Get your business model right
Rod Drury has written a neat summary of business strategy for young companies- essentially ‘get your business model right for your market offer’:
- What is my sales model?
- What is my price?
- What is my support model?
- What does the organisation look like?
- Where do I need to be?
- Who is my target customer?
- What can I spend to get those customers?
- What customers/deals do we avoid?
- What brand do I need?
- Who would be best for the board?
Your market offer defines what you do and what you don’t do, why you do it, where you do it, when you do it, how you do it, who for, and who by. If you’re selling low cost products, a low cost sales channel is appropriate. If you’re selling a premium service, don’t under-price it to compete with lower value offers. Your whole strategy needs to be internally and externally consistent.
It’s not just new businesses that get this wrong. As a CEO and as a consultant who’s done a lot of turnaround work with under-performing mid-size and large companies, the big thing I find that always needs correcting is the business model. Either people forgot what made them great once (if they ever understood that), or their model lost its relevance for the market over time and they failed to adapt, or they ruined their business model by constantly reacting to competitors (usually by offering more and more for less and less).
I’m like a broken record on this: ‘ good strategy is making choices and meaning it‘. That goes for any business - big or small, old or new.
Trackback uri
May 30th, 2008 at 3:24 am
[…] understates the usefulness of Mr Why, who is probably at his most powerful when determining what your total market offer is (and what it is not) and how you fulfil it (and how not). Ask yourself why (and why not). […]