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The Definitive Business Plan, 3rd Edition by Sir Richard Stutely

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STRATEGIES FOR DEPARTMENT MANAGERS 119
Strategies for department managers
For the sake of argument, call the strategies outlined above business strategies. Once you
have decided on a business strategy, the next logical step is to expand it by developing
a series of departmental strategies one for each functional area research and develop-
ment, production, marketing, and so on. This gives the next level of detail. For example, if
your business strategy is to increase market share, your marketing strategy could include
a strategy for attacking your competitors.
Marketing people who generally want to wrest control of the whole shooting match
will protest that most of the strategies already outlined are themselves marketing
strategies. This is true, but in an operating context I think that it makes sense to define
departmental marketing and sales strategies at a sufficient level of detail to guide the
department manager.
You should of course revisit your organisation chart in the light of your latest think-
ing (see the value ladder in Chapter 4). Building a business plan is similar to assembling
a jigsaw with identically shaped pieces. You might think that you have one part right, but
you will want to keep looking back as the picture builds up to make sure that all the com-
ponents fit together properly.
PRODUCT STRATEGIES
In the process of evolving departmental strategies, you might like to think about an over-
all product strategy. Take a look at Figure 6.2. It illustrates a simple two-step technique.
Step one invites you to select a competitive approach with the extremes represented
by differentiating your product or being the lowest-cost producer. Step two suggests that
you define your areas of focus. You then know exactly where you are going.
Departmental strategies map directly on to your organisation chart. By
delegating execution of these strategies to department managers you are
halfway to having a smooth-running organisation working towards clear
common objectives.
120 CHAPTER 6 THE CORE OF YOUR PLAN
Incidentally, when thinking about your product strategy, take into account where you are
in the product life cycle. This is such an obvious point that I almost forgot to mention it
here. The cycle is illustrated in Chapter 8 because it is useful to discuss it in detail when
forecasting sales. Essentially, sales growth is slow when new products are introduced,
it accelerates rapidly as market awareness increases, but eventually levels off and then
declines when the market is saturated. The trick is to keep revitalising products to extend
their life cycle.
Differentiated products
Product line depth and breadth
Quality durability, appearance, reliability
Design changes/enhancements
Features fulfils users’ needs
Brand recognition
Low-cost producer
Simplicity basic product
Volume economies of scale
Skills efficiency, automation,
experience
Synergy pooling costs with other units
Integration vertical (supplies to sales)
Step 1. Select approach Step 2. Identify focus
Focus
Industry specific competitors
Product specific niche products
Market specific niche segments
Territory specific localities
Figure 6.2 Two steps to a winning product strategy
A product strategy is an excellent bridge between business and
departmental strategies. It helps you develop R&D, production and
marketing strategies that are fully integrated.
It might seem obvious to us that everyone should be pulling in the same
direction, but inspection of many companies suggests that this is not always clear.
All too often, marketing, production and R&D are all doing and promising
different things. Sad but true.

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