“Wealth gotten by vanity shall diminish; but he that gathers by labour shall increase.” – Proverbs 13: 11
Years before now, companies competed based on the sophistication of their tangible assets like machinery, tools and other industrial equipment that are deployed in the production of goods and services. During this era, the challenges of positioning a business in a competitive market were usually resolved by using some of the engineering competences, little advertising and customer relation which were required to attract customers. But with an increased level of information technology, competition became increased; customer satisfaction also turned out to be more demanding. Consequently, the intangible assets were no longer sufficient to support managers to actualise their business objectives.
In these days and this age, the level of competition and the need to gain a competitive age paved the way from managers to deploy highly rated intangible assets like customer relations, innovation skill, competence, motivation, the improved internal process to achieve superior performance. The fact that these intangible assets can be used in combination in different proportions to produce different results further created the need for strategic thinking on how best to use these resources to achieve greater value and financial success.
As a replacement for the intangible assets, strategic thinking and superior knowledge of business positioning became a reliable tool. The management team of every organisation is therefore at liberty to exploit its competence to pursue its business objectives in the most preferred manner that can position the business for success in the industry. Not only that, with knowledge of economics, we recognise that all industries are characterised by all kinds of imperfection inefficiencies like unequal distribution of resources among the operators, poor flow of information, different customers preference and so on. The imperfections place some organisations at an advantage over others. In such a situation, management must choose among alternative approaches that detail how best to exploit the opportunities in the market to accomplish organisational goals and objectives concerning a company’s strengths and weaknesses.
The approach or plan chosen by management that is believed to support the business to cling to the high position in the market with superior financial performance and consistent value creation represents its strategy. This can simply be described as a calculated means through which management deploys its organisational resources to accomplish its objectives in the most advantageous circumstances. It can also be interpreted as a broad principle by which a company wishes to secure an advantage over competitors, become attractive to his customers. Whatever definitions and interpretations that are given a strategy, I see it as a superior tool that assigns a position to a business in a competitive market. Joel Rose and Michael Kami once said that “without a strategy, the organisation is like a ship without a rudder, going around in circles. It’s like a tramp; it has no place to go.” The primary objective of managing the business by strategy is to build a sustainable competitive advantage and also align all the business activities and resources to walk in agreement to take advantage of opportunities existing in the market to earn a superior profit.
A strategy has also become one of the most vital differentiating tools used by most successful businesses. What makes Company A more attractive than Company B is better to explain in terms of the strategy adopted by each of them. Each company deploys what it considers most sensible and appropriate to position its business differently from competitors. Nevertheless, there is no strategy that one can describe as “one size fits all.” Every company must deploy a different strategy that suits its purpose to achieve greater market positioning. Due to market saturation in most areas of commerce, positioning has come to play a prominent role in today’s business in the light of the increasing need for business to differentiate its goods and services from those of competitors. This reminds me of the popular saying that three different companies exist: “those that make things happen, those that wonder how things happen.” The successful ones are those that make things happen by deploying different strategy ideas that cut across all the dimensions of the products and services. This assists them to offer varieties and gain high-profile respect from their peers and customers.