Monday, September 11, 2006

Week 4 - Strategy vs Tactics

Business owners that proactively guide their business forward have embraced the concept of strategy versus tactics. The opposite of this is the businesses that react to everything that is going on around them. If you are not strategic, it means you do not have a big overriding game plan, you do not have a vision of where you want to be in 5, 10 or 20 years. Strategy is just careful and thoughtful planning – a on-goign question of yourself: where am I taking this business?

Let’s use a nightclub to illustrate the key distinction:

Typically nightclubs go through many peaks and troughs as the in-crowd moves from district to district, club to club. If you are the owner of a nightclub in any of these areas, there are two ways you can run your business. The first is tactically, which means you react to the moving crowd, you panic when sales drop, you run promotions because of the crowd behavior and try to keep your sales a reasonable level regardless of where the crowd is.

The second way to run the business is strategically. You sit down for as long as it takes and think about your business from the ground up. Who does your nightclub currently cater to? Who are your patrons and what are they looking for today? What about in 12 months, in 24 months? Does your d├ęcor, music and location appeal the people you are trying to attract and how much money do these people typically spend when they come into your club?

Once you have thought about the answers to these types of questions, you are in a position to plan how you will operate in the future, what type of clientele you will be seeking, how you will reach them effectively and most importantly, what you offer that is unique, special or different that will help you to attract these people.

Call your strategy a game plan, a business or marketing plan, it really doesn’t matter. What matters is that you run your business this way going forward. Tactical maneuvers are a drain on your time and efforts so stop working this way.

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