- Know the three strategies. Usually, a firm can have only one of three business strategies:
- Cost-based strategy
- Differentiation-based strategy
- Focus-based strategy
- Pick a strategy. The first step — the step that you take before you can select appropriate tactics — is picking a strategy. From the strategy decision, all other tactical decisions follow.
- Support the strategy with appropriate tactics. A strategic plan, obviously, must have a clearly defined strategy. Then it must identify, or enumerate, the tactics that support the strategy. It’s really as simple as that. And note this important point: The only appropriate tactics are those that support one of these strategies.
- Stick to your strategy. The hard part of writing a strategic plan is to discipline yourself (or the firm) to pick a strategy and then stick with it. Few firms want to be disciplined to stick with a hard-core strategy of cost, product differentiation, or focus. It’s all too easy to slip-slide your way into a situation in which you’re trying to be a little of this or a little of that. Picking a particular strategy means that you forgo certain kinds of opportunities and that you say no to some customers and certain kinds of products.
- Read Competitive Strategy: Techniques for Analyzing Industries and Competitors. It’s a difficult book to read, and much of the material is a couple of decades old, but it’s worthwhile reading for any business owner. Reading it won’t be much fun, but the 15 or 20 hours you’ll spend reading the book will be a useful investment of your time.
- Poke around the Evergreen Small Business blog. If you have time, you ought to consider poking around the blog and perusing the strategy-related posts. You should find the coverage pretty useful because the typical business-school strategy talk is rewritten in terms that pretty directly translate to the small-business owner’s or manager’s situation.