value

So what did he do???

Andrew Cook took advantage of harsh conditions to provide precisely what customer’s wanted – a fast service and even more affordable quality product! His improvements saved customers money, which naturally increased demand for his product.

When others saw what he had achieved, they changed too, but it was too late. They sought to catch up and triggered intense battles in a long-lasting… but that’s another issue.

What an outstanding story! But what is the worth of its telling? True, times are tough, I’m deeply conscious of this. But it seems to me that Andrew Cook provides us with insights into how to manage in such times: concentrate on the core business, customers and value-differentiating activities and above all a means of doing this efficiently!

Whatever else, we can be sure that Andrew Cook acted with tremendous tenacity and courage to save his company and give it primacy in his industry. His actions reflect capabilities not often mentioned in boardrooms or training rooms – the hidden hallmarks of persistence, determination and sincerity of action, which are often overlooked when eager imitators review pioneers’ strategic innovations and successes. 

Cook himself said: “Press on. Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts.”

But are the great qualities of persistence and determination alone omnipotent? I think not, even though they are the stuff of legend.

By for now

Andy

I just can’t get it out of my mind. This business of positioning I mean. The thing is that you have to choose between competing with a strategy of high value or one of least cost. One or the other.

Reckitt and Benckiser has a reputation for cleaning up, in the household goods market (– maker of Harpic and Dettol and Finnish dishwasher products).

A recent report showed that shoppers continue to choose Reckitt’s premium brands despite a worsening economy. The company believes that shoppers prefer the reliability of premium branded goods during hard times rather than cheaper private labels.

Holding the No 1 and No 2 positions in most of its product categories, Benckiser has become more focussed than some of its competitors. Unilever has hundreds of brands but Reckitt concentrates its efforts on 17 power brands that account for 85% of its growth.

And the figures speak for themselves. In the year to February 2009 it achieved a revenue increase of 22% to £6.5 billion, a 25% increase in operating profit and a market value of almost £19 billion – all this against a 26% fall in the FTSE!

This issue, as the good professor, Michael Porter, tells us is to choose one or other position – not the one that gets you caught in the middle.

Bye for now

I mentioned last time that any effort to craft strategy must be aimed at creating a UNIQUE STRATEGIC POSITION. I also mentioned that current practices are inadequate. What is required is a dynamic approach that replicates the success of strategic innovators.

Such an approach is to be found in this THREE-Fold framework of strategy formulation that concentrates on:

1. Customers and value; the issue here is to question how to achieve full value and service for customers – something that strategic innovators understand – the majority give the area lip service ONLY.
2. How we respond to customer demands for value with a proposition based on our market mission, distinctive capabilities, strategic assets and our ability to differentiate against the competition instead of unimaginative ‘me-too’ responses to every problem and opportunity.
3. Building an organisational environment that supports creativity and inventiveness, excellent relationships with customers, staff, collaborators the development and implementation of our strategy.

More next time

Best wishes

Andrew Pearson