What Does Strategy Mean to A Small Business？

In the textile print advertising industry, there are always many misunderstandings about strategy. Someone thinks the strategy is the thing that only big companies should consider. Actually, in my opinion, big companies will pay more attention to their operational efficiency rather than strategy, as a strategy--the only way for new entrants to survive--is no longer a difficult question for those big companies. New entrants cannot compete with big enterprises in business operations, talents, financial capability, and technology. Simply speaking, new entrants fail at the starting point when they want to compete with big companies through evaluations, financial management and control, and standard operating procedures.

A few days ago, one of my friends, who runs a foreign trade company, asked me, “We work harder this year than last year, but our sales performance even cannot keep up with that of last year, why?” The reason is simple. While you work hard, the industry giants also work hard. What’s more, the industry leaders are more diligent and work more efficiently than you, so your relative position in the industry won’t change. 

Some other people in this industry think that they have better executive force, better corporation culture and they are more hardworking. That is to say, executive force is everything to them, which, however, is a totally wrong opinion. When a market is stable and static, the executive force is the most important thing. Let’s make it simple through an example, our driving skills are important when we drive in a good traffic condition, while in a complex and bad traffic condition, whether we can arrive at our destination depends on our sense of direction rather than our driving skills. Now, the industry market is rather complicated, as we mentioned in our previous article that the product homogeneity is severe and the channels are almost saturated. If you want to compete with the industry leaders, you must differentiate your business from theirs in top-level design positioning and business model innovation, and in this situation, the industry will become a harmonious cycle in which every competitor will be on their own racing tracks.

All in all, the new entrants who want to catch up with the leaders in the industry should be innovative in top-level design and core strategy, otherwise, execution will only amplify the mistakes as time goes on, and plagiarizing in products will never become the differentiated core competitiveness.

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