Business Strategy: what is it,
who's it for and how to create one
Chris Eaton LLB (Hons) C Dir
CEO, The ILS Group Limited
Strategy
“We must plan for the future because
those who stay in the present will
remain in the past.”
Abraham Lincoln
Evaluating Strategy
A well formulated strategy helps to marshal and allocate an
organisation's capability into a unique competitive position
based on its relative internal strengths, weaknesses,
anticipated changes in the environment, stakeholders’
expectations and likely moves by present and potential
competitors.
Source J B Quinn - Adapted
Mission Statement
To have each guest leave the hotel completely satisfied
- Marriott Hotel Dubai
Shareholder is King
- Hanson Industries
No 1 goal is to provide outstanding customer service
- Nordstrom
Kill Caterpillar
- Komatsu
Getting Started
Start Big – Start Wide
P – Political
E – Economic
S – Social
T – Technological
L – Legal
E - Environmental
Understanding the Competitive Situation – Porter’s Five Forces
Potential
Entrants
Supplier Power
Current
Competition
Substitutes
Buyer Power
SWOT Analysis
• Should provide a clear statement of strategic position
• Involve all
• Do regularly
• Perception or Objective Analysis?
• Prioritise and discuss impact
• Compare against competitors
Product Market Matrix
Original idea by Ansoff
New product
Current product
Product
Development
Diversification
Penetration
Market
Development
Current market
New market
Strategic Options
Two Core Strategies:
 Differentiation

What don’t we do?
 Cost Leadership

Cost not Price
Implementation
Identification of sub-strategies:
 Growth
 Turnaround
 Defender/Reactor
Reasons for Failure
Cost Leadership
• Basis of leadership duplicated – “Me Too”
• (N.B. Organisational and management skills most difficult to copy)
Differentiation
•
Price differential becomes too great to hold brand loyalty
•
Buyer’s need for differentiating factor fails
•
Imitation narrows perceived differentiation
Key Elements to Remember
•
Start Big - Start Wide (PESTLE)
• Analyse the Competition (including new entrants and possible substitutes)
• Assess internal strengths and weaknesses
• Decide whether to cost lead or differentiate
• Decide what you don’t do
And remember…
Strategy is a process, not an activity