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The Worst Strategic Error In Business.

Business leaders generally agree on the need for strategy. No business can survive without one because no matter how turbulent and intensively competitive an industry might be, the firm with the right strategies will always have superior results. Performing on top of the market requires a firm grip on strategy.


Sadly most executives are confused about strategy. They don't know what it is. As I travel and interact with executives, I find one passion burning in the heart of many of them. I've seen them express it with intense passion, I've watched them blame everything from the government policies to climatic conditions to anything conceivable as being the limiting factor behind their inability to reach this goal. What is the goal? The drive to be the best company or business in their industry. This is the competitive focus of many companies.
It's not hard to know why. The society rewards 'best'. We are conversant with phrases like, 'the best graduating student', 'the best footballer', 'the best staff of the month' etc. So we try to be the best bank, the best insurance company, the best school, the best furniture company.


Unfortunately that's the wrong competitive focus because in the very first instance, there is no such thing as a 'best' company! There is no best car, no best bank, no best restaurant because a company could be best or otherwise depending on the need of the person accessing their products or services. What works for Charles may not work for Seyi. What works for Amara may not work for Zain. That's just the way it is.


Superior performing companies don't focus on been the best company. Consider the automobile giant, Toyota. Toyota's competitive focus is ensuring that their products meet the highest expectations of the market and even exceed it . the Toyota production system strive for the absolute elimination of waste , overburden and imbalance in all areas to ensure smooth and efficient operations. Going the extra mile for them means providing customers with the highest quality vehicles , at lowest possible cost , in a timely manner with the shortest possible lead times. This defined their uniqueness. It emphasizes what make Toyota cars unique. You can get a good car at a low cost. Toyota is a unique car but by all means not the best car because there is no best car.


All superior performing cars follow the same path, their focus is on being unique, not being the best. They focus on a segment of the market or may be on the whole market but with a unique offering. It is this uniqueness that gives them a competitive advantage. The worst competitive error is to compete on being the best. You can't be all things to all people and expect to be a superior performer. Competing on being the best can at best keep you struggling along with others.


You see behind the drive to be the best is the assumption that there is a best already which you intend to take out. Apparently there will always be a market leader in every industry. But one thing to understand is that market leadership is a result of offering unique value to the market. It is a natural consequence of a unique value clearly communicated to the right market. Of course this presents a question, which market is the right one? Well the right market is that whose needs fits best into the offering targeted at them. So they buy not because you have to sale but because they need to buy. Take the Swedish furniture company, IKEA for instance. People on budget buy from them not because IKEA wants to sale but because IKEA offers them the chance of owning good furniture at a low cost. The reason Honda could not capture the Indian tricycle market even though it has a respected brand and may be better quality than local rival, Bajaj was simple: Bajaj configured its offering in a way its most beneficial to the Indian user. Honda had a good product and a respected brand but they lacked one key thing in their fight for the Indian market- understanding of what the ideal Indian customer wants in a tricycle. Strong, reliable didn't matter to the Indian user as easy availability of repair service and spare parts. That's was the Bajaj promise; that was why they won the Indian market and forced Honda out.


This case is of a particular attention because it demostrates that a small local company in an emerging market can successfully root out a global force or at least control a share of the market. Of course that's the importance of very purpose of strategy. If market situation is such that nothing stands between you and your customer then there would have been no need for strategy.
So as the fight for market share intensifies in every industry, understand that if you are going to control the market you will need to rethink your assumptions about strategy and what it means to be strategic.


Strategic effectiveness begins by having a clear idea of your your customer, his needs and his constraints. Then you configure your product, its distribution and ownership in a way this customer finds it most useful while of course considering your chance of making a profit. Begin by identifying unmet needs you can take care of. There's no way around it. You're either going to meet the needs of the people in a whole new way or meet needs nobody cares to take care of. That's what will give you the market leading position you desire. Yet there's much more.


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Written by brian reuben

Brian Reuben is an author, advisor to business leaders, keynote speaker and an entrepreneur. He has trained and advised senior executives at renowned
organizations including Africa Reinsurance Corporation, UAC, United Securities Limited, BusinessDay among others. He is the Director of BusinessDay Training and sits on the board of a number of organizations in Africa.

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