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