Business Strategy and Marketing Solutions

Does Your Small Business Make These 5 Strategy Mistakes?

If your company values strategy then Joan Magretta’s post “Five Common Strategy Mistakes” will serve you well. Joan Magretta is a senior associate at the Harvard Business School.

Magretta’s focus is on traps that managers fall into, and she bases them on insights into the works (classic and current) of Michael Porter, a leading authority on company strategy.

Magretta’s idea of strategy can be especially helpful to companies, particularly small and mid-sized businesses, which do not use strategy to any significant degree. I favor her idea “to think of strategy in terms of the mix of benefits aimed at meeting customers' needs.”

THE 5 STRATEGY MISTAKES

Mistake #1. Confusing marketing with strategy.

Marketing is only one of several activities that, when pieced together uniquely, helps a company meet customer needs.

Mistake #2. Confusing competitive advantage with “what you’re good at.”

Magretta cautions that competitive advantage should be based on “something the company can do better than any of its rivals.” It is not necessarily what a company is good at, because companies may overestimate their strengths.

Mistake #3. Pursuing size above all else, because if you’re the biggest, you’ll be more profitable.

Often companies only have to be big enough. “Run the numbers,” she says. Don’t make the mistake that, because being the biggest sounds good, it is sound thinking.

Mistake #4. Thinking that “growth” or “reaching $1 billion in revenue” is a strategy.

Don’t allow the $1 billion figure to distract the small or mid-sized business from an important insight. The insight here is not to confuse strategy with actions or with goals.

Mistake #5. Focusing on high-growth markets, because that’s where the money is.

This is an “untested assumption” that ignores cost, competitive, and consumer factors all of which could “dampen profitability.”

If Internet strategy is a critical part of your strategy for success, click here to learn more.


Mission: To help small and mid-size businesses sell more.