BY DR. TANAI CHARINSARN

SEPTEMBER 15, 2016

WINNING STRATEGY

Who are our business customers?

It is essential for a business to identify its primary customers. Who are the individuals or entities with the authority to pay for our products or services? For instance, a major company like Facebook Co., Ltd., which owns the social network giant Facebook, Inc., is the real customer for their organization. It is not the number of users in their system but rather those who pay for advertising. Having a large user base only provides visibility (Eyeballs) and doesn't guarantee that advertising on Facebook will be effective. Even though the user engagement rates might be high, the Click-Through Rate (CTR) remains relatively low.

Even though Facebook recently announced having over a billion users, they faced challenges in the stock market, and their stock didn't perform as expected. In contrast, giant search engine companies like Google Inc. are popular among high-value investors, and Google continues to benefit significantly from advertising space sales.

The limitation Facebook faces is that its service users don't primarily come to buy products or services. Instead, the real benefit lies in connecting with friends and social communities. This is different from Google, where users come to search for products or services they genuinely need. Users are more interested in making purchases, which results in higher Click-Through Rates (CTR) for advertising on Google. Advertisers have more trust in Google's platform. Additionally, the shift towards mobile device usage instead of desktop computers has affected Facebook's performance, making Google a more favorable choice for displaying ads. These two factors represent significant challenges in building trust among advertisers for Mark Zuckerberg and his team.

What benefits do our customers get from our business?

In terms of strategy, we look for the Value Proposition or the benefits offered by the business. Put simply, if our business didn't exist, would customers be worse off? If not, it means our business isn't providing any real value. Another aspect that strategic analysts must consider is Customer Insight and understanding where the Unique Selling Point (USP) of the business lies. For example, Starbucks Coffee's brand benefits customers by providing "The Third Place." This is due to an observation of changing consumer behaviors. Starbucks Coffee's customers are those who seek a place to work, meet, chat, have a drink, and have a convenient meeting spot, whether they're in groups or alone. Recognizing the value a business delivers to its customers is critical for building an efficient strategy.

How will the business be operated?

Once a business understands what customers need, the crucial element is the business's capability and the resources required to make it a reality (Operating Model). This is vital for a business's competitive capability. It involves preparing all the necessary resources, such as raw materials, personnel, machinery, and equipment, and combining these abilities to deliver value as promised to customers. For instance, Starbucks Coffee focuses on quality control of coffee beans, training baristas, interior store design, and the ambiance, including decor, music, and coffee aroma.

How will the business make money?

The ultimate answer in business is profitability because, without profit, a business will only survive as long as it has capital. Although financial support can be obtained to help keep a business afloat, one must recognize that no one is ready to assist continuously. Even if a business has a delayed profit, it's essential to consider that the business will eventually generate profit. An example of a business that had the ability to make money in the future is Amazon.com, a company that accepted losses for over 10 years. In the end, it managed to generate profit.

The Operating Model that Amazon.com executed effectively involved collecting various types of books worldwide on its website and selling them at lower prices than the market. Customer service, such as allowing hassle-free returns, even if customers were not satisfied, was a crucial part of their strategy.

( For more details : http://www.amazon.com/gp/mpd/permalink/m3RY5SZWBOJZFO/ref=ent_fb_link )

How will we differentiate ourselves from long-term competitors?

The challenge of creating a good strategy is ensuring the business's sustainability and finding ways to make your business unreplicable. Conducting a SWOT analysis of competitors will help assess if they can copy your business. If you have Distinctive Competency and engage in complex activities that are unique and interconnected, it will be difficult for competitors to replicate your business.

Remember, these are essential elements to consider when crafting a business strategy. They will help the business identify its target customers, understand what benefits it provides, define how it operates, and determine how it generates profit and distinguishes itself from the competition.

Sources :

http://www.starbucks.co.nz/index.cfm?contentNodeID=415

http://www.seattlepi.com/business/article/Fair-Trade-coffee-growers-emphasize-quality-1064046.php

http://www.jingdaily.com/to-caffeinate-china-starbucks-takes-a-page-from-burberrys-playbook/9809/

http://www.whatsonxiamen.com/wine_msg.php?titleid=1416