Strategy – Probably The Most Overused And Misunderstood Word In Business

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How many times have you heard someone talk about successful business strategies or ‘taking a strategic approach’? What do you think they actually mean by the use of the word strategy? Most often the people using it are trying to convey the fact that they have given the subject a bit more thought than usual, that they have looked a little further ahead than normal. If a consultant uses it be very wary. Strategy costs more than mere ideas or tactics. How much would you pay for consultants who have’ kicked around a few ideas’ or ‘come up with some tactics they think might work’. Depends how good they are. But if they come back with ‘strategic business advice’ you expect it to be very good and of course very expensive.

Why expensive? Because you would hope that a consultant or colleague would have used some kind of intellectually robust framework, that they would have tested their assumptions and developed more than one solution which they evaluate rigorously before making their strategic recommendation. This takes time and expertise and both are expensive. Let’s assume they have done all of this – does that make it strategic business advice rather than tactical advice?

Not according the dictionary. The dictionary definition of strategy is very clear and military. It defines strategy as “the art of war – disposing troops etc in such a way as to impose upon the enemy the conditions for fighting (time and place) preferred by oneself”. If we accept business is in effect a war – you develop successful business strategies because you define success as beating the competition – there is no reason why this definition of the overused word, strategy, is not appropriate for business strategy. It requires all that planning and testing of assumptions discussed already. Some kind of robust intellectual and very honest framework will certainly help to develop and evaluate options. Even the lazy use of the word strategy – giving it a bit more thought and thinking ahead – would be implied by the military, dictionary definition. But there is an extra dimension to real strategy. It requires you to do all this and come up with something that changes the rules in your favour – in other words it requires creativity.

And there is one other aspect to this more demanding kind of strategic thinking. It is about people and their behaviour. In order to ‘deploy the troops’ and change the rules you have to understand how people tick. If being creative involves changing behaviours then you have understand how those behaviours were formed in the first place and how they might be changed if you want a successful business strategy.

Before putting the dictionary away (the definition of strategy above was taken from the Oxford English Dictionary) just go forward to tactics. You will discover that the definition is exactly the same as for strategy with one addition. Tactics involves the all-important stage of implementation, putting the strategy into practice. So it turns out that far from tactics being less weighty and valuable than strategy they are actually the most valuable thing of all. A sound strategic plan that is successfully implemented includes, indeed demands, tactics.

The use, and overuse, of strategy in business is more often than not pretentious over-claim by people who do not really understand what they are talking about. It certainly does not mean giving something a bit more thought or thinking a bit more long term. It absolutely demands a thorough and honest assessment of your assumptions and your options. At the risk of being melodramatic, sloppy thinking in military strategy costs people their lives. In business it just wastes time and money. Strategic thinkers will of course use frameworks based on their experience. They will break a problem down so they can think about each component of it but they will look to change the rules not just apply them. And the true strategist understands that strategies are aimed at people and changing their behaviour. Their strategic business advice will be based on an understanding of human behaviour. Just as in war, a strategy does not just get the job done, it enables you to beat the competition, to deliver higher returns than ever before, to win and win big for the least expenditure of resources.

So whether you are undertaking a brand planning strategy, a new business launch strategy or any other kind of strategy remember what this really means and remember to include the tactics which are just if not more important. Then you can charge accordingly.

Deadly Principles Of Business Planning. You Must Know These

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Whether you are running, or planning to run, an offline or online business the traditional basics of achieving business success apply. For instance, it is well-known that a business that has no plan is almost certain to fail. No matter how small a business is, it needs a plan. A business plan compels you to think before you act. It compels you to find out about your business area before you start; i.e. to research your business area or to establish its groundwork.

A business plan forces you to think hard about your competition and how you are going to beat them in the market. It forces you to establish whether your business idea is worth pursuing. Why start a business that is going to fail? Isn’t that stupid?

A business plan forces you to establish the expected costs and revenues of your business, and hence to determine profitability. Why run a business when, at any time, you cannot tell whether or not the business is succeeding? If you don’t know your costs or your revenues you cannot compare them together to tell whether your business is succeeding or failing.

An online business is no different from an offline business, when it comes to business planning. It needs a business plan! Yet, how many newcomers do we see trying to make it online without even understanding the concept of business planning? Is it then a surprise that too many fail?

This article discusses 12 fundamental principles that you must understand and use in your business planning if you are going to run a successful business. The principles are as follows…

1. The Requirements Principle

A business plan must comply with the requirements of funding bodies. This is particularly key when you are applying for funding, but is also necessary when you are not applying because the compliance act itself makes the business plan rigorous. Funding bodies always have requirements that a plan must meet, and some of these are: technological innovation, presence of technical risk, and presence of commercial potential.

2. The Objectives Principle

A business plan must have clearly defined objectives and it must accomplish those objectives. A business plan is a strategic business document, and fundamental to any strategic planning process is the need to have objectives which the formulated strategies must aim to accomplish.

3. The Motivation Principle

A business plan must have clear motivations which highlight its importance. The motivations of a business plan are the reasons for completing the plan. These reasons tell us why the plan is important.

4. The Background Principle

A business plan must be the work of someone with a relevant background (the founder, for a start-up business), and the plan must comply with its authors background. A business plan should be prepared by the person or team who is going to run the business. For a start-up business, this is critical because the planning process prepares the owner for running the business. If the planning is delegated to someone else then it is unlikely that the owner will understand the plan sufficiently to be able to implement it. In these circumstances, the owner abandons the plan and does his or her own thing with deleterious consequences for the business.

5. The Detail Principle

A business plan must be sufficiently detailed to inspire confident action when executing the business; yet it must be flexible. A detailed plan is easier to implement than a superficial plan. A detailed plan suggests that the plan has been thoroughly researched and thought over. Detail inspires confidence in the owner of the business (assuming that he or she prepared the plan). A detailed plan should be flexible to accommodate changing times.

6. The Conservatism Principle

A business plan must be conservative. This means that it must always underestimate revenues while overestimating expenses. The reasons for this are underpinned by risk. A business is always executed under uncertainty… we never have all the knowledge we would like to make business success certain. An immediate consequence of this is the tendency to underestimate cost, only to find that we run out of money at critical times of a business’s execution. We also have a natural propensity to overestimate revenues… to dream!

7. The Cash Balance Principle

A business plan must always have a positive cash balance. A negative cash balance means that you plan to run out of money… to be insolvent! If you cannot realistically get the cash balance positive, without padding figures, then this is a sign that the business idea is not worth pursuing.

8. The Insolvency Principle

A business plan must guarantee against insolvency… against running out of cash. There are four ways to do this: conservative estimates so that the business always outperforms its plans, detailed cost identification to minimise omitted costs, contingency planning to accommodate forgotten items, and a positive cash balance throughout the plan.

9. The Risk Management Principle

A business plan must manage risks by convincingly dealing with uncertainty, reducing it to as close to zero as possible. This is simply stating that a business plan must be thoroughly researched, including desk research and field research. The more thoroughly a plan is researched the more it rests on sound facts, knowledge, and understanding, and the less the uncertainty and risk associated with the plan.

10. The Evidence Principle

A business plan must rest on supporting evidence, and guess work must be minimised. Sound evidence increases the reliability of a business plan and reduces the risk associated with it. And the less risky a plan is the more likely it will guide a business to success.

11. The Rigour Principle

A business plan must be rigorous complete, correct, and reliable. This means that the plan must be derived from a systematic process that attends to all the issues that must be addressed. In particular, the plan must not be rushed. The issues must be sequenced and dealt with, each at the right time.

12. The Collaboration Principle

A business plan must be founded on collaboration (not confrontation) it must satisfy the collaboration principle. This means that a business plan must be based on the works of others. It must not be opinionated. It also means that a collaborative, rather than a confrontational spirit, must exist in any business planning team if the results of that team are to be worthwhile.

Final Remarks

This article has discussed 12 killer principles of business planning that any plan must satisfy if it is to be taken seriously. Five of such principles are: requirements principle, objectives principle, motivation principle, background principle, and detail principle. These principles are a must for anyone running an offline or online business. If your business is failing it is more than likely that your failure to comply with one or more of these principles is to blame.

Background Of Franchising Business

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Franchising is known to be among the available options that businessmen and entrepreneurs can use as business opportunities without having to go through the usual motions of having to brainstorm and hypothesize on studies that most business tycoons would initially make. Franchising can be seen today in local food chain stores like McDonald’s, Burger King and Subway. They are practically seen in all countries of the world.

Mixed Origins of Franchising
Franchising does not really have a clear trace of its background. There has been various information as to where the franchising business originated. These include countries like China, England, and Europe and of course the United States. It is even traced as far as the Middle Ages where the business opportunity issues back then was more on the lack of transportation for the goods to be transferred from one place to another. Other considered franchising as well as a means of establishing stands, vendors and a better means of being able to offer goods towards customers in other places within the coverage area.

Franchising at a Glance
Franchising is not a new term for defining business opportunities. It extends as far as home business opportunities for people who would want to be their own boss and hold their own business hours. Franchises would usually depend on the location to which franchisees would want them to be located, ideally in populated and commercialized areas for maximum exposure. Depending on the product or service to which the franchise caters, people can even do business from their own footsteps at home. This way the expenses to be incurred such as rent or warehouse allocation expense can be avoided, an expense that is certainly something tough on the budget allocation constraints of franchise owners.

Think Big but Start Small
A franchising business does not have to start big. Just like any ordinary business, it can start from the simplest and smallest business. Like most business endeavors, as long as they are managed properly, business can grow at an instant at any time. Franchises are not different from conceptualized businesses and the varying factor would be the people who would run it and how they would view such a business at a glance.

Placement and Scope of Target Market
Placement of franchise establishments, just like any other product that most people would be interested in today would have to analyze and survey the market class to which they would want to serve. It is not merely a place and operate venture. It requires gathering strategies and putting minds into action, the usual backbone towards success in business ventures.

There will always be issues concerning the target market and identifying what product or service to serve. This has always been the issue that makes businesses different from others and unless it is properly defined, a franchise or business will falter eventually if franchising business owners are not careful.

Case Studies And Business Communication

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We were frustrated, my colleagues and I, as we wrestled with a new business idea. We thought it was a great idea but we couldn’t effectively describe, in business communication terms, what it would mean to users.

And, out of our discussions came the idea of writing a case study. If you’re not familiar with them, case studies are a staple of business communication. More specifically, they’re histories of specific business initiatives.

They’re like articles, but they put the reader into the shoes of a person making a difficult decision. Other professions also use case studies; you’ve probably heard of medical case studies, for example. Medical students get a set of facts about a patient, and perhaps some background or context, and then must diagnose the patient’s condition or disease.

Business case studies have proven popular at some university business schools (popular with the profs, at least). In some senses, the case study is the next best thing to being involved in a real case. And, an effective business communication tool, as I’ll explain here.

So, why would this be of interest to you? Well, if you have to persuade others to adopt your point of view, or buy your products, or vote for you, then you might find a case study useful.

In fact, you may be doing something like that already. Whenever you tell a story that’s designed to make a certain business communication point, you’re using a form of case study.

During my brief foray into life insurance sales, for example, I learned that emotion sells policies, and not logic. That’s why people in the business have a raft of stories about people who did or did not have protection when they died.

The point being made is that you should life insurance, and that you should have the right kind and the right amount. Now, if you sold life insurance, you would quickly find that no one listens when you explain the logic, but they will listen — and act — if you have your case studies (your anecdotes).

So, having gone through all that, is a case study just a fancy name for an anecdote or story? Yes, to a certain extent it is any tale used in business communication.

But, when you think of a case study, think of it as a more elaborate and more logically constructed story. Typically, a case study describes an organization or manager facing a choice or dilemma of some kind, and the reader gets a number of facts about the options. After that, you, the reader, are challenged to make the decision. Some real-life case studies include a follow-up report, so readers know which real-life decision was made, and how it worked out.

Getting back to the business idea with which we started, my colleagues and I did not proceed, and the case study exposition became a moot point. But, had we gone ahead, the case study likely would have been the cornerstone of our business communication efforts.

Finally, if you’d like to read some case studies, simply go to your favorite search engine and type in this phrase (with or without the quotation marks): “case study examples” or “case studies” .

In summary, case studies are a special type of business communication; they help us understand real-life decisions, and are a useful resource for persuasion and education. Add one or more to your business communication toolbox.

Global Business Management At Centennial College

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Business has evolved across cultures and nations to international relations and multinational businesses, seeking growth and target audiences for their products and services. With the importance placed on efficient operations, ethical and responsible functions across all business activities, and sustainable development, many companies look for opportunities around the world for better resources to shape their businesses. Global business management is about maintaining company operations in a strategic view with the world resources in mind.

Anyone interested in making a good change and positive impact on your country”s and the world”s economies can study the Global Business Management (2880) program at Centennial College in Toronto, Canada. This business management Canada curriculum examines international business practices with a global business operations management outlook. Professionals and undergrads in business can expand their knowledge and open other paths in their career through this graduate certificate program.

What will students learn in the two-year Global Business Management curriculum:

Allocate resources efficiently to improve productivity and obtain reasonable results

Diversify to other markets, including international markets, to gain new customers, product development, and Improve supply chain management by analyzing make-or-buy decisions, improving operations using an activity-based cost system, and recognizing cost behaviour patterns to forecast costs and profit levels.

Use facts and data to substantiate strategic decisions and corporate plans.

Critical thinking skills in maintaining a company objectives through the use of budgets, balance scorecards, International trade concepts such as sourcing, purchasing, and product allocation and specific examples of the policies in foreign direct investments.

Business implications of the political, economic, and legal systems of a country, including risks, benefits, and ethical concerns

Functions of the foreign exchange market and the minimizing the foreign exchange risks

Market entry strategies, positioning a company competitively in a large scale, using a foreign market selection model

Global marketing and research and development strategies, including distribution, promotion, product, and price considerations in new markets

Understanding mergers and acquisitions and outsourcing as it impacts a company”s human resources on a global scale

As a graduate student, you will learn about project management fundamentals. This will help in managing the priorities and stress that accompanies this field. Students will create a project plan in a realistic project, collaborating with a diverse team of students to achieve the same goals. Furthermore, students can complete an International Business Plan in their final semester as a capstone course in their business management program. Students will apply a systematic approach to solve problems by describing the venture”s mission and goals, products, industry growth patterns, internal and external factors, cost versus benefits, and operations in international markets.

Centennial”s Global Business Management program provides a stepping stone to a master”s education in business and a fulfilling start of a career in operations of today”s big businesses. The business management course salutes its graduates for completing an intensive amount of courses within two years. International students can apply for work permits up to three years upon graduation. Graduates can expect careers in different disciplines in business with an edge to work with the international community and possibly travel and stay abroad. Possibilities are endless with international level; positions in advertising, brand management, human resources, operations, supply chain management, and foreign exchange trading. Multinational companies and e-commerce business are potential employers, as well as government agencies.