| Business Strategy | | | | to compete when they think they can win. |
| Did you know that business strategy is the art of | | | | Be Original |
| deception? The study and design of your business | | | | It is unlikely that any firm can gain the competitive |
| strategy will have far reaching effects on your | | | | advantage by trying to copy another. The reason is |
| business. Many business leaders overlook the | | | | that the competitor will always be one step ahead of |
| importance of understanding business strategy. As a | | | | you and a smart competitor will even mislead you |
| result, many businesses fail or operate at sub par | | | | purposefully. Any business that wants a real market |
| levels. There are many areas of business strategy to | | | | advantage will most likely need to develop their own |
| study, but the key components are (1) gaining a | | | | ideas, keep them secret, and follow through. |
| competitive advantage, (2) being an effective leader, | | | | Being an Effective Leader |
| and (3) winning with ease. These are all essential | | | | A great leader must be strict, reward bravery, and |
| principles found in the book by Sun Tzu, The Art of | | | | avoid personal character downfalls. |
| War. | | | | Strictness as a Leader |
| | | | Discipline must be swiftly carried out against the |
| Competitive advantage can be won through avoiding | | | | disobedient. There must be an effective system of |
| commodity business models, knowing when to | | | | rewards and punishments in place. The effective |
| compete, gaining higher ground first, and by being | | | | leader will be able to persuade others to the |
| original. | | | | importance of the mission and commit them to work |
| Avoiding the Commodity Business | | | | hard for the goal. Any leader that can't manage their |
| Jack Welch, former CEO of General Electric, once | | | | people must be removed. |
| said, "We are all just one stroke away from | | | | Leader Character Downfalls |
| commodity hell". The commodity is something that | | | | Some of the traits that can cause a leader harm are |
| any business should stay away from. A commodity is | | | | cowardice, recklessness, worry, hasty temper, and |
| a good that a business is powerless to change the | | | | honor sensitivities. According to Sun Tzu, these are |
| price. For example, farmers are price takers and can | | | | the five sins of a leader that lead you to get |
| only sell their goods for the price the world is willing | | | | captured, bring destruction, trouble, shame, and poor |
| to put on them. No matter how well the farmers | | | | decisions. |
| does in raising up goods, the price will be what the | | | | Rewarding Bravery |
| market gives. There are many service businesses | | | | A great leader should reward people that are brave. |
| that have very little ability to change raise prices. If | | | | People that step up and get things done that are |
| they do, they will not get any business. The bad | | | | risky or not popular should be rewarded for their |
| thing about a commodity business is that the only | | | | efforts. The act of rewarding bravery has a great |
| way to sell is on price and that makes the profits go | | | | deal with keeping a company in competitive |
| way down for everyone. The only way to get out | | | | advantage. When employees are willing to take risks |
| of the price war is to gain higher ground. | | | | and give it their all, the intellectual contributions will |
| To avoid commodity hell, the business must find an | | | | give the company great advantage. |
| advantage. Some of the ways to get out of | | | | Winning With Ease |
| commodity hell are through branding, developing | | | | One of the greatest things that Sun Tzu said was, |
| superior technology, and having top notch employees. | | | | "What the ancients called a clever fighter is one who |
| Some companies develop a superior system that is | | | | not only wins, but excels in winning with ease". The |
| efficient and that can manage a vast network well. | | | | greatest leaders know when to fight and when not |
| There is a lot that can be said about each of these | | | | to fight. They know how to compete in areas that |
| items. | | | | are not well defended. They know how to use their |
| Know When to Compete | | | | people to win. When leaders win with ease, they are |
| In trying to gain the higher ground, there are a some | | | | rarely given credit because it looks so easy. What |
| good things to know. You should only compete when | | | | many people don't realize is that the battle was won |
| you know that you can win. You should never | | | | before the fight began due to careful planning and |
| compete on a level playing field unless forced to do | | | | strategy. |
| so. And, you should never ever compete in a battle | | | | Final Thoughts |
| that you are at a disadvantage. | | | | Business strategy is complicated. The businesses that |
| Get Competitive Advantage First | | | | do the best often the best at deceiving their |
| In other words, take the higher ground before you | | | | opponents, balking their competitors plans, or, even |
| compete. In that way, you will have a good chance | | | | better, have the best employees and constantly |
| to win. In business, battles are won before the | | | | break new and higher ground before anyone else |
| competition ever begins. The best companies develop | | | | gets there. |
| technology or intellectual capital first and then choose | | | | |