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April 29, 2008

Planning for Profitable Growth – What is the Path to Success?

Once you know where you are and where you want to go, you can get down to the business of trip planning. In business planning language, we call trip planning developing a strategy.[i] A business strategy is nothing more than the plan of action by which you expect to accomplish your goals.

To be effective, a strategy must:

  1. Be relevant to your goals – executing the strategy should move you toward your goals.
  2. Be affordable and executable with current or available resources – a great strategy that your business cannot execute is worthless.
  3. Be defensible – if competitors can quickly copy or otherwise trump your strategy, you will not likely make much headway.

Here are a few strategy success stories:

  • A technology reseller implemented a rapid delivery strategy by moving its distribution center to the operations hub of its principal shipper. While competitors eventually copied the strategy, the company was the first and only overnight delivery supplier for several years.
  • A professional services firm became the premier provider of merger & acquisition services to several early private equity firms by dedicating a team of specialists to each of a few key clients. Whether there was a deal in process or not, each team was assigned solely to its client. When a deal arose, the dedicated team marshaled the necessary resources from throughout the firm to turn on a dime and deliver its services in rapid fashion.
  • A medical devices company gained a dominant two-thirds market share for a diagnostic test by developing a best in class product, which virtually displaced existing competitors and limited the success of new entrants to the market.

First, find the path and then move out quickly to seize the advantage.


[i] This is the third article in a series illustrating techniques used in planning for profitable growth.

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