Strategy: An Executive’s Definition

What is a business strategy? It is the result of choices made to maximize long-term value.

The question “What is strategy?” has spurred numerous doctoral dissertations, countless hours of research, and hearty disagreement among serious management thinkers. Perhaps this is why many executives also struggle with it. Nonetheless, decision makers seeking to steer a business to sustained success need a succinct and pragmatic response. After all, it can only help executives to have a shared definition when they are creating, communicating, and implementing a strategy for their business.

Illustration by Otto Steininger

So, what is a business strategy? Strategy is different from vision, mission, goals, priorities, and plans. It is the result of choices executives make, on where to play and how to win, to maximize long-term value.

“Where to play” specifies the target market in terms of the customers and the needs to be served. The best way to define a target market is highly situational. It can be defined in any number of ways, such as by where the target customers are (for example, in certain parts of the world or in particular parts of town), how they buy (perhaps through specific channels), who they are (their particular demographics and other innate characteristics), when they buy (for example, on particular occasions), what they buy (for instance, are they price buyers or service hounds?), and for whom they buy (themselves, friends, family, their company, or their customers?).

Having a differentiated approach to a target market can be a source of great advantage. Southwest Airlines Company is a case in point. Early in its development, Southwest defined its target market to include regular bus travelers — people who wanted to get from point A to point B in the lowest-cost, most convenient way. In contrast to the industry’s hub-and-spoke standard, Southwest’s point-to-point operations and hassle-free service model offered a compelling value proposition for people who would otherwise choose bus travel. This gave the company a unique growth path compared to the traditional airlines.

Or consider Sir Brian Pitman, the former CEO of Lloyds TSB: He had a policy of defining the company’s target markets at one level of segmentation lower than the competition did. For example, Lloyds was the first “high street” (retail) bank in the U.K. to carve out “high net worth” as a separate business with its own unique target customer, value proposition, and system of essential capabilities. Similarly, it was the first British commercial bank to drop large companies as a target customer (with a few “flagship” client companies as exceptions). Sir Brian’s insight — that you could win by being sharper than the competition in choosing your target market — turned Lloyds from the United Kingdom’s banking laggard to its leading bank.

In both the Southwest and Lloyds cases, “where to play” was an essential part of what made the company’s strategy so successful for such a long time.

“How to win” spells out the value proposition that will distinguish a business in the eyes of its target customers, along with the capabilities that will give it an essential advantage in delivering that value proposition. Choices must be made because there is at least one way to win in every market, but not everyone can win in any given market. With good choices, a business gains the right to win in its target markets. The target market, value proposition, and capabilities must hang together in a coherent way. And good strategies call for the right amount of “capabilities stretch”: not too much or too little change from the capabilities a business already has.

Every company faces innumerable options for where to play and how to win. Often it has to sort out seemingly conflicting objectives, such as the need for both long-term growth and short-term profitability, to choose which options to pursue. To “maximize long-term value” means — when there are mutually exclusive options — to select those that will give the greatest sustained increase to the company’s economic value. We once heard a corporate leader ask, “But how can you ever know when you have maximized value?” The fact is, you can’t, because you can never know with certainty if there’s a better option than those you’ve considered so far. To “maximize long-term value” is to never stop looking for those higher-value options.

It’s worth emphasizing that “maximizing long-term value” is not the same thing as “maximizing share price” or “maximizing shareholder value.” Those objectives typically represent the more short-term demands of current shareholders or their advisors, and they do not always align with what is best for all shareholders, particularly long-term owners. On the other hand, “maximizing long-term value” does not mean forgetting about the short term. Economic value takes into account growth and profitability, the short term and long term, and risk as well as reward.

To define the fundamentals of your business strategy, you need only to answer three questions:

1. Who is the target customer?

2. What is the value proposition to that customer?

3. What are the essential capabilities needed to deliver that value proposition?

Without clear and coherent answers to these three questions, you may have an exciting vision, a compelling mission, clear goals, and an ambitious strategic plan with many actions under way, but you won’t have a strategy.

ESP Control

You’re driving along the highway to KLIA to drop your wife off to catch a flight. The skies are pouring down at full blast, and your wipers are struggling to keep up. There’s loads of water on the road, so you keep to the middle lane to reduce your chances of aquaplaning. You think there’s plenty of time to reach the airport, and since you’re taking precautions, everything should be dandy.

But not everyone is as conservative as you in the wet. Another car behind you speeding along in the fast lane suddenly starts spinning, and spinning, and spinning – and you watch it slowly come closer and closer to you through your rear view mirror. It’s spinning 360 degrees while sliding towards you at a higher speed than you’re driving forward with full traction! BAM! The other car hits you at highway speeds and sends your car veering almost sideways out of control towards the barrier.

Seems a little far fetched, but this actually happened to me some time ago. And I didn’t hit the barrier, because my car was equipped with stability control. In seconds, stability control did its magic, applied brake force to the necessary individual wheels to stabilise the car. I regained control of the vehicle without much effort, and could have proceeded with my journey if I had to. A potential disaster had been averted, and I got away with just a broken bumper and a tail lamp.

There are so many potential situations where stability control can potentially save your life. Another driver might be merging into your lane without bothering to check his wing mirrors to see if he’d be ploughing straight into you – and at highway speeds, an evasive manoeuvre could see you lose control as the car starts to fishtail.

Most people are unaware of what stability control is. The layman interprets car safety as being passive – which means the car must be good at saving your skin when you crash. He thinks the body must be “solid.” and he kicks the bumpers, shuts the hood and slams the door at the showroom to apparently test this by the sound the body parts make. This must be an acquired skill like wine tasting, as it doesn’t make sense to me at all. And then he counts the number of airbags in the car – the more, the better.

He also takes into account if the car has ABS, but he thinks this means the brakes are stronger, not the real meaning of ABS (Anti-Lock Braking System), which basically allows you to steer while you’re braking, so you can steer around the object that’s in your way. The point is, ABS isn’t passive safety, but it’s active safety, essentially a vehicle system that works to prevent you from crashing, rather than try to cushion the impact of a crash.

Another form of active safety is stability control. There are really not many people that know what stability control is. So when market surveys are done, this important safety feature doesn’t show up as being desired by the potential buyer, and so the bean-counters at the car company decide that they don’t need to put this feature in to sell cars

We have even seen cars that come with stability control in one generation and with the next generation, the feature is gone, all because market studies showed consumers did not ask for it, and so it didn’t matter when it came to sales numbers whether such an important safety feature was included or not.

Since 2009, Euro NCAP began awarding three Safety Assist points to a car if stability control is fitted as standard across the model range, or if it is an option on every variant and the manufacturer also expects to sell at least 95% of cars with the system as standard equipment.

From 2012, stability control has been regarded with such importance that Euro NCAP will only reward equipment with a five-star rating when ESC is fitted as standard across the whole of the model range, and the feature has also become compulsory for all new cars sold in the EU. The NHTSA has done that for 2012 as well.

Here are three very good videos that explain how stability control works. I reckon it does the job much better than trying to explain it in text.

Gempar! Injil berusia 1500 thn SAHKAN Muhammad Rasulullah !!

ALLAHUAKBAR..
Satu naskhah kitab Injil berbahasa Arami berumur lebih 1500 telah ditemui di Turki...mengandungi pernyataan Nabi Isa a.s bahwa Muhammad adalah sebagai RASUL yg akan datang selepasnya....!!

... kejadian ini benar2 telah menggemparkan pusat kristian dunia di Vatican, Rome.

NASKHAH injil tersebut sebenarnya sudah ditemui sejak 12 tahun lalu...namun atas desakan dan permintaan kuat pihak gereja ia telah dirahsiakan...kerana bimbang ada persamaan terhadap pernyataan al-Quran bahawa Nabi Isa a.s sendiri sudah pun memberitahu tentang kedatangan Ahmad( Muhammad) saw

SAMEOL!SAMEOL!..5 TALKING POINTS OF DA MATCH AS WD BE DONE BY INTELLECTS!

Roy Hodgson had waltzed through his first few matches as England manager exorcising ghosts wherever he went, though at least one considerable hoodoo remains. Confronted by a classy, if profligate, Italian side at the Olympic Stadium in Kiev, the English heaved desperately to stay in the contest and then departed, almost inevitably, via a penalty shootout. It was their fifth defeat in a row when a contest has boiled down to efforts from 12 yards. To the lengthy list of those who have missed in the lottery can be added the Ashleys, Young and Cole, as the quarter‑final stage ushers the national team from a tournament yet again. Hodgson has achieved much in Poland and Ukraine. On a base level, he has inflicted a first competitive defeat on Sweden since 1967, and beaten a host nation at a finals. Those achievements should be considered encouraging. Yet this offered up proper context. England are still yet to eliminate a footballing powerhouse from the knockout stage away from Wembley, and that hoodoo will dog them still ahead of the 2014 World Cup finals in Brazil and the 2016 European Championship in France.

2 But cling to the progress that has been made


Not that this campaign should be deemed a failure. Far from it. A certain amount of pride has been restored, particularly with those wins in the group stage, and shoots of progress are very much in evidence. The youngsters may have departed the turf at the end here in tears, but they will have learned from these experiences. Joe Hart, Jordan Henderson, Andy Carroll, Alex Oxlade‑Chamberlain and Theo Walcott will have benefited from the game‑time they enjoyed here. Phil Jones, Martin Kelly and Jack Butland have now tasted life at a major finals. And Danny Welbeck feels a fixture in this team's future. The Manchester United forward is still raw, but he was slippery in partnership with Wayne Rooney at times here and rugged even in helping out his defenders from set-pieces and in open play. He will cherish that winner against the Swedes, and should become a mainstay of the team – fitness permitting – that attempts to reach Brazil. There is promise to be found in this squad's youth.

3 The Italians remain a threat


Germany will hardly be quaking in their boots at the prospect of confronting the Azzurri in Warsaw on Thursday, but they will be warned. This Italy team will be pepped by progress into the last four and feel threatening. If they could add bite to their armoury, they would be imposing opponents. Twice they struck the woodwork here with Hart beaten, while the close‑range misses from Daniele De Rossi, Mario Balotelli and Antonio Nocerino defied belief. They monopolised the ball – something they will struggle to do against the Germans – but used it intelligently, largely courtesy of the gem in their midst. Andrea Pirlo was imperious, untouchable in central midfield throughout 120 minutes and conjuror of the cheekiest penalty imaginable to flummox Hart in the shootout. England tried and failed to snuff him out. Joachim Löw must find a way of preventing him conducting the semi-final.

4 England's possession play remains their weakest link


How England must have wished they boasted a player of Pirlo's class and calm quality in the centre of their midfield. Where the Italian dictated play, England were all huff and puff, their Achilles heel retained when it came to maintaining control of possession. The basic statistics were brutal come the final whistle. The Azzurri enjoyed the ball for 68% of the contest, Italy mustering 36 attempts to England's nine, the tally of those on target eight to one. There had been flashes in the opening exchanges of the quarter‑final where England had summoned rhythm when they had the ball – the early chance from Glen Johnson that was clawed away by the Italy goalkeeper Gianluigi Buffon coming at the culmination of arguably the team's best flowing move of the tournament – but they remain limited. Gary Neville had pinpointed the need for more incision and precision in the pass in the buildup to this fixture, aware as he was of the Azzurri's threat. That was to be the "next stage" of this team's development now that a semblance of defensive base had been established. It is a process that will take considerably more time to complete.

5 The old guard should not be discarded just yet


There may be calls for revolution now, albeit not as many as there had been after the 2010 World Cup finals in South Africa, and some of this England team's elder statesmen may even consider whether their bodies will allow them to continue while club duties sap their energy. But the old guard should be persuaded against retiring just yet. The performances summoned by Cole and Steven Gerrard were superb at times, while Glen Johnson enjoyed his best game of the finals against the Azzurri. Then there was John Terry. The Chelsea centre-half's selection had been controversial, and he has a date ringed in his diary for 9 July at a magistrates' court back in London which might have been expected to play on his mind. The Chelsea defender has faded into the background off the pitch, but his displays in Ukraine have been gargantuan at times. It was his recovery run and block that snuffed out Mario Balotelli in the first half, and his leap to flick behind that denied the striker another clear sight of goal after the break. His partnership with Joleon Lescott, another to have risen to the challenge, started as unfamiliar but now feels like a strength.

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internal affairs @ Sunway Surf..

alas!rather than fighting my eyes opened afta da England debacle..i had better do my part and speak for both sides..yess...Sapura Industrial had their Fanily day after  i for one thought the ATM playing tricks on me again..dis time it was not.After a year of commitment by everyone..we finally were paid for the job well done this year  and if a reminder that if we want to keep getting what we had goiten ,it is all in our hands.Even for IASB whom had reported a 600k loss for the year was not spared of the kindness for once,and this was the differences between this CEO and the last!.a little heart certainly cant do any wrong..En Shah!

.Ex gratia it was called , but  by any other name,it is just a big thank you from us all to the Management for their kind thoughts and deeds once again,and on behalf of most of us...we appreciate this til lifes end as we dont know any other way...may the 19 be surpassed by a lot more again this year...god willing..n plks HR..give me a bigger shirt please!..Salam.

all work n no play makes Jack a dull boy..hehe

Sensationally Phuket!