Profitable Growth
Growing a company in a profitable way is not easy. It requires tough choices and implies that the right trade-offs are made. This requires the ability to say “Yes” to the right investment decisions and – what is often more difficult – saying “No” to other investment decisions.
“Investment decisions” includes all resource decisions done across the entire value chain. These are classical investment decisions into facilities, new production equipment, out of pocket marketing spending, new product development, but also the “time” spend by all employees. E.g. should we invest in a country manager to develop this market, invest KAM time to develop our business with certain customers or should we spend IT resources to build a new pricing system?
All opportunities are competing for the same resources and the choices made becomes your actual executed strategy.
Corporate Strategy need translation
“I often see that middle managers are left on their own to interpret the Corporate Strategy, which almost always leads to a non-focused organization”
[Henrik Ravn Christensen]
In other words, the Corporate Strategy need a translation. On the commercial side, this means that the Go-2-Market Strategy will need to be defined. The Go-2-market strategy should describe “where to play” and “how to win” in a concrete and practical way covering areas like (but nonexclusive to):
- Product Innovation Strategy
- Portfolio Strategy
- Distribution Strategy
- Service Model and Sales Strategy
- Pricing and Promotion Strategy
- Marketing Strategy
- Channel Strategy
- Market Investment Strategy
- Etc.
“It doesn’t help the organization a lot, if your communicated corporate strategy is: “We want to leverage digitalization” or “we want to expand our global presence” or “we want to focus on new strategic growth platforms”.
[Henrik Ravn Christensen]
Sounds familiar? These are aspirations, that provide some overall direction but limited guidance for most of the decisions taken every day, that determine the actual strategy and the results you are getting.
Getting the commercial strategy right
Commercial success starts with clear and well understood commercial strategies. The good news is, that there are tools and best practice processes for getting the right commercial strategies in place.