Tag Archives: business segments

Strategic Planning: Are Your Decisions Based on Facts or Opinions?

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President and CEO, Spex, Inc

 By Denise Harrison, Strategic Planning and Execution

Many people return from a strategic planning retreat frustrated, often asking: Were we really concentrating on what is important or were we focusing on what was “top of mind”? Did we make the right decisions or were we swayed by the most persuasive person?

A Better Way to Make Decisions: Thoughtful Consideration Based on Research

One way to prevent making decisions based on opinions and “top of mind” thinking would be to split your strategic planning process into three steps:

  1. Situation Analysis and Research Identification
  2. Strategic Formulation (based on the above research)
  3. Implementation – Turning Strategy into Action

Critically, Step 1 starts your strategic planning process off on solid footing, focusing on the current situation and identifying the important areas of research. These should include:

  • Current business segments: Are we positioned to meet their future needs? How are we differentiated?
  • Competition: What are they up to? How are they positioned in the market?
  • Other considerations that can change the competitive landscape: technology, suppliers, economy and regulations?
  • Opportunities: What are they? What is each one’s potential? What is the downside risk?

Taking time to research these topics and any others that your team deems worthy of research before the strategy formulation session allows for better decisions in which all team members are equipped to participate . It will enable your team to develop a strategy that will really differentiate you from the competition and set you on the path for future success.

What else?

Another important component of the research phase is to have the research collected in a consistent format. Having a template for the business segment, competitor and opportunity research is particularly important. This consistent format allows you to compare each topic given the same information rather than miscellaneous bits and pieces pulled together to present the researcher’s thoughts in a favorable light. This consistency allows for rigorous discussion of where to spend your company’s resources in order to achieve the best possible benefit.

If you would like to know how to make your strategic planning sessions more fact-based please contact me at harrison@thestratplan.com.

(c) Spex, Inc. Wilmington, NC, 2015.  Reprint permission granted with attribution.

Game Playing Will Be Important to Sony’s Future Success

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10056562891131CDPBy Denise Harrison, President & CEO, Spex, Inc.

Sony exemplifies how a company must continually refocus its resources in order to optimize its future potential. An earlier article: Know When to Hold ‘em and When to Fold ‘em – Knowing when to get out of a core business is key to being successful in the future discussed how Sony was exiting and de-emphasizing some of its core business to focus on areas with higher potential. As the strategy is evolving, we see that Sony is continuing to re-focus its resources to regain growth and profitability by broadening its gaming division to focus on entertainment. It will be adding complementary services and changing its focus on Sony-only hardware to becoming hardware indifferent.

How to expand the successful Game Business Unit?

  1. What is a complementary service to the gaming division? If one thinks broadly about home entertainment, one not only thinks of games, but also TV, in particular, internet TV. Sony has already successfully partnered with Viacom to distribute 20 Viacom channels, including Nickelodeon and MTV over the internet for TV viewing. Presumably using a “gaming” channel, Sony would stream games over the TV.
  2. In addition to streaming TV, Sony intends to stream its games to smart phones and tablets. By taking this step, Sony is emulating IBM when it moved from being a computer hardware provider to an information systems provider. When IBM made its move, it had to become indifferent to the hardware that their customers were using. This was a difficult step for IBM to take. It will be a difficult step for Sony, also. Its PlayStation 4 is the industry leader and may become the standard game console similar to the way VHS beat out Betamax technology. By learning from the Betamax experience, the PlayStation 4 has made it easy for companies to design games for this console. Still, to take the next step, Sony must become indifferent to the hardware if it wants to dominate the game streaming business.

It is difficult for a company to re-invent itself. Sony has already taken many steps to re-focus its resources, but many more will be needed for a successful turn-around story.

Is your company struggling to develop a clear focus on what will enhance its future potential? Are you bogged down trying to revive legacy businesses that have slim margins when the market is valuing more recent products and service offerings?   There are several strategies that are effective in addressing legacy businesses:

  1. Maintain: Continue to maintain your market share while investing in new areas of the business. This strategy is used when the legacy business is still healthy.
  2. Contract: Get out of the products/services/customers that are no longer profitable, but continue in the areas that have a good return. This will shrink your core, but keep the areas that are profitable while you build in the new, more attractive business segments.
  3. Milk/Harvest: Gently coax resources out of the business; no new investment and use the cash generated to invest in the new areas.
  4. Withdraw: Get out of the legacy business altogether, and truly focus your resources on the new areas. A good example of this strategy was recently executed by GE when it sold its Major Appliance division to Electrolux. (See article: GE Spins off Major Appliance Division – What Can a Small Company Learn from this Divestiture?)

What is right for your company?

A thorough strategic review of your business using a structured process will enable your senior management team to select the right strategy to optimize your company’s future potential.

If you would like to learn more about how a structured process would work for your firm please contact me: Denise Harrison; 910-763-5194 or harrison@thestratplan.com.

Copyright: Spex, Inc. 2014