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"Nine Simple Rules for Better Business
Strategy"
All successful people have one thing in common: they know how to compete. Great competitors are not necessarily great in every aspect of business, but they know what really matters: winning. They have a special genius for creating great strategies. Fortunately, you don’t have to be born a genius to understand competitive strategy. The nine formulas in this book make it easy. Every day all across America, business people are making decisions without understanding the basic rules of strategy. In this book, we have distilled the lessons of strategic thinking into nine simple rules.
Know How to Compete Success can be simple. You don’t have to be perfect. You only have to be better than your competitors. Successful enterprises are not always excellent businesses, but they all do one thing very well: outmaneuver their competitors. Notice that we don’t say, “beat their competitors.” Among the many things most people don’t understand is that success isn’t about fighting battles and beating opponents. Fighting is costly, even if you win. Strategy is the science of leveraging situations to make yourself successful without fighting costly battles. You cannot leap into a winning position any more than you can leap to the top of a building. You build a dominating position like building a pyramid, one block at a time. This book gives you a high-level view of strategy. Once you master it, this viewpoint is breathtaking. What does this system of strategy entail? In the ongoing journey to bigger and better positions, your existing position is just your starting point. The techniques of strategy focus on advancing and building up that position over time. Success isn’t an endpoint in this journey. Success is maintaining and expanding your position. The nine formulas represent the nine steps you take, one after another, to advance your position. They offer the most powerful method for:
We cover a ton of material here. No book every written about business strategy has ever made these ideas so easy to use. Every other business book tells a lot of nice success stories. This book doesn’t. Other books offer a few fairly simple, somewhat disconnected ideas about the ingredients of success. This book puts all those ideas into a comprehensive system.
What Makes this Proven System So Easy My special talent is in making this rules easy for regular people to understand and use. At first I learned these rules myself and they made me successful. Then I began teaching them to my business associates and they became successful. Then I began teaching them to the largest organizations in the world. Over decades of using and teaching the rules of strategy, I have refined them to their essential elements. For example, the book's first formula, 9 Key Components, describes the parts that make up a strategic position. It puts your competitive position in a tangible form. The elements that define a position are not vague, subjective, or touchy-feely. It says a position consist of a philosophy, an economic base, a changing climate, a decision-maker, and certain key skills. These elements are solid and real—as solid as steel, as real as gold, but few people know all the trick for analyzing them. The process of advancing a position is called the Progress Cycle. This process is described by the eight other formulas in this book. This process leverages the situations you encounter to improve your competitive position over time. It teaches you how to identify competitive conditions and respond to them appropriately. The idea behind the Progress Cycle is simple. To advance your position, you must take advantage of opportunities. You do not create opportunities. You can only use the opportunities created by others, mostly by your competitors. To use an opportunity, you must exploit the weaknesses of your competitors. Once again, the rules are specific, clear, and easy to use once you know them. These formulas are succinct. We don’t tell you stories about other people’s success that are inspiring but difficult or impossible to apply. We give you the steps for writing your own success story. The process makes obvious sense once you know it. This book is a recipe book. We call our recipes "formulas," but each one is just a list of ingredients and steps for putting them together. Worth Thousand of Times What It Cost But the real value of this book comes from the mistakes it will help you avoid. Most business people make thousands of dollars of easily avoidable (if you know these rules) mistakes every year.) For many business, these mistakes are fatal. Eighty percent of new businesses fail within the first two years. Seventy percent of the Fortune 500 disappear every couple of decades. When their well-proven methods go wrong, all their high-priced, experienced professional managers and consultants cannot figure it out and fix it. For most businesses, finding success is like magic. Magic formulas can always stop working for “no reason.” Real formulas work for clear reasons. In this book, we give you the real formulas that explain how dominant competitive positions are built. Most business books oversimplify the complex businesses environment. Most business gurus reach into the complex cauldron of competition and pull out a few qualities that are sometimes important. But focusing on a few key pieces doesn't describe success. This book offers a different vision of competitive systems. All systems are more than the sum of their parts. To compete, a business must be complete. If a single key part is missing, the quality of its other parts doesn’t matter. A business is like a bridge. 95% of a bridge is no more useful than no bridge at all and a lot more expensive. Completing a business is more than product development, marketing, sales, manufacturing, product delivery, and accounting. More than anything else, it is correctly positioning your business. The science of strategy seeks to understand how competitors react to opportunities and challenges, how actions create responses, and how certain actions lead to success. In business, you not only have to think about what you will do. You have to think about how others will react to what. Like a game of chess, you have to think several moves ahead to be successful. That is what we teach you how to do in this book. The nine formulas of strategy are simple ways of describing competitive fitness. These formulas describe what actions you need to take and how they affect the system. These formulas are precise ways of describing the interactions of relationships in the marketplace. Using these formulas, you learn to see your business in a new and more powerful way. The dynamics of competition determine market winners and losers. You cannot
simply copy another business because no two businesses can occupy the same place
at the same time. You have to understand the forces shaping competitive
positions. You find real success by making your life easier. If you don’t
understand the forces shaping the winners and losers in business, you cannot
harness those forces. If you fight the dynamics of the marketplace, you are
doomed to fail. Strategy is knowing how to leverage the opportunities all around
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