Strategy or tactics?
What comes first – strategy or tactics? It’s more accepted that a
strategy has to be formulated first, meaning starting from the “top down”. First of all to define which
customers we will focus on (niche or mass market?), what will
set us apart from others (some added value or low prices?), how we will consistently attain a
competitive advantage over the competitors (thanks to technology, branding or exclusive distribution agreements?), what our
organizational DNA is (what is our vision, what are our values?), etc. And then, after we have formulated our business and marketing
strategy and have written a perennial strategic plan, we can plan our objectives for the upcoming year and develop specific tactics to achieve our goals.
For example, a cellular company formulating a strategy can choose to focus on business customers in Europe (a niche) and offer them prices that can’t be beat (low cost strategy). They will achieve this by using VoIP technology (technological advantage to be attained for example via partnership agreements with Skype), and using the vision of “mobile is cheaper than a land line”. After the strategic plan has been written, different objectives will be determined for the upcoming year. And if, for example, the decision was made that 100,000 subscribers need to be recruited in Germany during the following year, there will now be a need to formulate specific tactics (=plans of action) on how to achieve this goal. For example, to first contact private owners of small organizations in Germany (where they consider each business expense to come out of “their own pockets”), or to develop a calculator that will show potential customers how much they will save if they become the new cellular company’s customers.
However, even though it is acceptable to develop tactics from strategy, the opposite option is also definitely an option! In other words, to identify a winning tactic and adapt a strategy to it. A classic example is Domino’s Pizza, which currently has 8,400 branches worldwide and whose revenues were 5.1 billion dollars in 2006. As Tom Monaghan the founder stated, Dominos grew not thanks to a better pizza, but thanks to the
tactical idea that he developed way back in 1965, when Dominos had only 3 branches. The idea was simple: “to arrive at the customer in 30 minutes, guaranteed”. Tom developed a comprehensive strategy that would support his idea. This is why, for example, a very small range of products was offered in order to improve efficiency and speed (2 pizza sizes, only 6 types of toppings, and only one drink – Coca Cola). Also, the distance between two proximal branches was determined by the need to arrive at the customer within 12 minutes. In addition, the baking technologies were refined in order to be able to bake a pizza within only 10 minutes from taking the order. It also turned out that the ultimate customers were hungry college students living in dormitories (and new branches were opened accordingly close to the universities). In other words,
Dominos tactics determined their strategy: the customers they should focus on (students), what set them apart (quick pizza deliveries), the technologies to speed up delivery times and entrench the competitive advantage, and the organizational values (expeditiousness, speed, efficiency).
Here are a few more examples of companies, goods and services that started as a first rate
tactical idea that generated their growth and led to the development of an entire strategy around it:
- Little Caesars pizza chain – which always (and only) offers “two pizzas for the price of one.
- The 7-11 mini market chains – open from 7 a.m. to 11 p.m.
- FedEx – day-to-day delivery (from anyplace to anyplace).
- Surf – a laundry detergent with twice the fragrance of other competitors.
- Google – a search engine that ranks the relevancy
of content according to the number of related links.
The conclusion we can draw from all of these examples is that sometimes superb tactics can serve as inspiration for an entire strategy. Therefore, it’s very worth it to have your finger on the pulse, open your eyes and to see what “simple” tactical changes can generate a greater demand among customers. Continuous sales? Longer opening hours? Faster service? Stronger scent? Sorting customer queries? If you found something interesting that changes the standard rules of the game – it may be that you can develop an entire strategy around it. Sometimes, thinking from the “bottom up” can be the key to your success!
- For workshops on Strategy and Marketing:
(PDF booklet, in Hebrew)
- For articles on strategy and other topics:
- Information on strategic consulting: