Page 164 - (DK) The Business Book

162 INTRODUCTION

n Lewis Carroll’s Alice in but it should also involve identifying when sales of its BlackBerry
Wonderland the Cheshire cat which actions not to take. Strategy smartphones fell sharply—bosses
I tells Alice that if you don’t know is also vital for companies who had failed to anticipate Apple’s
where you are going, “it doesn’t want to lead the market—most do more advanced iPhone.
matter which way you go.” This is so by offering a product or service
a trap that businesses must avoid— that is either the cheapest or the Keeping a balance
the starting point for any new best. There are numerous business Companies should always balance
venture is having a goal and there models and theories that can be long- and short-term objectives.
must be a clear strategy as to how followed to devise a successful The board must keep the long-term
to get there. It is also essential to strategy. Leading US strategist vision in sight, but in the short term
have a vision of what success will be Michael Porter, for example, has they need to make decisions that
like once that goal has been reached. provided organizations with ideas allow them to create enough profit
This vision must be shared and to help them analyze their market, to stay in business—a precarious
understood by everyone so that the understand the competitive forces balancing act, particularly in an
company has a common objective. at play, and position themselves for uncertain world. It is impossible
competitive advantage. to predict what the future will
Following a vision Once the board of a company has bring, so executives often use
Making decisions about a good agreed a strategic direction, it must scenario planning by asking
business strategy starts with critical be prepared to change course if the “what if?” questions. Assessing the
analysis, such as SWOT analysis, need arises—but always keeping likelihood of unwanted events does
the original vision in mind. In not remove uncertainty, but it does
addition, business leaders should help to avoid complete surprises.
be on continual alert for changes in The trend of diversification into
the external environment. Avoiding unrelated businesses has declined
complacency is crucial, since the recently, and companies now focus
Determine that the thing pace of business and change is on the core business. Management
can and shall be done, constantly increasing. Competition experts C. K. Prahalad and Gary
and then we shall is fierce, and companies must Hamel argued that a company’s
find the way. innovate if they want to stay at the ability to consolidate its strengths
Abraham Lincoln top and avoid being overtaken or into core competencies can provide
becoming outdated. There are a competitive edge over rivals.
US former president (1809–65)
many examples of companies who
failured to do this, such as Research Flexibility
in Motion (now known as BlackBerry Globalization, technology, and a
Ltd), the Canadian technology changing world order have made
company whose business suffered business far more complex.