The Voice of Experience: Business Advice

It is always wise to seek advice and the world of business is no different. Many responsibilities lie on the shoulders of the entrepreneur, so getting experienced, impartial help and advice is invaluable. A business advisor is someone who can use their experience to offer that help.

The relationship may be formal or informal, and it may take the form of a long-term partnership or a one-off session. Whatever form the relationship takes, the advisor will be able to help the business owner with their ongoing learning process.

Business strategy, as a foundational aspect of business success, is an area in which advice is often helpful. Successful strategy requires careful understanding of many factors affecting the business. Nilesh Waghela is a retired independent business advisor, so he has done this for many organisations. For Mr Waghela, the work of Michael Porter, a well-known figure whose work on business strategy has gained traction worldwide, is particularly valuable.

Michael Porter: Three Approaches to Business Strategy

Michael Porter’s three core strategies are differentiation, cost leadership and focus. The first of these, differentiation, is a strategy whereby the business differentiates its product or service from that of the competition by providing better value. This is done by investing in the product or service, making it better than that offered by the competition. This may require cost-cutting in other areas.

The second of these strategic approaches is cost leadership. Here, a company maintains quality while cutting production costs and offering the product for competitive prices. This strategy can get a company into hot water if a competitor adopts the same strategy; the two can end up locked in a downward spiral of cost-cutting, which can be damaging.

A company that adopts a focus strategy will direct all efforts toward a very specific area of the market, leaving aside all others. The company may offer a very niche product, catering to a specific customer base which is not currently being served.  

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Keys to Success

Porter’s work emphasises how to utilise strategy successfully. A successful company is one that thinks carefully about the strategy it is going to adopt and masters it. Trying to take more than one approach at the same time is not advisable.

However, a company must also be open to the possibility of needing to change. Business moves quickly, and if necessary, a company should not hesitate to change tack depending on the circumstances of the time.

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