So, if a company needs a strategy, its leadership should start with customers' needs and values. There are only six ways for strategic development:
1. To create new values
to satisfy the current customers' needs
2. To find new, unsatisfied needs
of the current customers
and fulfill them with new values
3. To find new customers
for whom the current values
will be valuable.
4. To find new customers
, identify their needs
and create new values
5. To find new ways to monetize customers' values (for instance, subscription instead of purchasing)
6. To combine all the above
All the "strategies", such as "M&A strategy" or "diversification strategy", are secondary to customers' needs and values. For example, a company absorbs another company to offer its customers new values. It enters a new market to expand the business, but to do so it needs to find new customers and create new values for them. Sometimes a firm increases its market share to obtain some preferences (such as the scale effect in raw materials procurement), but these preferences should sooner or later be converted into customers' value.
I believe that the only thing such terms as "cost leadership", "product differentiation", "fast follower strategy", "price skimming strategy", etc., can do is to distract us, astray us from the main point – a business earns money by satisfying customers' needs.
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