Strategic Focus: Needs of Market versus Company Strengths
In my last blog, I discussed the importance of defining “Where We Will Play” and “How We Will Win” when defining your strategic focus. Digging deeper into this approach now, how do we define the “playing field and how to win”? Defining the “playing field” was the first step and so critical such that you don’t try to “focus” on every market, but only those that you are in the best position to “Win.” The key is to do your homework on the needs of the market compared to your company strengths and/or competitive advantages.
In the above table, first you evaluate the specific market you are thinking of pursuing by defining their unique needs. These markets should already be prioritized by size of these markets and their growth rates. Why even get to this stage with a market that has small potential for you and/or is not growing? So these markets are either very large opportunities for you or are growing at a high rate so you are anticipating a large opportunity in the near future.
Each of these prioritized markets will have their own needs that will drive their purchases. It is important to not generalize each market’s needs. For example, for our customers, the needs of a Fortified Blended Foods producer in a developing country may be very different than a By-Product processing customer.
Next you compare this to your company strengths which should be one of the first things you do in developing your strategic plan as you take that “honest look in the mirror” doing your SWOT analysis (Strengths, Weaknesses, Opportunities and Threats). These strengths can be overall company strengths or specific competitive advantages you have in certain markets.
You can do this for each market you are thinking of pursuing. After you complete all the graphs, you evaluate which markets have the greatest overlap of their needs to your strengths. With this information you can now FOCUS your company on “Where We Will Play”, meaning the markets you will target. And you can clearly define what company strengths/competitive advantages you will focus your company on to continue to build these advantages which answers “How We Will Win”. These strengths/competitive advantages will be the key “pillars” of the company or Points of Difference that all team members will support and drive their efforts toward.
This process assures that you focus on the areas that matter to your markets, driving competitive advantages for you that will “Sustain” your competitive advantages going forward.