The Concept of Strategic Management

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The public sector in Bangladesh has been flourishing by leaps and bounds until 1980 where Bangladesh has preferred the trail of a market economy for expansion by pursuing its economic detection. Although carrying out successive research, governments have geared up in such manner so that they would like to incise public spending radically, but they have not succeeded. For this reason that the lower middle class and the people below the poverty line are continuing to show support for most services provided by the Government. It may be mentioned here that about 60% of the total population of Bangladesh belong to this group.

Reforms and changes undertaken by the World Bank supported Sectoral Adjustment Programs have raised serious questions about the way the public services are run and how users are treated. Managers and politicians at the central level have had to rethink about the management of public sector institutions in Bangladesh. Most of the reforms and changes have been based on two main ideas: firstly reduction of public spending and secondly, the market mechanism is a good thing, if a market style of relationship is suitable, it should be introduced. In many respects the public sector is different from private sector. In public sector the activities of the Government are rarely based on the need to attract customers. Prices are not normally set to maximize profits or market shares. Investment decisions are not generally based on prospective profit. Motivation may even be different; earnings do not wholly motivate managers and workers. "What all this means is that the values ​​require to run the public services are different from those required to run a successful business. For example, it is rarely appropriate to withdraw from parts of the 'market' because they are no longer profitable. ' Customers' who cannot afford to pay still have entitlements, which they would not have if they were receiving service from the business. Those entitlements derive from citizenship and social policy rather than from cash.

It has been further argued by the management's specialists that the values ​​of equity and justice have to play a vital role in the administration in a way that would be irrelevant to most business. 16% of total GDP is controlled by the public sector in Bangladesh. Any reduction in the size of the public sector would be a painful job for the politicians. In response to the growing demand for public accountability and improved performance, public management scholars and practitioners have been coalescing for quite some time around the theme of which have been identified by Hood as being, 'New Public Management is the idea of ​​a shift in emphasis from policy making to management skills, from a stress on process to a stress on output, from orderly hierarchies to an extendedly more competitive basis for providing public services, from fixed to variable pay and from a uniform and inclusive public service to variant structure with more emphasis on contract provision 'Hood.

It is argued by strategists like Joyce, Quinn and others that in the organizations of any size and complexity, it is possible to manage for result in the long or short run without a well-developed capacity for strategic management process to provide a coherent approach to establishing, attaining, monitoring and updating an agency's agenda.

Joyce claims that strategic management can help new public services emerge. It can do this by helping to decide what should be done and how it should be done and by creating the dialogue and consensus need to make the changes. He further argues that in the absence of effective strategic management, the new public management services will still emerge, but in more haphazard way. Strategic management, when practiced well, can help to call for transformation to occur more efficiently and creatively. He further states that this is not to say that strategic management is a magic word, or that it can be continued on to work perfectly every time. It is certainly not a simple method of bringing about fundamental changes. One of the key challenges for public services management in the years ahead is to find out ways in which strategic management may be developed and applied to ensure that both performance and innovation are achieved in the interest of better public services.

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Source by Kh.

Tips To Creating Your Own Marketing Strategy

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Developing and creating marketing strategy is an essential for any types and forms of business. If you do not have one, it is a must that you create one, your efforts, time and money are likely to be inefficient and useless.

You should create your strategy which focuses on making sure that your products and services meet what the customers want and needs. This is important in order to develop a long-term and profitable relationship with your customers.

The main goal of a marketing strategy is to identify and to communicate with what benefits of your business could offer to your target market. Quite genius!

In order to achieve those goals you have set in your mind, you will need to create a smart strategy which can respond to customers’ perceptions and demands.

Tips below could help you define your key objectives and goals in reaching your customers, on the other hand, this could help you identify which customers you should focus on. Smart list for smart and effective action.

  • Identify your Key Elements. The acknowledgment that your existing customers will fall into particular groups or segments is one of the key elements for a successful marketing strategy. Characterize them by their “needs” and “perspective”. Market research could help you identify these groups and especially their needs, address them in a more fruitful way than your competitors, this should be the center of interest of your strategy.
  • Strengths and Weaknesses. Your strategy takes account of how your business’ pros and cons will affect your marketing. A genuine Strengths, Weaknesses, Opportunities and Threats analysis could be a great start, to begin with. This one is a substantial idea to conduct market research on your existing customers, it will also help you to build a more genuine portrait of your reputation.
  • Developing your Marketing Strategy. Understanding your business’ pros and cons and the other external variables to consider, you could develop your strategy that engages to your own strengths, match them to the transpiring opportunities. These questions below could possibly help you develop your marketing strategy:
  1. What changes are taking place in the business’ environment?
  2. Are these opportunities or threats?
  3. What do I want to achieve?
  4. What are the customers’ demands and needs?
  5. How do I target the right potential customers?
  6. Which are the best way to connect with my customers?
  7. Is there something missing with my customer service? Do I need to improve it?
  8. If I change my products and services, could it be possible that it will be more profitable?
  9. How do I price my products?
  10. Which is the best way to promote my products?
  11. When can I finally conclude that my marketing is effective?
  • Tips and Drawbacks. Think about how you can get the most out of your existing customers before looking at new markets. It’s more economical and swift than finding new customers. Take time to think and consider, could it be possible to sell more to your existing customers? You could always search for ways of improving the possession of customers. Your marketing strategy document should:
  1. Examine the different needs of different groups of customers
  2. Focus on a market niche where you can grew rapidly
  3. Goal to put most of your efforts into the 20 percent of customers who provide 80 percent of profits

Avoid these:

  1. Makes assumptions about what customers want.
  2. Ignores the competition.
  3. Trying to compete on price alone.
  4. Relies on too few customers.
  5. Trying to grow too quickly.
  6. Becoming complacent about what you offer and failing to innovate.
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Source by Chen Wang

Developing A Business Startup Success Strategies That Work

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It can be easy to lose sight of the very reasons why you wanted to open your business startup. You can get wrapped up in the day-to-day operations, leaving little time to focus on what makes your business startup standout in the market. Having a strategy in place that allows you to keep you motivated can ensure your business stays on a path of success.

Fall In Love With Your Business

Any business that you invest your heart in soul in should be the great love of your life. You need to nurture it and watch it grow. Having a real passion for what you are doing and the products and services you sell can make your business startup a real labor of love. You should have a real hunger that drives you to do well. Making your business startup idea one that you can stand behind and love to eternity is the first step in achieving success.

If it seems that you are losing that connection with your company and not really feeling the love, take a step back and allow yourself to remember how it all started. This can spark your emotions for your business and allow you to fall back in love with what you are doing. Your passion for your business is often times enough to get you through the challenging times.

Surround Yourself With Good People

From your employees to your professional network, the people that you surround yourself with can have a strong influence on your business startup. These very people can give you new ideas and help educate you on your business’ operations.

Having positive people to lift you up can be a strong motivator and allow you to have someone to bounce thoughts off of when you feel uncertain about a decision. Use your network to gain valuable information and learn from your peers on what mistakes to avoid. They can prove to be a big part of helping you run your business and ensuring it is successful in its endeavors.

Don’t forget your employees; they can be a big part of keeping your focused on your business startup on a daily basis. Good employees will drive your customer service and in turn your revenue. When your employees believe in your business and the vision you have set for it, it makes it that much more important that you deliver now and into the future.

Create A Marketing Strategy

Having a marketing strategy in place to promote your business is necessary to help achieve strong revenues. You should have prepped and planned a strategy that you want to adhere to market your business startup to your customers. It doesn’t have to be a large portion of your budget, but it should include some effort on your part.

Think about where your customers go for their information. Be visible to them and make sure you use every opportunity that is available to you to market your business with both new and existing customers. Try social media, check into local advertising, hold and an event, and use what is available to you to reach your customers and introduce your business’ products and services to the masses.

If you stay aggressive with your marketing plan, you are sure to garner the attention of your current customer base as well as a new group of potential clients. This can bring in more revenue and keep your business startup on a path of success.

Get To Know Your Customers

It is your responsibility as a business startup owner to know everything there is to know about your customers. You should have a strong idea of who they are, what their likes are, and where they are located. When you truly understand your customers, the more effectively you can serve them with your products and services.

While your attention may be turned toward gaining new customers, don’t lose sight of your current clients. They are the bread and butter of your business, and you want to make sure you are not replacing existing customers with new customers at a losing pace. Show your loyal customers how much you appreciate their business. Without them, your business will only see marginal success, and you want to make sure to grow your business startup rather than be stagnate in its approach.

Take Time For You

It may be difficult to imagine, but you need time away from your business startup. You may think that you can’t take time away or that your momentum will crumple without you, but taking a vacation every now and then is one of the best things you can do for your company. When you step away for a moment, you allow yourself the opportunity to recharge and refresh. You’ll be able to see your business in a new light and be surging with motivation when you return.

You’ll be surprised at how much a vacation from your business startup can do for you. You’ll be filled with new ideas and solutions to problems that you previously thought unsolvable. Being able to see your business from a new angle can be just what you need to take it in a new direction, move it forward, or reach to new heights. Your business startup will appreciate the time you took, and you will be ready to take on new challenges with a fury as your drive will be restored and you will feel anew.

Plus, you have good people surrounding you that you can trust to steer the ship when you are away. Rely on your employees and allow them to do what you hired them to do. You’ll be pleasantly pleased with how quick they are to pick up the slack when you are away and the positive results you’ll see upon your return.

Having a strategy in place can ensure your business stays on track and experiences great success now and into the future. It is important to stay focused, think about your customers, and take a break when you need it. By embracing your business startup and trusting in yourself, your business will reach the success that you deserve and have always envisioned.

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Source by Pierre Jean-Claude

A Marketing Strategy In Its Simplest Form

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Marketing strategies come after the objectives and vision

and mission statement and before the action plan and tasks.

The marketing strategy is how you are going to carry out the

objective.

Tasks contain the detail. Tasks are what you want to list

and keep track of in your day timer system not your

marketing plan. Whether that is in Outlook, a Franklin-type

system, or in your electronic appointment system like a Palm

Pilot. It doesn’t matter if you prefer to start with a task

and work your way up into the objective or work from the

objective down. Both should accomplish the same result.

After creating the objectives, and making sure they are

S.M.A.R.T. (specific, measurable, action-oriented and

achievable, realistic, and timely), focus on one and

progress to the Action Plan and Tasks. Completing one at a

time in this manner will expose any gaps or duplicates.

Occasionally, there may be several strategies to one

objective or several objectives for one strategy. If this

occurs look for duplicates. Duplicates say the same thing

in different words. This review will keep the plan clear

and concise.

In my consultant role, I consistently see two mistakes made

during the strategy clarification process. Keep these in

mind as you define yours:

1. Timeframe not considered or matched so that it can

deliver the results desired.

2. Choosing what is comfortable but doesn’t reach a large

enough profitable target market.

Timeframe

Strategies need to be designated as short-term, medium-term,

or long-term. The length of time for each depends on the

business focus, market, and its maturity stage. For a new

business owner, maybe all you can handle is a 3-month plan

— short term. Whereas an established business may state

theirs in longer times: short-term 1 year, medium 3 years,

and long-term 5 years. A mature business may be 3, 5 and

10.

Operating in a 30-day vacuum for too long creates flash

fires that consistently need to be distinguished. When

this occurs the business is running you. At day 31 it’s a

scramble to create the next 30-day plan and the cycle

repeats. After so many of these cycles even the most

patient person will give up on planning.

Balance for a new business will have more short-term

objectives and strategies and less medium and long-term.

This normally occurs because testing and finding what works

is still a big part of their process and the marketing

system is still in flux.

Balance for an established business (5-10 years) would have

more objectives and strategies under medium-term. Whereas a

mature business (ten years up) would be striving for more

smoothness in their long-term strategies except for new

product or service development which begins its heaviest set

of strategies in the short-term.

Choice

Choosing the right strategy isn’t always about setting a

strategy comfortable for the solopreneur. The correct

strategy is one that is right for the prospects. The best

one delivers the results desired. Normally, one that

reaches the market in the fastest and easiest manner using

the least amount of resources.

I hear comments from solopreneurs like this: “I don’t like

to do that.” “I simple can’t possibly do that.” “I refuse

to do that.” “I don’t have the time.” This closed mind

just because its uncomfortable is their saboteur to success.

Afterwards they justify it with, “Money isn’t everything.”

They logically know that its natural to justify any decision

we make but they don’t see the connection. Some figure

this out years later, others never get it and go out of

business, and others finally get themselves to that

comfortable place.

The perfect strategy services both the comfort level and the

broadest market possible so it may deliver the desired

results.

Don’t waste time doing what you are comfortable with that

doesn’t reach a profitable enough market. This wastes

valuable and limited resources and creates failure.

Once you incorporate these important features into your

strategy development you will your plan easier to follow and

implement.

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Source by Catherine Franz

Procurement Strategy – 10 Reasons Why You Should Use Category Management

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Category Management is an approach to Procurement that is gaining ground in both the public and private sectors. In Category Management products or services that have similar characteristics and are bought from similar supply markets are grouped together and treated as a discrete group or category.

These categories are then more manageable from a procurement perspective because the items in a category require the same supplier market intelligence, the same sourcing strategies and similar supplier relationship management programmes. Although these activities are not new their application may require a change to current organisation structures and roles and responsibilities. Like any successful change, the benefits need to be sold to the rest of the organisation. Here are 10 reasons you can use to do this.

1. It links customer requirements with supply market capabilities. Once you know what core supplier capabilities deliver your customer requirements you can identify and work with those suppliers that are “best of breed” in that capability.

2. It enables the business requirements definition or specification to be developed so that it delivers best value. Defining your business requirements is a team game in that it identifies both the user requirements and commercial expectations. A balance between the two is what delivers best value.

3. It ensures that the right skills and experience are applied to the right activity within the category management process. Category management creates the critical mass needed to have experts for each of the activities in this process rather than generalists having to do a wide range of them.

4. It ensures that all relevant spend is included in the category so that your leverage is maximised. Without category management there is a danger that the purchase of individual items are spread across your organisation in quantities that are too small to get volume related benefits.

5. It allows you to anticipate and plan for changes in technology. By knowing how customer requirements might change (and what that means for technology) and what your major suppliers are planning, you can identify any gaps that might occur in the future between the technology needed and what is available. Do this soon enough and you can stimulate your suppliers to do something about it. Identify supplier innovations early enough and you can help shape the offering made to your customers.

6. It reduces risk. Creating categories and putting them under the proper management of experts enables you to spot any trends or developments that might create a commercial risk and do something to prevent or mitigate it.

7. It develops the right supply capability both for today and tomorrow. This is similar to the technology reason. If you can get an understanding of what capabilities are going to change over the next few years and what suppliers plan, you can influence both.

8. It helps to build good communications across the entire value chain. We should not forget that value chains are made up of people. Category management gives you the visibility and opportunity to communicate the right message in the right way to the right people to get the result you want.

9. It builds trust and co-working across all of the value chain. Trust comes from delivering your promises and not being unfair. Understanding your categories means that you can set goals for everyone in the value chain that meet their needs as well as yours and is within their capability.

10. It ensures that many supply options are considered rather than just the obvious one. When someone is responsible for developing a commercial sourcing solution for a user need but they do not have the right experience, it can be too easy to jump to the first solution that springs to mind. The category management process ensures that options are considered.

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Source by Stephen C Carter

How to implement a Business Strategy in Your Organization

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Ask any successful business owner and they will tell you their success was not based on luck. The success – and failure – of a business is dependent upon the strength of their business strategy. A successful strategic plan employs cost reduction, development, and sustainability techniques to ensure a bright future. You need to know your business inside and out in order to create a comprehensive and realistic plan.

Your strategy should help you achieve the objectives of your business. A business strategy is the driving force behind any organization, and takes the form of an official report. Businesses are self-sustainable systems, when you change one thing in the system; It has a positive or negative chain reaction. Like an organism, businesses learn how to adapt to the change if it is positive, and rectify the situation if it is negative.

Organizations have several phases of development, including creativity, direction, delegation, and consolidation. A company may start out with lenient rules and regulations, but as time progresses management adopts more efficient policies that hinder creative thinking. Companies mature and lose sight of their goals and mission statements, with more of an emphasis placed on individual projects or initiatives. As a business enters maturity processes, departments, and policies are refined to reunite the organization.

Ways to Conduct Business Strategy

Historically there are two ways to develop a business strategy, using the "bottom up" and "top down" models. The bottom up method is when employees generate ideas on the floor and the best results are passed onto management. The top down strategy is when business owners create the strategy and implement the changes without seeking employee feedback. Unfortunately, both models fail to include all of the employee feedback.

The new method of developing a business strategy uses a collaborative process, which is when managers and employees exchange information and work together to create a sustainable solution. It is a team-oriented process that bridges the gap that exists between managers and workers. Before you create a business strategy ensure you have the additional resources to carry out the task without interfering with normal operation. Assign tasks and delegate responsibilities while keeping to a defined chain of command.

Functional versus Operational Business Strategies

There are two types of business strategies: functional and operational. The functional strategy focuses on general ideas and a variety of tasks for different departments. The generality is a major disadvantage, however; areas of concentration include marketing, new product launches, human resources, financial assets, and legal issues. Functional strategies provide a nice overview of the business but do not tackle the important issues employees encounter day-to-day.

Operational strategies are ideal for businesses that want to reduce costs and streamline processes because it is much narrower in scope and requires accountability on all levels. The detail oriented plan encompasses everyone and everything, from the number of cashiers on duty to how much inventory is carried at a given time. A strategy is unique to each business and revert the needs and requirements of the company management.

Implementing a Business Plan

A business plan is the textual version of a strategy, as it includes pertinent information regarding the company, including: vision and mission statements, measurable objectives supporting the vision, actionable tactics meeting the objective, resources, milestones and timeframes, accountability and role designsations, as well as internal and external risks. The business strategy is not evergreen and should be evaluated routinely to ensure the company still has the competitive edge.

A business plan includes the primary and secondary objectives of your organization, an analysis of current policies and procedures, and the development of new policies or procedures to correct weaknesses within the organization. Before beginning a strategy, it is helpful to conduct a SWOT analysis, which helps identify weaknesses and loopholes within the organization. Your competition capitalizes on your weaknesses, thus it is essential to continuously evaluate your business.

Developing a Competitive Strategy

Brainstorming and collaboration are essential to the development of a successful business strategy. Begin the process by identifying the strengths and weaknesses of the organization. Without erasing responses, continue to identify current opportunities that help your business succeed. Finish the SWOT analysis by identifying threats or risks that place your business in danger. Identify how your company beats the competition, outlining the various strategies already in place.

Identify your current target audience and list potential audiences in the form of demographics. Assess current market conditions and how your company can defeat the competition. Reevaluate how you are reaching current and potential customers and consider your overall marketing plan. Think positively and develop solutions to overcome any weaknesses that you have discovered thus far. Admitting your weaknesses is the hardest part of drafting a business plan, as most companies want to appear strong and mighty. Research why you have these weaknesses and find realistic solutions to the problems.

Business owners often become so caught up with their work that they fail to concentrate on their business strategy, which is a significant source of cost reduction. Achieve your goals by dedicating time each month or week to address issues surrounding the operation of your business. Make the process a tradition, ensuring operations are aligned with current goals and future forecasts. Make your business stand out from the competition by utilizing different techniques to attract the most people.

A successful strategy overcomes organizational hurdles by understanding customer needs and predicting the unpredictable. The formation of a business strategy is a science that combines current circumstances with a variety of internal and external variables, addressing immediate and long-term goals of the organization. The implementation of the strategy is rolled out slowly, starting with management. The plan encompasses everyone; However, customers are indicative of the final result.

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Source by Thayne Carper

Business Plans – Some Thoughts

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This post looks at a couple of critical areas relating to business plans. Initially, I identify 8 reasons why a business plan is important, I then consider what are arguably the 5 most important questions which need to be answered quickly by the plan, and finally I look at what writers of such plans can do to make them more compelling. This article is not intended to look at detail at the different sections which should be included.

Why is a Business Plan Important?

It forces management to think through the proposed business in detail and to consider tradeoffs

It enables management to plan company growth and to anticipate changes in a structured way

It allows goals to be set, against which the project’s and participants’ future performance can be measured

It states what the venture will not accomplish

It enables quick and objective decision making

It is a persuasive argument for investment funds

It commits the management team to a common set of goals, and contains a blueprint for achieving those goals

It becomes a vehicle for communication

5 Most Asked Questions

We all know that a reader of a business plan is not going to spend a long initial time reading it. Further reading will only take place if sufficient interest is generated. In fact, you need to make a positive impression within 5 minutes if you do not want your plan rejected. So, what are the 5 most asked questions which need to be answered in that time frame?

  1. Is the business idea solid (answered initially in the Executive Summary)?
  2. Is there a sufficient market for the product or service? (again, answered initially in the Executive Summary)?
  3. Are the financial forecasts healthy, realistic, and in line with the investor’s or lender’s funding patterns (answered in the Financials section)?
  4. Is the key management described in the plan experienced and capable (answered in the Management section)?
  5. Does the plan clearly describe how the investors or lenders will get their money back (answered in the Exit Plan section)?

What Can be Done to Make the Plan More Compelling?

There are a number of relatively simple and, possibly, obvious things, including the following:

  • Ensure that your facts are accurate. Wrong facts can lead to a loss of credibility. Facts must also be attributable to a reputable source;
  • Make it the ideal length. No ideal number exists, but less than 10 pages is too short, 30+ pages should only be used for complicated businesses or products, suggesting that about 20 pages is likely to be sufficient. Appendices should not be more than the length of the plan. It should also be portable so that readers can carry it when travelling;
  • The plan should ideally cover 3-5 years, or up to exit strategy, if earlier;
  • Financial projections should not be overly detailed. Monthly for the first 2 years, quarterly for second and third, and annual for the fourth and fifth;
  • Use positive language. The right language can convey you as thoughtful, knowledgeable and prudent, wrong language might indicate inexperience or naivety. Use superlatives with great care. Avoid ‘best’, ‘terrific’, ‘wonderful’, ‘unrivalled’;
  • Use third party testimonials.These give meaning and depth to your offering;
  • Use business terms. You are in business, after all;
  • Think of the style you will adopt. Use numbers for impact. Investors and lenders love numbers! Use bullet points. These draw attention to specific information, break up boring blocks of text, and eliminate the need to write long sentences.
  • Use appropriate visuals. Think of using graphs and charts (but make sure you use the right type for the purpose). Use photographs and illustrations.

Conclusion

Whilst the above points are important, the most important aspect of the plan is the content. Getting this right is critical to you achieving the plan’s aim.

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Source by Chris Mobbs

The "Boiled Frog Phenomenon"

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As (Polard, 2004) mentioned, If you take a frog and put it in a pot of extremely hot water, it’s obvious that frog will jump and try to get out of the water. However, if you put that same frog in a pot of water that is tepid, and turn the heat on very low, that frog will lay there very quietly; and as the water gradually heats up the frog will calmly fall in a state of unconsciousness; and eventually allow itself to be boiled to death.

Now many of us maybe asking why didn’t the frog jump out of the pot. After all, there was no barrier between him and his freedom. Well a big reason why the Frog did not jump is due to the fact his threat sensing capability is generated by unexpected changes, not slow ones but changes that are gradual. His survival threat was below his ability to identify those changes.

The whole inference of the frog metaphor for organizations is that we as a whole should try and identify the threats of our survival at an early stage when we still have time to plan rather than react to that particular threat; which will be too late. Furthermore, we must also learn how to reduce our threshold of change in order to be able to identify smaller changes that are occurring in our environment.

A perfect example of the Boiling Frog would be our government; they continue to ignore continuous threats to our economy survival. Our government tends to react only to sudden changes and situations. If we look back at September 11th, 2001 that particular incident was a perfect example of the Boil Frog. According to many, the government had great understanding and knowledge on terror attacks; however they failed to plan ahead and at the same time were very careless about information’s they had. As a result, disaster strikes which finally leads them to make better changes.

If we dissect the term ” The Boil frog Phenomenon” in business situations, it will show how organization are not able to identify slow and gradual threats within the organization and of course react only to sudden changes. By organizations focusing only of the satisfaction of key consumers, they failed to detect the continuous threats that the opposition is putting out there; which could play a huge role in the market dynamics in a short period of time (David, 2007). If we really think about it, we don’t have enough proof that key consumers will always stick around when our competitors are putting better products out in the market.

As a result, organizations should react at an early stage when there’s still time to plan rather than finding themselves in a difficult situation at a later stage. Organization should try their best to not get caught up in the boil frog phenomenon. In fact, it would be to their advantage if they could try recognizing threats that could be harmful to the organization otherwise the survival for such organization could be extremely difficult in today’s very competitive industry.

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Source by Daniel Polynice

Business Development Strategy – Next Years Planning

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I’m amazed at how each year slips by just a little more quickly.

Only a few weeks ago I was running the San Juan River in Utah – blazing sunshine and ninety degrees in the shade. Now it’s Fall already. And hey, I live in Southern California – in some places it’s almost winter. Friends of mine back East are talking about 30 degree temperatures – or colder. Even snow flurries.

Blink – and it will be November, then Thanksgiving, and right its heels – New Year’s. All of which is great if you love to ski, or snowshoe…

Which brings me to every businessperson’s favorite indoor sport – planning.

Each year around this time I urge clients to dust off last year’s business plan and compare it to what is really going on. Because many people – believe it or not – forget what they committed to for the year. Oh – they know their sales and profit projections – but most people don’t pay close enough attention to the other issues. Things like market development, new customer growth, distributor relationships, customer services improvements, even new products: all the things that make it possible for a businesses to grow and prosper year after year.

If you haven’t done so recently, now is a great time to review this year’s results, and plan for the coming year. Take a look at how you are doing compared to how you hoped you would do. It doesn’t matter what month you are in – just compare your results to date to this month last year. And if you’ve already built next year’s plan, you may want to consider it in a new light.

The typical approach to planning goes like this:

Start by setting a goal for next year’s sales growth.

This figure is often arrived at by multiplying last year’s results by some acceptable factor. In business school they taught us to use 10% if we didn’t have a better idea. This ten percent shows up again and again – I think it has something to do with having ten fingers. Standards vary from industry to industry – ranging from 5% to 25%. But in today’s economy, many people will consider it a win if they just remain even with where they were last year.

Next, add solutions to a few key problems you’ve been meaning to address. Follow this by some enhancements to your product line – and there you have it – instant plan!

Those of you who’ve read my book know that I encourage people to think differently.

Here’s a process I’ve used with all kinds of clients; it has led to some truly inspiring – and profitable – results:

Step 1

What do you – in your heart of hearts – want to accomplish this coming year? The key words here are “want to do.” Not what do you think will happen, not what will the market let you do, but what do you want to do.

When you answer this question, it does help to think about things like money – revenue, profits, cash-flow (as if anyone wouldn’t) – but also consider other non-monetary details as well.

Think about what new products or services you’d like to introduce, what markets you’d like to branch into, how you’d like to improve your relations with customers, how many new distributors you’d like to add, how you will make thing better for your employees, partners, even your community, and of course, what lifestyle and “work- style” changes you’d like for yourself.

For each of the targets and goals you are about to set – why do you want to set these targets. Make sure your reasons strongly support you.

Step 2

Learn what you can from whatever has happened over this past year. This is something many of us simply don’t do.

For example, make this year the year you act on the knowledge that it takes three months to train a new distributor, not the four weeks you generally plan for. You’d be surprised at how many entrepreneurs repeat variations on the same mistakes over and over again.

Deliberately capturing the lessons of the past year, and thinking about how to use that new knowledge can provide major opportunities to boost profits.

Step 3

Set targets which will inspire you and your team and get out of bed every morning (even when it’s snowing.)

Instead of using that 10% multiplier – or 25% or whatever – come up with growth numbers that you believe in and which will make it all worthwhile. Say you are committed to 35% growth. But you’ve never had more than 15%. Well how are you going to do that? What would it take? Is it possible? If you believe it is, but you don’t know how yet, don’t worry. You’ll tackle that in a minute.

Step 4

Now is the time to review changes in your market.

Are there new factors – changes in customer buying behavior, shifts in the demographics, new issues in your industry and fresh competitor activity? Consider how these changes will make it easier or harder to achieve your bold targets.

Do any of these changes cause you to rethink the targets you’ve set? If so, go back and make adjustments you feel are necessary.

If you’d like a list of the kinds of questions I ask businesses, send an email to stratq@lemberg.com.

Step 5

Figure out how to reach the targets in Step 3.

How can you achieve the targets you just set? Do you know how? Will that plan work? You may have to work backwards using the Merlin Method. (For those of you who don’t know, Merlin was a wizard who was born old and lived his life getting younger. What he called seeing the future was really just looking into his own past.) So use this idea to create action plans.

This is the method I use successfully with my consulting clients to transform their businesses. I’ll give you a quick overview:

Visualize those bold targets as already met. Looking back from the future to the present, ask what was the final step or milestone you achieved before completing the goal? And what was the step before that? And before that? All the way to the present day. Check for reasonableness.

That’s your action plan.

Believe me, this works! Do this for each of your targets and goals, then execute that plan, and you can almost guarantee a breakthrough year.

In a future article, I’ll write more about the critical success factors you need to review.

Best regards,

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Source by Paul Lemberg

Strategic Management of Your Small Business

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As a small business owner, the things you want to achieve with your business are not always written down. Advisors will say "you need a business plan", bank managers will insist on one before approving that vital loan you need to fund your expansion. Whether or not you codify what you want for your business, you should have an understanding of what strategic management is all about so you can drive your business forward, ensuring you can achieve / maintain sustainable competitive advantage.

Strategic management in business boils down to 3 simple questions:

  1. Where are we now?
  2. Where do we want to be?
  3. How are we going to get there?

Where are we now?

The first question looks at the situation the business is in, this situational analysis can take many forms but as a general guide think about doing SWOT and PEST analyzes of your current position. Don't be frightened by these acronyms, they are really easy to grasp and can provide surprising insights into your business and develop your thinking. You could brainstrom these with other members of your team, or your family / friends if you are a lone wolf.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal aspects of your business: What are you good at? What makes you better than your competitors? What don't you do so well? Where could you improve? Opportunities and threats are generally external, so what opportunities are there in the marketplace? Threats could be from new competitors entering your market.

Next, it is vital that you look to the wider external environment, there are many acronyms for this type of analysis (STEP, PEST, STEEPLE, STEEPLED to name a few) but they all amount to pretty much the same thing: Political / Legal , Economic, Social and Technological factors. I won't go into great detail about these as they are self explanatory, for example, the advent of the internet (Technological) has and continues to impact massively on how businesses operate. Analysis of the wider environment can help you to spot opportunities for growth or highlight the need for change.

Where do we want to be?

So you've analyzed where you are now, the process in itself will usually throw up some interesting suggestions, next you need to think about where you would like to be. The answer to this question forms the basis of your strategic business objectives, they can be wide ranging and don't necessarily just have to be turnover focused. In a large organization there will be corporate objectives that underpin the overall direction of the business, these then cascade down throughout the different departments who will each have their own set of objectives, ensuring a coordinated and synchronous approach to getting the business where it wants to be. In a small business you may just have a handful of goals but try to think outside the box here, as the saying goes, "turnover is vanity, profit is sanity, cash is reality". Don't chase turnover increases just for the sake of it, your underlying profitability is what really matters, and your objectives need to be realistic and achievable (more about that next).

When setting your objectives it is not enough to simply state: 'To increase sales' or some other vague statement, your objectives need to be SMART, another acronym, sorry, but a useful one nonetheless. Check that your objectives meet this criteria, they should be: Specific, Measurable, Achievable, Relevant and Time-related. An example of the above vague objective made SMART could be: 'To increase sales by 10% within the next 6 months'. These SMART objectives ensure you can measure the effectiveness of your strategy and tactics.

How do we get there?

You now know where you are now and where you want your business to be, but how are you going to get there? How will you achieve your objectives? This is where strategy and tactics come in, your strategy is the broad overall plan, whilst the tactics are the nuts and bolts of what you will actually do to achieve your objectives.

So there you have it, ask yourself: Where are we now? Where do we want to be? How do we get there? These questions are the fundamentals of strategic management. Finally, don't forget the feedforward loop too, this is the whole point of creating SMART objectives so you can measure if they have been achieved. Once you have carried out your plan you need to check how effective your chosen strategy and tactics have been by asking: Have we arrived? Have we achieved our objectives? If not why not? These answers then feedforward into your next cycle of planning and the process starts over again, rinse and repeat …

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Source by Colin Scotland