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Article Teaser: Developing competitive advantage in the market place is not the easiest thing to accomplish.

Keep reading below...

Competitive Advantage ---- Make Your Strategic Plan Your Launching Pad

Copyright (c) 2008-2017

Developing competitive advantage in the market place is not the easiest thing to accomplish.

According to Wikipedia,

"Competitive advantage is a position that a company occupies in its competitive landscape. A competitive advantage, sustainable or not, exists when a company makes a profit, that is, their earnings exceed their costs.. That means that normal competitive pressures are not able to drive down the firm's earnings to the point where they cover all costs and just provide minimum sufficient additional return to keep capital invested. Most forms of competitive advantage cannot be sustained for any length of time because the promise of profits invites competitors to duplicate the competitive advantage held by any one firm.

A firm possesses a sustainable competitive advantage when it has value-creating processes and positions that cannot be duplicated or imitated by other firms that lead to the production of above-normal rents."

Wow.... That's a mouthful and pretty simplistic. However, to make that happen and create sustainable competitive advantage, which means creating sustainable profitability, I believe it starts with a well thought out strategic plan; a plan that has the potential to substantially improve a company's performance. A strategic plan is a competitive differentiator in today's volatile economy and it can function as a launching pad to create competitive advantage by leveraging your differentiation. What is it that you do that makes you different and defines your value propositions?

Vision

Creating a well thought out strategic plan starts with a vision. Most importantly, however, as a leader you must be able to turn this vision into a cause. A vision without a cause is simply a day dream. That means that as the leader you must be able to document this vision into an end game - a destination that you want the company to reach.

A critical factor and the very first step in developing a strategic plan is turning your vision into a cause by developing your end game. Just exactly what do you want your company to be when it grows up? Ask yourself the following questions from the perspective of looking five to seven years into the future.

1. What markets should your company be serving five years from now?

2. What products should you be distributing?

3. Who are your primary competitors?

4. What are your strengths?

5. What are your competitors' strengths?

6. How has your marketing strategy changed?

7. What are your core competencies?

8. What is the size of your revenue stream?

9. How is your revenue stream segmented?

10. Do you have a Human Resource Development plan?

A Creative Process

Strategic planning is a creative process the starts with the visionary creativity of the owner or CEO. The fresh insight it engenders might very well alter past initiatives. Planning also consumes resources which are precious commodities. It can be an overwhelming and daunting task, but it is a process that eventually defines the direction and activities of the organization.. Despite its overwhelming nature, the benefits of planning can far outweigh the hard work and pain involved in the process. Strategic planning is a key process that adjusts an organization's direction in response to a changing environment. It supports the fundamental decisions and actions that shape and guide an organization. A sound strategic plan can help define and focus a distributor's efforts to move the company in the right direction, using the best methods. It can and often does create competitive advantage.

A well thought out Strategic Plan is essential for a business to be successful. Unfortunately, many businesses fail when it comes time to implement their plans. The result can be wasted time and money as well as numerous missed opportunities.

Strategic planning creates a team culture that is necessary for success. Working together effectively is not automatic. It takes a specific effort and the development of a culture that is supported by executive management. Shared experiences create unity and value. Knowledge transfer is essential for an organization to grow. Without knowledge transfer and the sharing of the planning experience it is difficult for the group to share the vision and work toward common goals.

Some "experts" may encourage you to hold a weekend retreat where you all sing the same songs, drink the same kool-aid and come away with a long list of initiatives that never get done. Other experts may tell you, as published in one of our industry's leading newsletters:

"The strategic planning process itself is simple enough for most firms to do the work on their own. An outside facilitator with the right experience and skills can speed the process and help to assure workable results. An ideal plan can be boiled down to a 'one-page strategic plan,' a simple summary every employee can understand and apply in his or her daily work."

Not true, not true at all. Oh, it is certainly important for every employee to have a crisp, short explanation of what your strategy is all about but this is simply part of creating ownership and buy-in. We call it the "Core Strategy Statement".

Implementation is Key

Absolutely essential but standing on its own with no precise implantation outline, with accountability, goals and timelines makes it nothing more than a slogan or mission statement. And...... Mission Statements do not create success. Actions create success.

Developing a successful strategic plan that creates competitive advantage is much more than a one page brief. There are a number of important factors that must be considered if a strategic plan is to be successfully implemented. There are a number of ways to insure that company behavior really changes as a result of the strategic planning process.

A strategic plan that creates competitive advantage must be built upon the following:

  • Specific real-world objectives must be set. These objectives must have goals and be measureable.

  • Objectives and initiatives must be prioritized and compared to resources available to support the initiative. The purpose is the realization that you can't do everything at once. Listing fifty initiatives to be accomplished in year one is delusionary. Consequently, the first 12 to 18 months should be spent focusing on the four to six initiatives that will have the biggest bang for your buck in the shortest period of time. Other initiatives should be deferred for review annually or upon completion of a prioritized initiative.

  • The objectives should be specific so that there is no ambiguity about what is required. Expected timing and personnel accountability should be specified in each objective. Ideally there should be one individual who is accountable to company management for reaching each objective.

  • A monthly strategic review meeting should be held in order to evaluate progress on reaching objectives. These meetings are very powerful tools to ensure that the proper focus is put on achieving the objectives that are part of the strategic planning process.

  • Key performance indicators must be defined for each specific objective. Company performance must be measured. If important performance metrics are not tracked then there is no way that company management can work toward achieving the goals the have been set during the planning process.

  • Strategic planning creates a team culture that is necessary for success. It's necessary to create competitive advantage. Working together effectively is not automatic. It takes a specific effort and the development of a culture that is supported by executive management. Shared experiences create unity and value. Unity and value create competitive advantage. Knowledge transfer is essential for an organization to grow. Without knowledge transfer and the sharing of the planning experience it is difficult for the group to share the vision and work toward common goals. And.... Achieving common goals built into your strategic plan is the "launching pad for competitive advantage."


    About The Author: Shop Amazon - Top Gift Ideas
    http://www.ceostrategist.com - Sign up to receive "The Howl" a free monthly newsletter that addresses real world industry issues. - Straight talk about today's issues. Rick Johnson, expert speaker, wholesale distribution's "Leadership Strategist", founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail rick@ceostrategist.com. Don't forget to check out the Lead Wolf Series that can help you put more profit into your business. And check out Rick's new CD and workbook Real World Leadership Kit --- "Learning to Lead So Others Will Follow." http://www.ceostrategist.com/resources-store/real-world-leadership.html

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