Lifestyle > Train of Thought
Question for Business people/Marketers
Don Jacob:
i'm a business administrations major-but my concentration is in management/accounting
but i'd answer it like this:
no, it's not necessary to have but in some caseses it may be advantageous or in others disasterous, it just depends on what the business is in. if the business is based in something say the restaurant business, no it's not necessary to have a unique positioning strategy because many successful restaurants have followed uniform posistion strategies that have been in place for decades/centuries. ex. sit down and order restaurants. but like i said earlier to have a unique position strategy can be advantageous, for examples when Ray crock bought Mc Donald's from the Mc donald brothers, he used a unique startegy to open up a different kind of restaurant for a developing maket...which succeeded GREATLY. It could also be disasterous though for example all of those avant gard restaurants in big cities that go belly up the first year because their market is too small/they couldn't develope one. so in my opinion a good answer would be to say no, but no not being a positive or negative.
Ant:
Most businesses do not have strategies. And even the one's that do have a formal "strategic plan" rarely follow it. Keep in mind, I didn't say businesses never need a strategy. I just said most business don't have and don't need "explicit" strategies. Explicit strategies often cause more harm than good.
This is counter to most management theory, but most management theorists don't run businesses. Nor do they do a good job of studying businesses.
Look around you can easily see this is the truth. I don't know how anyone could possibly refute the fact that most business do not have explicit strategies. My answer may annoy your professor, but its very much the truth.
How can you possibly think businesses really need something as vaguely defined as a "unique positioning strategy?" To say they need such a thing implies that every company needs to sit down and discuss "so what is our unique positioning strategy going to be?" But plenty of businesses get by without that discussion ever taking place. Hence a unique positioning strategy, or any form of strategic plan is not "necessary for all businesses" but may be "necessary for some businesses" (or maybe a better word is useful). But really it all depends.
Of course, again, every business has a "unique positioning strategy" because they are all in a unique position, and acting in a unique manner.
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On a related note... most business professors suck. So do most business books. If you really listen to these guys and follow their advice its a recipe for poor performance. If a professor was good he wouldn't teach. Of course there are some good business professors, but they're a rare breed.
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In direct response to Don R's comments
--- Quote ---you seem to imply every company is just blundering their way through everything but thing are far more complex than this.
--- End quote ---
I am implying this, and that's what makes business strategy so complex. You're making things simple by suggesting companies need strategies. But the real world is more complex than that. An organization's environment may be too confusing for a strategic plan to make sense. Or maybe the managers don't have time to sit down and discuss such silliness.
Don Rizzle:
--- Quote from: Ant on November 18, 2006, 11:28:22 AM ---
--- End quote ---
I am implying this, and that's what makes business strategy so complex. You're making things simple by suggesting companies need strategies. But the real world is more complex than that. An organization's environment may be too confusing for a strategic plan to make sense. Or maybe the managers don't have time to sit down and discuss such silliness.
[/quote]There are lots of different strategies they use i'm not saying these will stay static because managers and directors should be constantly reviewing them to ensure they meet their firms objectives, which primarily will be profit maximisation.
such stratgeies could involve who to target their product to if you take the restaurant example, most traditional chineese restaurants are empty at sunday lucnch time, because we normally make a sunday roast or eat one at the pub or something, so some chineese places started to run an all you can buffet at an affordable proce and their restaurants are packed, they used a pricing strategy and modified their product to counter their loss of trade. Now more recently I've seen others modify this strategy even further by instead of making it a buffet and providing all you can eat pricing but made to order, this minimises waste and improves quality because the food hasn't been left around. you may argue these are just tactics, but the tactics are used to implement the overall strategy and therefore ensure you meet your objectives.
Having a strategy also helps ensure you get all the elements of the business on the same foot, so they're all thinking along the same lines. You can have a excellant product but if your marketing or marketing don't know how or who to sell too, then it probably won't make any money.
I do agree the books are always as helpful because every business will have their own business model, but their are fundemental business principles can be learnt and the rest will come down to experience.
Ant:
Again... this sounds great in textbooks, but your missing the point. Quite simply:
EXPLICIT STRATEGIES ARE NOT NECESSARY AND OFTEN ARE NOT USED.
If you study businesses (actual businesses, not the subject of business) you cannot deny this truth. If you study business, it appears otherwise. "Business" literature puts strategic planning, strategizing, etc. front and center. If you study "business" you see strategy everywhere, and it appears to be soooooo important. If you study real businesses, you find that it's not.
You say:
--- Quote ---managers and directors should be constantly reviewing them to ensure they meet their firms objectives, which primarily will be profit maximisation.
--- End quote ---
This is wrong in a few ways.
1) Managers and directors do not need to constantly review strategies. They don't even need explicit strategies. Again, if you study businesses you will find that most companies exist without doing what you are suggesting. So how can this be necessary?
It's also not always feasible. In most businesses strategic discussions are not even feasible. Lots of business people have no desire to talk "strategically." They prefer to talk plainly. They talk about how can they cut costs, how can they improve service, what should they being doing to improve, etc. But they don't sit down in a conference room, and edit their master strategy document once a year.
Instead, many companies improve through casual interaction. So and so say... let's try this. It seems to make sense. So they do it.
2) Profit maximization is not the ultimate goal. I hate when people suggest it is. For some firms it is, but firms that care primarily about profit maximization are at a strategic disadvantage to firms that care passionately about other things. I think a much better objective is "value maximization." Meaning, businesses should focus on making their customers happy by doing things that are valuable.
But that's just my opinion. But many companies exist without a concern for "profit maximization." Google's initial passion was to be the best at search. That's why they existed and that's what drove them to be so successful. Their core objective is to "organize the world's information and make it univerally accessible."
The owner of a coffee shop might aspire to make amazing coffee. Restaurants owner's have a goal of being the trendiest restaurants... having the best tasting food.. etc. Clothing companies might be obsessed with having lots of people wear their clothes.
Tons of new internet companies are selling for millions of dollars, but they aren't even making money. Youtube sold for 1.7 billion, but they are losing money. They weren't concerned with profit maximization. They were concerned with being great at sharing videos, social networking, and whatever else made them tick.
Those guys weren't sitting around with some retarded strategic plan. They were just doing what they thought made sense.
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The worst thing about business literature is it tells everyone "You must do this." But that's never the case, and often the literature is dead wrong.
They tell people "if you want to start a business, you need a plan." That's retarded. Most mega companies started without a plan. Just a few people dicking around trying to do something cool. Google started with two guys screwing around with search algorithms.
They didn't even want to make money at first. The owners fought for months about adding Advertising to their site. They didn't want to because they thought it would make the site cluttered. And it would decrease the efficiency of search.
Eventually they changed their minds, and Google is now worth 130 billion. Not only didn't they have a "plan" but they didn't even want to do the thing that made them so rich. They cared about other things more than they did profit maximization.
Mo Z. Dizzle:
i finally figured it out; a vague description is that a market0based company tries to get as much of the market share as they can.
my friend told me this tonight; he asked the prof on wednesday and then told me the next.
at that time, i didn't know he asked the prof; when i asked him where he got the info from that day he said he didnt remember.
and tonight he tells me that the prof told me.
a little frustrating because i could've ripped this yesterday and done other work tonight but whatever.
ill show you guys whatever i typed up, it's pure BS but i think it'll atleast get me a few marks.
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