If You're in a Dogfight, Become a Cat!

Effective business strategy is inherently dynamic and context-sensitive. No one universal framework or management prescription fits all business circumstances. What works well for one company may be quite harmful if applied by another company operating in a different market and competitive environment

Corporate executives often struggle with strategy formulation and communication. In such cases, the problem often starts with an inability to define genuine North Star corporate goals that can be translated into specific, measurable, achievable, and time-dependent objectives. This leads to strategy inertia, undermining the ability to effectively respond to the accelerating pace of marketplace shift.

The starting point for an effective strategy is the development of appealing, differentiated products with compelling value propositions, for which targeted consumers are willing to pay considerably more than the company’s unit costs.

Strategic inertia, the tendency for organizations to remain mired in the status quo and to resist strategic renewal outside the frame of current business operations, is still prevalent in corporate strategy processes. Companies like Kodak, Nokia, and Sears certainly were aware of disruptive technologies threatening their industries and had the resources to reposition their businesses, but each pursued a tepid strategic response, which ultimately contributed to their severe decline.

Successful strategy requires decisive action in both concept and execution. The CEO must ensure that the entire organization is motivated to support the company’s strategic direction.

Strong brands are the physical and emotional embodiments of successful business strategy. For many consumers, the purchase or ownership of a brand signals membership in a desired social grouping. Brand managers recognize the importance of symbolic identity and often focus advertising themes on lifestyle images rather than tangible product attributes.

Strong brands convey a clear promise of what a company and its products stand for, often built over decades of consistent brand positioning. If a company suddenly reverses course and launches products that break its brand promise, it risks alienating customers and damaging the brand for years.

A company can dilute its brand value by allowing its product lineup to become too complex over time. Not only does excessive product complexity increase costs, reduce quality, and harm profitability, but it can also weaken the foundation of a company’s brand image.

Believing that innovators operate in their creative bubble without the need to interact with prospective customers is far from the truth. An entrepreneur’s inspiration for an innovative new product reflects nothing more than an initial hypothesis and hunch, borne out of personal experience and observation.

Consumer input is pivotal in identifying new business opportunities, provided that the right type of research is conducted at the right time. This approach identifies pain points that may be hidden in plain sight from consumers who have simply accepted current product shortcomings as unavoidable inconveniences. Thus, it is a more effective diagnostic tool than asking them directly.