies. We’ll need cooks, waiters and waitresses,
dishwashers, and other employees. We’ll need a liquor license,
public health certificates, and accounts with food suppliers of
meat, produce, and so forth. These assets must then generate
income, which is used to refuel the assets (buy more food and
pay the staff) and invest in new ideas to keep the business
going. Let’s examine each component of the model.
It all begins with a business idea. Now, a business idea is
more than just an idea. A business idea has two defining char-
acteristics.
First, a good business idea meets an unmet need in the
market. The product or service that we offer must satisfy a cus-
tomer’s unmet need. This may mean a brand-new product or
service or it may mean finding a way to provide a product or a
service at a lower price than is currently available. In the case of
our restaurant, the unmet need may be as simple as providing a
good place for authentic Italian food. Certainly, there are other
restaurants, and other Italian restaurants, but our idea is to
package the food, wine list, and ambiance in a way that will be
attractive to patrons.
4
Manager’s Guide to Strategy
Second, a good business idea drives transactions. Whatever
product we offer to customers, they must be willing to exchange
their money for our product or service. The test of a good busi-
ness idea is whether people will give up their cash to get our
products or services in enough numbers to keep operations
going. Our Italian restaurant idea, when communicated to the
public (by advertising and/or word of mouth), must create a
demand for hungry people to select our establishment for lunch
or dinner. The ultimate test is whether our business idea will
meet the unmet needs of
the market in a way that
customers will return,
again and again—and sat-
isfy our business need to
generate income.
Once we have a busi-
ness idea, we must assem-
ble the assets to construct
our business. Usually we
need money, financial capi-
tal. Also we need employ-
ees, human capital. Finally, we need relationships: with suppliers,
the government, customers, distributors, and others to make the
business work. Linking the business idea with the right asset mix
is what creates the power of a business and it’s that link that’s our
business strategy. So, while we start with Grandma’s recipes, in
putting together our plan, we must make many decisions and
undertake many activities. That is, we must construct our strate-
gy. The location, the market we target (families, upscale diners,
college students, and so forth), the décor we select, the pricing of
our entrées, our wine list, the training and performance of the wait
staff, the quality of the foodstuffs, and the preparation of the
food—all will play a role in our success.
These
strategic
decisions we make in building our organiza-
tion and business model are endless. The link between our busi-
ness idea and the assets we select is our business strategy. It
Business Idea
There are a lot of ideas
around, but they aren’t all
business ideas. A business idea has
two defining characteristics: it meets
an unmet need and it drives transac-
tions. In a way, both can be summed
up in the simple question, Do enough
people want what you’d be offering
enough to pay enough for it? Evalu-
ating those three “enoughs” is crucial.
What Is Business Strategy?
5
doesn’t matter whether we are operating a small restaurant or a
giant telecom, automobile, or chemical company; this coordina-
tion between the business idea and the asset mix we select is
the power of our business.
The result of our idea-asset connection is the income the
business generates. The lifeblood of a business is the cash flow,
which is used to replenish the assets and develop new ideas to
keep the business going. If an asset does not contribute to gen-
erating income, we should get rid of it! If, for example, we gener-
ally have unused tables in the dining room and yet the cocktail
lounge is crowded, we should consider reconfiguring the assets:
fewer dining tables, more
space in the bar! Later on
we will discuss how we can
develop strategies based
on the efficient and optimal
use of our assets.
The cash flow that our
business generates is the
source of keeping the busi-
ness going, investing in
new ideas and new assets,
and reaching our financial
goals. We can consider
revenue and income and
profit: all of these terms
reflect the activity of the
business. But, at the end of
the day, the most important consideration to the business owner
is cash flow.
Cash flow
The amount of
money we have left over at
the end of a period in our
checking account, not in accounting
terms, but in cash.
Revenue
The total amount of
money that comes into our business
from sales for a particular period of
time.
Income
Our revenue minus the
cost of the goods and/or services we
have sold for the period.
Profit
The difference between rev-
enue and costs for the period. Also
known as
net income
.
The Basics of Strategy
So, business strategy is our selection of ideas and assets to
meet our long-term goals. Of course, we must begin with
goals—What do we want to accomplish by operating this busi-
ness? There are many reasons for going into business; we’ll dis-
[ Pobierz całość w formacie PDF ]

zanotowane.pl

doc.pisz.pl

pdf.pisz.pl

sylwina.xlx.pl