Avoiding Competition

A good strategy, therefore, should include finding ways to avoid competition.

Competition, by its very nature, means that there will be winners and losers--and in the competition for customers, those that fail to gain a competitive advantage in the market will ultimately fail altogether. A good strategy, therefore, should include finding ways to avoid competition.

Competition can be a destructive force for your organization. Consider two coffee shops that are situated next to one another, and that offer a similar standard of coffee and service. Both of the shops are suffering poor sales. To try to boost its performance one of the shops decides to offer a 10-percent discount on all orders. This is successful, and attracts more customs to the shop. In response, the second coffee shop introduces a 15-percent discount, in turn winning more of the local business, and putting pressure on the first shop to offer an even larger discount. This pattern of behavior is likely to ultimately lead to the destruction of both shops.

All markets go through this destructive competitive process, which leads--in time--to the failure of many competitors and the dominance of a very small number of the most competitive players.

ACTION POINT: Understand the destructive competitive process of price discounting.

Possible Characteristics of Good Customers

They provide valuable insight into areas that you are not familiar with

A good strategy aims to identify and target customers with characteristics that are beneficial for your organization. Here are four possible characteristics to consider.

• Financially beneficial. They provide you with regular profitable income: they are willing to pay a higher-than-average price' they give you a large volume of work so it improves your turnover figures; they pay promptly and it improves your cash flow.
• Reputation enhancing. Their custom enhances your reputation in the market. For example, if you write software for the financial services industry and a major Wall Street firm buys your software, other customers will assume that you must be good.
• Structure enhancing. They enable you to invest in new resources: for example, if a potential but not well-paying customer would provide work to fill 60 percent of an expensive new machines capacity, that customer's work would allow you to invest in a key new resource.
• Knowledge enhancing. They provide valuable insight into areas that you are not familiar with, such as a new market sector or a new country that would be strategically important for your organization.

ACTION POINT: Consider the benefits of a customer and how they may enhance your reputation, structure or market knowledge.

Attracting the Right Customers

Take time to think about the characteristics that would most benefit your organization.

In the early stages of a business, it is natural to say "yes" to all potential customers. You may be under financial pressures to earn income, and want to seek reassurances that you are doing a good job and that people want to work with you. However, some customers have characteristics that give them the potential to be much more beneficial to your organization that others.

Take time to think about the characteristics that would most benefit your organization. If you can identify customers with those characteristics and find ways to attract them, you will gain the double benefit of having the customers that you want and sending the least beneficial customers to your competitors, so that they waste their time, not yours.

Once you have determined the types of customers you want and don't want, target your marketing to your preferred groups. For example, if you have decided that large customers are more beneficial to your organization than small ones, don't place your advertisements in local community magazines--advertise in national media. Strategic marketing of your products to attract the right customers also extends to pricing: if you price your products very low, you may attract only the most cost-conscious customers, who are likely to argue over price.

ACTION POINT: Determine the types of customers that bring the most benefit to your organization.

Choosing Your Customers

A good strategy aims to identify and target customers with characteristics that are most beneficial to your organization.

If you take the time to review and analyze your customers, you will find that they are not equally valuable: some will produce strong, continuous, reliable forms of income, while others give you small pieces of complex work, argue over what you have done, and then are slow to pay you.

A good strategy aims to identify and target customers with characteristics that are most beneficial to your organization.

ACTION POINT: Regularly look through your customer list and ask yourself: what is the compelling reason for having this customer?

Gift of Wisdom: The Divine Perspective

Christ... the... wonderful wisdom of God.

1 Corinthians 1:24

The Gift of Wisdom provides us God's view of things, a kind of divine perspective on reality that penetrates through evens and perceives the divine presence and action at work, even in very tragic and painful situations. To see God in suffering is indeed a high level of the Gift of Wisdom. Some things are to be learned in this perspective that cannot be learned in any other way. The Gift of Wisdom is the source of the Beatitude of the Peacemakers, those who have established peace within themselves and who have ordered their own great variety of faculties into a unity that submits to God's direction and inspiration. They are also able to establish peace around them -- whether it be in their families, communities, or the workplace.

Blessed are the peacemakers, for they will be called children of God. Matthew 5:9

Light of Christmas

Glory to God in the highest... Luke 2:14

Readiness for any eventuality is the attitude of one who has entered into the freedom of the Gospel. Commitment to the new world that Christ is creating... requires flexibility and detachment: the readiness to go anywhere or nowhere, to live or to die, to rest or to work, to be sick or to be well, to take up one service and to put down another. Everything is important when one is opening to Christ-consciousness. This awareness transforms our worldly concepts of security into the security of accepting, for love of God, an unknown future... The light of Christmas is an explosion of insight changing our whole idea of God. Our childish ways of thinking of God are left behind. As we turn our enchanted gaze toward the Babe in the crib, our inmost being opens to the new consciousness that the Babe has brought into the world.

Today in the town of David a Savior has been born to you: he is Christ the Lord. Luke 2:11

Joy of Christmas

Shout with joy to God, all the earth! Psalm 66:1

The joy of Christmas is the intuition that all limitations to growth into higher states of consciousness have been overcome. The divine light cuts across all darkness, prejudice, preconceived ideas, prepackaged values, false expectations, phoniness and hypocrisy. It presents us with the truth. To act out of the truth is to make Christ grown not only in ourselves, but in others. Thus, the humdrum duties and events of daily life become sacramental, shot through with eternal implications. This is what we celebrate in the liturgy. The kairos, "the appointed time," is now. According to Paul, "Now is the time of salvation," that is, now is the time when the whole of divine mercy is available. Now is the time to risk further growth.

I tell you, now is the time of God's favor, now is the day of salvation.

2 Corinthians 6:2

Planning for Growth

A "stretch" approach, if successful, puts you in a stronger position,

In many circumstances yo may want to go further than simply "fitting" within your market, and attempt to make yourself more dominant. A "stretch" strategy is an extension of "fit," and involves making decisions and taking actions that enable you to grow, and in doing so push your competitors back or even crush them.

A "stretch" approach, if successful, puts you in a stronger position, and may perhaps mean that your organization lives longer. However, you must also weigh up that employing a "stretch" strategy means that the scale of decisions and actions you have to take will be greater, so it is likely to consume more time and resources and involve a higher level of risk than a "fit" strategy.

ACTION POINT: Identify the "stretch" decisions and actions that enable your business to grow.

The Ansoff Matrix

The matrix lists four possible options, ordered by how much risk is involved, from least to most risky.

The Ansoff Matrix is a tool that can help define the options open to a business when deciding on a strategy for selling their products. The matrix lists four possible options, ordered by how much risk is involved, from least to most risky.

• To sell existing products or services into existing markets.
• To sell new products or services to existing markets (i.e., to sell new products to the same customers)
• To sell existing products or services to new markets.
• To sell new products or services to new markets.

When choosing which of these strategies to use to sell your products, consider your existing resources and competencies, taking into account how easy it would be for you to develop or acquire any that you currently lack, and the level of risk involved in undertaking each option.

ACTION POINT: Identify the products, services and markets to focus your strategy on.

Fitting or Stretching

whatever your business, you can never afford to stand still

Your strategy is defined by the macroeconomic and market forces that continually act upon your organization. Doing nothing to respond to these forces is not an option, because without action their impact will ultimately destroy you. You have a choice: to "fit" within these forces, or to employ a "stretch" strategy that could lead to growth in the future.

Picture your organization surrounded by its competitors and forces in the market, and by the macroeconomic forces that impact on all organizations. These forces push at your organization form all sides and can, in time, crush it. If your organizations responds by making decisions and taking actions--such as selling new products or moving into new markets--it will push back against these crushing forces. It will become stronger and if its forces are equal to the forces pushing it, then it will maintain itself and we can say that it has achieved "fit." This means that effectively standing still requires active management; and achieving "fit" cannot happen by doing nothing. The concept of "fit" reflects the fact that all organizations operate in a dynamic, environment. If you decide to begin work at 9 am, for example, there is not reason why your competitors cannot decide to start at 8 am.

Even if you decide that you want your team or organization to remain roughly the same, at the very least your costs will grow every year, which means you need to earn more to cover them; and in addition your competitors and your markets are likely to change. So, whatever your business, you can never afford to stand still: a strategy for achieving "fit" is the minimum requirement.

ACTION POINT: Don't stand still.

Gift of Understanding: View Our Own Weakness

Let your mercy shine upon evil...

Saint Teresa of Avila

The Gift of Understanding...gives us a penetrating insight into the truth s of faith and at the same time a realistic view of our own weakness.. It communicates the experience of our nothingness and our incapacity to do anything good by ourselves... The Gift of Understanding, whether it comes through terrible suffering or develops gradually through a life of prayer, makes us aware that we are capable of any evil and that only God is our strength. Only God can protect us from the evil we might do if we were placed in circumstances of enormous tragedy and suffering. In this sharp light there can be no elation or pride in one's own gifts. There is no appropriation one's own talents... All of this is burned away... as we realize ever more profoundly that we owe infinitely more to God and to others than we can ever give back. Humility is the right relationship to God. It is the same total dependence on God and invincible hope in God's infinite mercy.

Blessed are the pure in heart: for they will see God. Matthew 5:8

Striking a Balance

In reality, a strategy that seeks to achieve a balance of the inside-out and outside-in approaches may be the most successful.

The reverse approach is known as "outside-in," or a "market-based view" of strategy. This involves identifying what the customers and the market are going to need or want in the future, and then developing your resources and competencies to satisfy those market needs.

This approach has the advantage of ensuring that your products or services are desired in this market and will be bought. However, it may be hard to succeed with this strategy if what the market wants is not what you are good at, and if it is not easy or is prohibitively expensive to acquire the relevant resources and competencies.

In reality, a strategy that seeks to achieve a balance of the inside-out and outside-in approaches may be the most successful. There is no set formula for creating this balance--what matters is that it is right for your business. consider, for example, an organization that owns a medium-sized hotel in its own grounds with a group of experienced staff. Its strategy might be to look at these resources and select the most lucrative market using them (hotels specializing in romantic breaks, for example). Once the hotel has identified this market, it might then modify its resources and competencies to optimize its success in serving it.

ACTION POINT: Balance the strength of your resources and the needs of the market to develop and implement your strategy.

Choosing your Approach

The "inside-out" approach to strategy involves looking at what you have that is of value to your organizations and to the market...

When developing a strategy for the future of your business, you will be presented with a dilemma: should you focus on what you are good at, or on what other people want form you? When making your decision, remember that these two approaches are not mutually exclusive, and good strategies often involve a combination of the two.

The "inside-out" approach to strategy involves looking at what you have that is of value to your organizations and to the market--a shop in a busy location, for example. Known as "resources," these are the assets of your organization. However, resources alone are useless. It is how you use them--your competencies (the ways n which you turn your resources into activities that are valuable to your organization)--that will ultimately lead to your success or failure. For example, consider a fast-food business that has a busy city-center location. Such a business will not make money unless it combines its shop resource with staff who know how to deliver great food very quickly.

The inside-out approach is also known as the "resource-based view" of strategy, and is based on looking at your resources and competencies--what you are good at--and identifying markets that need them. clearly playing to your strengths in this way makes a great deal of sense, but this strategy suffers one critical flaw; if no-one wants to buy what you are good at, then you have no viable business. This lack of market input into your activities means that an inside-out approach alone may not always be successful.

ACTION POINT: Ask yourself what resources do we have? location? Skilled staff? Price? Technology? Processes? Do they give us competitive advantage

Questions to Consider for Porter's 5 Forces

Is there room for all companies?

The following questions can help you think through and understand Porter's 5 Forces.

Potential Entrants:

• Does the market require you to have particular knowledge to be successful? If yes it hinders others from entering.
• How easy is it to set up in business in the market? Does it take a few hundred dollars or a few million dollars?
• Is branding important in the market? If yes, then brand building may be a problem for new entrants.

Potential Substitutes:

• How easy is it for customers to switch to another type of product or service (to change from using a private car to a public train service, for example)?

Power of Suppliers:

• Where is the balance of power between suppliers and the firms in the market? To much supplier power makes the market unattractive.
• How easy is it to switch suppliers that offer an equivalent or superior product or service? (The easier, the better.)

Power of Buyers:

• Where is the balance of power between buyers and the firms in the market? Too much buyer power makes the market unattractive.
• How many rivals do you have to supply your product or service? How easy would it be for your customer to drop you and use another?

Competitive rivalry:

• Is there room for all companies? If there is, particularly if the market is growing, then this increases the attractiveness.
• Is the market contracting? If so, rivalry may be intense.

ACTION POINT: Asses your market opportunity by considering the questions above and the 5 forces.

Using Porter's 5 Forces

Consider each of the five forces in turn.

The model looks at five forces that define the market: how easy it is for new businesses to enter; how easy it is for customers to substitute your product or service for another; how much power suppliers and buyers in the market have; and the overall degree of competitive rivalry within the market.

Consider each of the five forces in turn. Start by assessing how difficult it is for you to enter the market. One aspect of competition is that if you are seen to be successful in a market, then others will quickly follow. It is more attractive, therefore, for a market to be easy for you to enter, but to have high barriers to entry for others. Next consider the second force: how easy it is for your customers to substitute your product or service with another.

The power of buyers and suppliers are two sides of the same coin If all the companies within the market need to buy a certain raw material, and there is only one supplier, this supplier has power over supply and pricing. Similarly, if one retailer controls the distribution and sale of a product, then that retailer (the buyer) has control. A market in which you have less control and power is not as attractive to enter as one in which you are not constrained in this way.

The first four factors combine to make an overall competitive rivalry, so the final step of the analysis is to consider how strong this is for your particular market. The output of the p5F analysis can be used in SWOT analysis, to link this information about the strengths and weaknesses of your organization.

ACTION POINT: Assess the competitive rivalry of your market by considering the potential entrants, substitutes and the power of buyers and suppliers.

Assessing the Market

At its heart is the concept of industry rivalry, or the degree of intensity of competition.

Analyzing the specific market in which your organization is key to making good strategic decisions. The Porter's 5 Forces (P5F) analysis tool can help you understand how competitive forces work within your chosen market, to analyze the behavior of your competitors and their impact on one another, an ultimately to achieve competitive advantage.

The Porter's % Forces model was developed by American researcher and writer on strategy, Professor Michael Porter. At its heart is the concept of industry rivalry, or the degree of intensity of competition.

Understanding this helps to define how attractive a market is to your organization: intense rivalry suggests too much competition and less opportunity for you to survive and be profitable.

ACTION POINT: A P5F analysis describes a competitive situation, which can change frequently, so ensure that your analysis is regularly updated to take into account the latest market conditions.

Gift of Understanding: Truths of Faith

Jesus, thank You for Your light.

The Gift of Understanding reveals what is hidden in the major truths of Christian doctrine. The Gift of Understanding perfects, deepens, and illumines faith as to the meaning of revealed truth, adding new depths to the mystery to which we consent. For instance, it could be some aspect of the Holy Trinity or the greatness of God. It could be the presence of Jesus Christ in the Eucharist. It could be the infinite mercy of God in the Sacrament of Reconciliation. In other words, it is not merely the affirmation of something we believe and assent to. A characteristic of the Gift of Understanding is that it provides a kind of living experience of the mystery. One or two of those experiences can last a lifetime and make such a deep impression as to reorient one's whole spiritual life once and for all.

1 Corinthians 2:10, 12

These things God has revealed to us through the Spirit; for the Spirit searches everything, even the depths of God...We have received...the Spirit that is from God, so that we may understand the gifts bestowed on us by God.

Fun with Words

A friend sent me an email this week that recapped the winners of the annual Mensa Invitational.

It is a contest that asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter and supply a new definition. Here are the winners:

1. Cashstration (n): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.

2. Ignoranus: A person who's both stupid and an asshole.

3. Intaxication: Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.

4. Reintarnation: Coming back to life as a hillbilly.

5. Bozone (n): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.

6. Foreploy: Any misrepresentation about yourself for the purpose of getting laid.

7. Giraffiti: Vandalism spray-painted very, very high.

8. Sarchasm: The gulf between the author of sarcastic wit and the person who doesn't get it.

9. Inoculatte: To take coffee intravenously when you are running late.

10. Osteopornosis: A degenerate disease. (This one got extra credit)

11. Karmageddon: It's like, when everybody is sending off all these really bad vibes, right? and then, like, the Earth explodes and it's like, a serious bummer.

12. Decafalon (n): The gruelling event of getting through the day consuming only things that are good for you.

13. Glibido: All talk and no action.

14. Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.

15. Arachnoleptic Fit (n): The frantic dance performed just after you've accidentally walked through a spider web.

16. Beelzebug (n): Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out.

17. Caterpallor (n): The color you turn after finding half a worm in the fruit you're eating.


So try to have some fun with words. Leave a comment with any good ones you come up with. Happy Saturday!

Using PESTLE Analysis

There is a process and six factors that are part of the PESTLE analysis. The factors are:

• Political: The impact of decisions made by government(s), from new laws and policies to political goals and ideologies, such as increasing gender equality.
• Economic: Issues related to the distribution, supply, and availability of money, such as the performance f national economies and changes in currency exchange rates.
• Social: The impact of social factors, such as collective social belief of what is right or wrong, and changes in taste, fashion, attitudes and work ethics.
• Technological: The emergence of availability of new and enabling technologies--automation, for example--meaning new things are possible and old processes are obsolete.
• Legal: The impact of existing lass, proposed changes to laws, or the introduction or removal of laws These can be general laws or those specific to business.
• Environmental: The impact of consumer attitudes toward and legislation relating to environmental issues, such as pollution and climate change.

The process begins by gathering the team and brainstorming each factor in turn. Then anything that could affect your organization in the future is listed. From there the team narrows the list to the main factors that need to be considered when developing new strategy.

ACTION POINT: Consider a PESTLE analysis when developing a new strategy.

Looking at Major Forces

Given the scale of these forces, it is vital to identify and understand them so that you can use that knowledge to create good strategy.

The macroeconomic forces that affect your organization, and your competitors, your markets, and even whole countries and the global economy can have significant implications and are beyond your control. Given the scale of these forces, it is vital to identify and understand them so that you can use that knowledge to create good strategy.

PESTLE analysis was developed to help identify and understand macroeconomic forces that may impact on an organization, such as global and national economic factors (for example, growth or recession), changes in technology, and emerging social trends, such as attitudes to climate change.

PESTLE analysis divides these forces into six factors: political, economic, social, technological, legal and environmental. It is also used in the abbreviated form PEST (or STEP).

A PESTLE analysis should be an early step in creating new strategy, because it sets out the background in with an organization has to operate and make decisions. It can be performed by an individual, but is often best undertaken by a team so that ideas can be shared and discussed.

PESTLE can be set out on flip charts or a whiteboard, especially when being done by a team, but there is also software available to do the analysis. You should be able to identify most PESTLE factors quickly, but you may need to spend time researching specific issues in more detail. This research is important, because strategic decisions must be based on the best data available at the time.

The output of your PESTLE analysis can be used in conjunction with SWOT analysis to explore further how the macroeconomic factors you have identified may impact on your organization.

ACTION POINT: Understand the political, economic, social, technological, legal and environmental factors that impact your business.

Performing a SWOT Analysis

SWOT analysis is a tool that can be used to generate an overview of an organization's position within a particular market, or a team's position within an organization. Use the SWOT matrix to determine and compare the internal strengths and weaknesses of your organization or team, and to analyze the opportunities for it and threats to it within the market.

The information you collect will enable you to make decisions that could help to put your organization into a stronger position by making the most of your strengths, minimizing your weaknesses, exploiting the opportunities open to you in the market, and mitigating any threats.

ACTION POINT: If you've taken the time to analyze your situation using analysis tools, don't let the data you've collected just sit in a a file--be sure to use the information to inform your strategy.

Tracking Your Market

To to this, you must spend time "in the market"

To understand the environment in which you do business, you must dedicate time to consciously seeking out the information you require. For example, to be a successful car dealer, you must buy the right cars at the right prices.

To to this, you must spend time "in the market" --watching and listening for information abut which cars are selling well or proving difficult to sell, and which cars are increasing in price or are decreasing in value. This requires casual observations, but also real data, such as week-to-week recording and analysis of car-price data, customer numbers, and stock levels. This combined approach allows you to create the right strategy for your business.

ACTION POINT: Observe your market by being "in it" and using real data about products and customers.

Analyzing Your Environment

Analyzing the environment in which you operate is the first step to creating a strategy.

To be effective, an organization needs to achieve some degree of match between what it can offer and what the world needs. Making sense of the complex environment in which you do business, and using this information to create good strategy, is essential if your business is to survive.

Analyzing the environment in which you operate is the first step to creating a strategy. There are a number of analysis tools that can help you assess your chosen market and also the world in which you do business:

• SWOT analysis: This can help you understand your organization and its market or environment, by contrasting its "Strengths" and "Weaknesses" with the "Opportunities" and "Threats" in the market.
• PESTLE analysis: This assesses macroeconomic forces that affect all markets, including political and economic factors, social trends, and legislation.
• Porter's 5 Forces (P5F) This looks at factors that are operating within a given market, and that are of significance to all organizations within that market, but not necessarily other markets.

There may be some overlap in the information these tools generate, but it is still best to use all three, as each can generate unique information and insight.

ACTION POINT: Consider the tools above for analyzing your environment.

The Gift of Knowledge and Mourning

Blessed are they who mourn... Matthew 5:4

The Gift of Knowledge corresponds to the beatitude of those who mourn. The reason we mourn is that something inside us realizes that our programs for happiness, put together in early childhood, are not going to work anymore. This is one of the intuitive fruits of the Gift of Knowledge. It is the realization of the damage that our emotional programs have done to us throughout our lives up until now. Part of the mourning caused by the Gift of Knowledge is the beautiful grace called "tears of contrition."

Such contrition is also known as compunction. Compunction is the humble acknowledgement of our failures without any guilt feelings attached to them. If there are guild feelings attached to them, then they are coming from our own neuroses. When there is a feeling of loving sorrow for having damaged ourselves and others, these tears are cleansing. Hence the promise contained in the beatitude: "Blessed are those who mourn, for they shall be comforted."

Matthew 5:4 Blessed are they who mourn, for they will be comforted.

Knowing who is Responsible

So whose job is it to watch out for hazards and opportunities and assess the potential effects of new competition and changes in the wider economy? Usually, strategy is seen as the preserve of a business's leaders, and while it's true that good strategists often achieve senior management positions, monitoring organizational strategy can, and should, involve people throughout the organization. Your salespeople, for example, may be best placed to gain information about the market (the best source of competitor knowledge is often your own customers). Similarly, your purchasing staff may have advance warning of price increases in key raw materials. Find ways to collect such knowledge and use it to inform your strategy.

Ask the following questions to help focus on the future:

• Do i know what our customers (internal or external) are doing and what their future plans are?
• Do I know what our competitors are doing?
• Have I assessed whether there are any constraints that could affect our business in the next few years?
• Have I analyzed whether there are opportunities for my team?
• Do I know who is responsible for gathering information?

ACTION POINT: Encourage and incentivize everyone in your team to be aware of what is going on in your organizational environment and find ways to collate any information they discover.

Linking Strategy to the Market

A good manager always finds time to reflect upon where the business is going

Strategy has two dimensions: what is happening inside your organization and what is happening outside, in the market. You must understand and analyze both if you are to devise a successful strategy.

Most people in an organization are constantly busy working to the next deadline. However, being driven by short-term goals should not preclude thinking about the future. A good manager always finds time to reflect upon where the business is going and whether its strategy remains valid.

Business is time precious. If you don't dispatch the order by Thursday, you'll lose the contract; if you don't complete your invoicing by the end of the quarter, you'll answer to your boss. A series of deadlines can stretch out far into the future, and it's all to easy to get mired in day-to-day delivery.

But looking beyond the "now" will help you avoid future troubles that may affect your business and will enable you to spot opportunities to achieve more sales, develop new services, and pre-empt your competitors' activities to gain first-mover advantage. The attentive organization or team will soon gain advantage over the competition. For example, say you are a car manufacturer and you know that it takes five years to develop a new car design. if you receive early signals that taxation on large-engined cars will increase in five years, you can begin to develop smaller engines for your cars well before your competitors. your product will emerge earlier than theirs and gain a strong foothold in a new market.

ACTION POINT: Understand and analyze what is happening inside and outside of your organization.

Shaping your Strategy

the concept of sustainable competitive advantage is usually at the heart of company strategy.

Strategic management is necessary to achieve success in all types of organizations. However, the way strategy is understood and applied differs depending on the sector in which your organization operates, whether it is private, public, or voluntary.

The private sector is defined by competition. Companies continue to exist only if they provide products or services that are better than those of their competitors, so the concept of sustainable competitive advantage is usually at the heart of company strategy. Another key dimension or private sector strategy is time Lead times (the time it takes for a process to be completed, from the start of that process to its completion.) for developing new products and getting them to market are often short, and tension can exist between delivering short-term profits and planning and resourcing long-term strategy.

The public sector delivers public policy and undertakes functions such as collecting taxes. It is largely immune to the forces of competition, although competition does exist internally, such as between departments seeking funding form a limited government pot. If public sector organizations spend less than they receive, the difference is known as "surplus", not "profit". Strategy in the public sector is usually centered on delivering goals to satisfy the political process and producing conspicuous efficiency and value for money to reassure taxpayers. Political pressures commonly lead to changes in priorities to gain voter support, and to a short-term view that impacts upon longer-term strategic planning.

Voluntary organizations can be considered to fall between the public and private sectors. While their objectives may be social or political, they are subject to the same competitive forces as the private sector. The must compete for funding from public or private organizations, and from individuals. Unlike the private sector, however, it is not always clear who the customers of a voluntary organization are--is it the recipients of funding, the donors, the trustees, or the volunteers who help make it run? Consequently, strategic management of voluntary sector organizations is heavily based upon satisfying all of these different groups, through careful stakeholder (anyone who has an interest in your organization and how it is run) management. Voluntary sector organizations must be careful not to spend more than they receive in donations. Like public sector organizations, if a voluntary organization spends less than it receives, the difference is is know as "surplus" rather than "profit", for social, political, and presentational reasons.

ACTION POINT: Provide products and services that are better than those of your competitors.

Sources of Control

It places you ahead of your competitors--internal or external.

There are a number of sources of control you need to achieve to give you greater power within the environment in which you operate. Developing one or more of these will give you a greater ability to direct your particular market.

• Control of Knowledge. Access to information and knowledge provides you with understanding and an enhanced ability to prepare. It places you ahead of your competitors--internal or external.
• Expert Power. At times we all need someone who can find solutions to our problems. Expertise is a source of power, especially when it is in short supply.
• Control of Resources. If you control who can use resource, such as staff, money, and offices, then you have power over other managers.
• Control of Distribution. If you are a good retailer and make your outlets popular with customers, suppliers want to talk to you. By controlling access to customers, you can control the manufacturers.
• Personal Power. This derives from your personal influence--your ability to make people voluntarily do what you want. Influential people spend their time talking with others.

ACTION POINT: Understand and strengthen your sources of control.

•