The world's easiest "management strategy" planning course Chapter 5
The ups and downs of a company are determined by the business strategy
There are many types of business strategies
Next is the formulation of business strategy.
A company’s business may be dedicated to one type, or it may operate multiple types. A business strategy is a thick vector that a company has. On the other hand, business strategy requires as many businesses as there are businesses. This is because the strategy is set for each individual business. This is the big difference between business strategy and business strategy. How many managers and consultants confuse this point. Communication is often different due to differences in mutual recognition, which often leads to trouble.
The good and bad of this business strategy has a great influence on the ups and downs of the entire company. Personally, I like designing business strategies very much, so when a good strategic design is made, I feel that a beautiful form emerges even if it is invisible, and in fact, it plays a role in the business performance of the company. Turn around.
Of course, business strategies must be formulated for each business. You can think of a business strategy that suits your company by referring to the business strategies implemented by other companies, or you can update the strategies that your company has done so far. However, business strategy is an important factor that directly leads to the next step in itself, so we cannot afford to make a mistake that goes back.
The types of business strategies include not only the “activity system” introduced below, but also management methods and growth strategy methods that comprehensively manage business units, game change methods that turn over major monopoly markets at once, and new business development. There are many methods such as, but here, for the convenience of the page, only one method of business strategy will be introduced. Many of the books on the market are about this business strategy, so why not look for books that have a business strategy that you think is necessary for your strategy?
"Activity system" that even small and medium-sized enterprises can beat major companies
By the way, here, I would like to introduce only the “activity system” as one of the methods of business strategy.
Also, the reason I would like to introduce this is that I personally like this business strategy.
As a management strategist, I find it very rewarding when this design is completed.
It is also very important and a source of competitive advantage for a company.
Even weak companies can compete with large companies by building this “activity system”.
As an example of this “activity system”, I would like to introduce the difference between the “activity system” of the famous hamburger chains “McDonald’s” and “Mos Burger”. It seems that everyone has eaten hamburgers from both companies, so there is no need to introduce them.
First of all, about the “activity system” of “McDonald’s”. As you know, “McDonald’s” has a store in a prime location in front of the station. This is because it is crowded and can attract a large number of customers. This busy customer base varies from children to adults. In addition, since there are many visitors, it is not possible to spend time serving customers and cooking, and because the tenant fee is high, it is necessary to keep costs such as material costs low. Therefore, the material, seasoning, and processing of the hamburger, which is a product, is rather standard and simple. In addition, in order to shorten the time for customer service and improve the efficiency of cooking methods, we focused on creating manuals to improve efficiency. In this way, “McDonald’s” has rapidly expanded its sales.
Following this “McDonald’s” business model, the hamburger chains struggled everywhere because they all competed with “McDonald’s”.
Therefore, “Mos Burger” has built a new “activity system”.
first. The emphasis was on the education of store managers and employees. “Mos Burger” focused on hiring and training human resources, thinking that the store manager and employees would invite customers. At first, we decided to choose a tenant property with less traffic than in front of the station. Then will customers gather? “Mos Burger” provides excellent store staff and coziness. Also, if the tenant fee is low, you can spend more time on ingredients and cooking, and you can provide a very delicious hamburger. In this way, if the number of “Mos Burger” fans increases, the number of repeaters will increase, the location will be a little bad, and even if the waiting time for cooking is long, customers will wait without stress.
Now, did you understand the difference between the business models of both companies?
In this way, both “activity systems” create a strong business model in which the individual activity elements are neatly coordinated and the chains are connected. Other hamburger chains such as “McDonald’s” are less likely to imitate “Mos Burger”, while “Mos Burger” is less likely to imitate “McDonald’s”.
Once such an “activity system” is completed, it will be difficult for other companies to enter the market, and it will be possible to compete with major companies.
Overseas cases where the activity system works
In addition, we will also introduce overseas cases.
It was Southwest Airlines, an airline that created a great “activity system.” The company is a pioneer of so-called low cost carriers (LCCs). In the United States, it is a rare airline that is consistently performing consistently, with most airlines slumping or failing.
Moreover, despite the low salary level, the company has a low turnover rate and is very popular as a company. Why is that?
The reason is that the “activity system” is in full rotation.
Airlines typically operate in a “hub and scope” manner, with aircraft and crew traveling to different airports. For example, an aircraft from Los Angeles goes to New York, then to Miami. It is a mechanism in which the aircraft and people move from one place to another.
However, Southwest Airlines has introduced a “point-to-point” flight method. The base airport is Dallas Love Field Airport. And as the focus airport, for example, Las Vegas, Chicago, etc. have a fixed destination and destination, and we have a mechanism to return to the destination.
In addition, airlines with various models must prepare maintenance equipment, mechanics, parts, etc. for each aircraft, but Southwest Airlines uses the same operating equipment, so maintenance costs are dramatic. It goes down to.
With the “hub and scope” flight method, which goes around various airports, it takes time for crew members and flight preparations, and the turnover rate of the flight is low, while “point-to-point” travels between two airports. Because it is only, the trouble of preparing for the flight is reduced and the turnover rate of the flight is increased. Since the base is fixed in Dallas, the crew members just go out and come back as if they were going to work normally. There is almost no need to go around without being able to make a day trip. Basically, there is no transfer, so you can set up a house. Nowadays, there are many “customer first” principles, and as a result of prioritizing employee satisfaction over customer satisfaction, a casual airline has been created in which employees do not run away.
In this way, the role of connecting one point to the other is a chain, and both the company and employees can be involved in management with peace of mind. It seems that there have been many crises until we found the method, but we have overcome it and have Southwest Airlines today.
This is also an excellent model of the activity system. A business that is tied to a strong “chain” can protect itself from the follow-up of its competitors.
BI redefinition and branding
Now that we have reviewed our business strategy, we need to redefine and brand our business identity (BI). Since we have created a business strategy, this is an activity to express it to stam holders such as customers and employees.
1.Redefining business identity (BI)
As with corporate identity, it will be a process to put that thought into shape by reviewing the above-mentioned business strategy. Specifically, think of it as creating a business logo, business slogan, etc. that expresses your business. Business identity (BI) is the determination and presentation of what a business is like. If this part is missing or shaken, the direction of the business strategy cannot be appealed. Therefore, we will review the business concept, message, target, etc., “who the business is for” and “how to provide it”. It is a task to clarify and decide the characteristics and individuality of the brand.
2.Business Identity (BI) Branding
Business identity (Once B is decided, the next step is branding. That is the branding of business identity. Even if there is competition, if this point is established, it will be involved in price competition. You can sell a lot of products without reducing the price. By deciding BB using brand name, logo, color, etc., you can let customers share a certain value and image. Branding of Gines Identity is an important method for increasing the profits of a company and stabilizing its management in the long term.