How to Spot a Strategy

By Adrienne Burke | Small Business

How clear is your small business’s strategy? Do your employees know it? Can your customers see it? Management consultant Ed Eppley says strategy is crucial for growth, and developing a strategy starts with defining your focus.

Eppley, who coaches small business owners to think about strategy in the Course for President at Aileron, the professional management training campus near Dayton, Ohio, says, “Most of us never think about the strategy a company has, we just know whether it appeals to us or not. But when a company has a clear strategy and focus, it’s not hard for outsiders to identify.”

Consider the McDonald’s strategy. Eppley says, “Their goal is to sell fast food, but their strategy is clearly evident. It says, ‘We are going to be absolutely consistent. No matter which McDonald’s you go into, you’ll get exactly the same Big Mac, McNuggets, or fries every time, the pricing is going to be extremely competitive, and it’s going to be convenient: You can drive right up, 24-hour-a-day, to locations off any major interstate’.”

How about the Ruth’s Chris Steak House strategy? Eppley says you’re right if you think it’s something like, “Your steak is going to be exceptional in every case, and you’ll get a baked potato that’s as big as your forearm; it’s going to look great, it’s going to be huge, and you’re absolutely going to pay for it.” Unlike McDonald’s, you’re going to have to look them up to find out where the nearest location is. “The Ruth’s Chris customer is somebody who wants to be served, to be waited on, and to enjoy their meal more than they want convenience,” Eppley says.

What about the strategy of the women’s clothing store chain Chico’s? “We’re going to make the middle-aged woman feel young and stylish, and we’re not going to be distracted by other stuff,” Eppley says. “Chico’s clothes come in sizes O, 1, and 2 to appeal to women who’ve gone from a size 8 in their youth to a 12 in middle age. They’re not trying to compete with JC Penny or Target, and the footprint for their store, consequently, isn’t nearly as big.”

Ask any homeowner what the difference is between the strategies of Lowe’s and Home Depot. “They have similar offerings, but at Lowe’s you will easily find someone to help you. At Home Depot you’re going to be lucky to find somebody who knows how a product works,” Eppley says. “Home Depot’s strategy says, ‘We’re going to have what you want at the best price.’ Lowe’s says, ‘Come on in. We’ll help you with your home improvement project’.”

Eppley says he has watched as some companies changed their strategies over the years. “For a long time, the industry joked that Best Buy was really ‘Best Try.’ Consumers would go online to learn about big screen TVs and decide which one they wanted. They’d go to Best Buy to see if they liked it. Then they would go back online to buy it from someone else for the cheapest price. It was the place to go and see what you could buy so you feel comfortable with it,” Eppley says.

“Now, Best Buy’s sales people are much more friendly and trained to help you make a decision,” he says. “I don’t know how much better their results are today, but you can clearly see in local stores that they’re doing something different. Their strategy might be: ‘If they enter our store, we will do everything we can to help them make a wise choice while they’re here, because if they leave they’re going to buy it somewhere else’.”

What would your customers guess your strategy is? Is it the one you intended?

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