It is very important as you contemplate a
new revenue stream, or acquisition that you consider
underlying strategy. Are
you a low cost provider?
If so, can you complete with the other low cost
providers and still make a reasonable profit? Are you a niche market where you may only have a few
customers that you cultivate and spend a lot of time with? Does the new product or service fit with your current suite
of services and products?
Welch: If you
don’t have a competitive advantage, don’t compete.
It is important that your company has a
unified vision of the company’s strategy.
As you are proving a new revenue stream, contemplate
Michael Porter’s elements of competitive strategy.
They are product line, target market, marketing, sales,
distribution, manufacturing, labor, purchasing, research and
development, finance and control.
It is very important that strategy be considered when
contemplating a new revenue stream.
A strategic-fit harmonizes the resources
and opportunities of a company.
So, how do you develop a strategy?
One approach is to analyze the market to define what
market your company will serve.
Identify what activities are the most profitable.
Which markets are too troublesome to enter?