An organisation's approach to strategy determines its future
A business that doesn't have a strong and enduring desire to win, is a business that is going backwards.
Most small businesses fail.
They fail not because the people that start them don't work hard enough, or because their offering is not good enough.
The problem is something called the law of double jeopardy.
The law of double jeopardy dictates that the odds of success are overwhelmingly against smaller brands, because smaller brands suffer a dual disadvantage: fewer buyers and lower brand loyalty than larger competitors.
In short, smaller brands struggle to make sales.
And therefore face significant top-line pressure.
Smaller brands must also endure much higher input costs than bigger brands; just try negotiating favourable terms with a courier company, or reasonable rates with a landlord as a smaller brand and you'll have a little taste of just how unfair this game is.
Higher costs put stress on the bottomline, squeezing margins and meaning that the likelihood of growing a small business, into a sustainable category competitor, is simply wishful thinking.
But...if a smaller brand understands the value that good strategy can offer, takes it seriously and commits to acting strategically...the risk of the gamble decreases significantly.
However here's the bit that far too many misunderstand.
The purpose of strategy is not to try and just keep a business in the game (far too many think about strategy as some kind of an elaborate approach to operational optimisation).
Strategy is about winning
Yes, the point of strategy is to win. And winning is the only aspiration any brand should have if they wants to succeed.
Win market share. Win customers from a competitor. Beat everyone else by developing a new product that changes the entire category and gives you an unfair advantage.
By design, capitalism favours winners. A business that doesn't have a strong and enduring desire to win, is a business that is choosing to die.
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Jon Cherry
Jon Cherry