Business Strategy: "This Is a Football", Part 4

This article is the final piece on laying the ground work to develop a business strategy. The quote in the article title comes from Vince Lombardi who had to get his football team back to the fundamentals. He knew that a team that forgets the fundamentals cannot play well. This series of articles is a call for businesses to get back the to fundamentals. The first article discussed creating a mission statement and defining the values of the organization. The second article discussed performing the first half of a SWOT analysis, finding the strengths and weaknesses of the firm. The third article discussed performing the second half of the SWOT analysis, finding the opportunities and threats that exist in the market. This concluding article of this series ties all of these together to provide a basis for creating a strategy.

Robert Grant defines strategy as being "concerned with matching a firm's resources and capabilities to the opportunities that arise in the external environment."¹ One reading this quote can see knowledge of the firm's resources and capabilities come from the strengths and weaknesses part of the SWOT analysis and knowledge of the external environment comes from the opportunities and threats part of the SWOT analysis. In easier terms, a strategy is derived from determining what the company can do and then finding the right market niche in which to do it. However, the quote does not go far enough.

Suppose a printing company decides to print a regional magazine. The analysis has been done and there is demand for this new publication. The company has the capability of printing the number that is required and printing the magazine with the best quality print equipment available. The company starts printing the magazine and it looks like a success. Now suppose the work environment becomes bad. Maybe employees are not paid very much. Supervisors belittle the employees. There is a new editor every two to three months. It is not hard to see the quality of the magazine's content would soon deteriorate. Even though the firm has the capability of producing a demanded product in an excellent way, employee satisfaction can be a huge detriment to a business.

Now suppose there is a local sporting goods store that has the ability to make custom products for local schools and colleges. The store has the resources and capabilities and all the schools want these products. But the store treats its customers badly. There is no consistent return policy for products. When a customer has a complaint, a clerk argues with the customer. This store has opened itself up to losing its customers. The store has also opened up a huge opportunity in the market for another store to come into the market and treat customers better. Customer service can be a liability for a firm.

The quote by Grant does not go far enough because it does not take into account a firm's value of people, whether employees or customers. This is a core value that needs to be addressed in the mission statement. Firms can write mission statements, do SWOT analyses, and determine strategy and then implement all of it. However, if employees and customers are not satisfied, profitability of the firm is dampened. Some firms believe a strategy of quick and cheap compensates for bad work environments and bad customer service. However, when employees do not care, the work will generally not be quick and if customers are not treated fairly, it usually does not matter how cheap the product is.

This article has summarized the need for laying a proper foundation before setting a business strategy. In other words, business need to return to the fundamentals, just like football teams and other sports teams need to periodically return to their fundamentals. A business must define who it is with the mission statement so every decision and action can be made to maintain the businesses values. The firm must also do an honest SWOT analysis, determining what the firm is and is not capable of as well as determining factors in the business environment which may or may not be favorable. Then, and only then, should a strategy be determined.

¹Grant, Robert (2008). Contemporary Strategy Analysis (6th ed). Blackwell Publishing: Malden, MA.