Business Strategy: Stocking Up the Right Way

For a production process to run smoothly, having the right quantity at hand is a must. Whether it takes place in one’s kitchen or in a factory, having control over your inventory is an assurance that production is efficient and costs are kept at a minimum.

Proper inventory control happens when there is optimal procurement, care, and disposition of the right materials which are required for the manufacturer or distributor. The output of inventory control manifests itself in the proper maintenance of stock that is in line with the market demand and sales trends. It is able to reduce carrying and holding costs as well as improve the stock turnover rates. Furthermore, a business’ reputation can be solidified by having adequate merchandise on stock all the time.

For better control of inventory, here are five steps that help make the process simpler and may contribute to the overall success of a business.

1. Plan the inventory. Efficient inventory control begins with a well-organized and structured plan. The movement of new goods should be organized and must have a well thought out schedule. For instance, stocks that have been on-shelf for several months should be replaced as soon as possible. In the same way, shelves should not look empty as much as possible. It is recommended to use free inventory control software to make things easier.

2. Order cycles must be established. A regular ordering pattern should be established especially when the demand for the products can be predicted with a relatively low margin of error. When preparing the order, the costs must be considered. The aggregate shipping cost and other related fees must be included when setting up the order cycle. Not only will this help minimize expenses, it also creates a tailored system that suits the business’ most pressing needs.

3. Stock levels should be balanced. Trade-offs between cost and material availability must be determined to come up with an optimized inventory level. The inventory is said to be optimized when it does not result in excessive carrying costs but is able to satisfy the market demand.

4. Make the merchandise accessible. Good inventory control is defined by keeping the inventory up to date and avoiding those that are obsolete. Instead of holding on to the merchandise that don’t sell or move, it is better to mark down their prices.

5. Make sure to follow up on the inventory. Checking the figures and reviewing the items being sold will help in correcting disposal decisions, replacements, and the possible discontinuation of some SKUs.

For an organization to run smoothly, the inventory control must be efficient in a way that the managers and the employees both understand the flow or the entire process. For an inventory management system to work and to minimize costs, one must make sure that there is just enough supply of the right materials at the right time.

Coach The Sales Strategy (And Your Forecast Will Take Care Of Itself)

It’s been said that some salespeople make things happen, some watch things happen, and some wonder what’s happening. The difference lies in having a strategy and leading a team to execute it effectively.

Strategy is a plan to deploy resources in a way that brings your strength to bear on the opponent’s weakness, creating momentum that leads to victory.

You can win without a strategy. It’s called luck. Direct salespeople are paid to make their own luck. You can get luck with a Web site.

The models of strategy descend from (like it or not) military history. In the last few years, many business executives and military leaders have been studying classical leaders’ strategic models to determine the models of strategy, which can be applied to company or marketing-level strategies of today. We do this because the models are timeless; the application is situational. It requires allegorical thinking. Models allow us to anticipate future events and to communicate that vision. Intuitive or “natural” salespeople or managers without mental models may have trouble leading a sales team because they don’t know why they are good and can’t transfer that knowledge to someone else.

Classical historical strategy drives market strategy; market strategy drives industry or territory strategy. At the sales level, it is critical we strategize at four different levels:

· THE INDUSTRY MARKET LEVEL

· THE ENTERPRISE LEVEL

· THE OPPORTUNITY LEVEL

· THE INDIVIDUAL LEVEL

Only then can you drive a complex sale strategy in its entirety. Each level requires different technique, talent, and technology that can communicate the enterprise strategic account plan worldwide.

WHY STRATEGIES FAIL

Knowledge is power; the more you know earlier, the more advantage you can have. It’s amazing how little most business developers know about their accounts after months of involvement and considerable resources.

Failure is the seed of learning. By studying why strategies fail, we learn how to make them succeed.

One of the major reasons strategies fail is poor information. There is not a general out there who wouldn’t trade troops for better knowledge of where the enemy is and which way they’re headed. That’s why spies are so important. In the Persian Gulf War, our initial strikes were to knock out the information and command centers and blind the opposition.

Another reason for strategic failure is no strategyat all. Imagine a quarterback in American football coming out on the field and having a huddle. The team asks what the play is and he says “I don’t know, let’s just go for it.” (We’ve all been in those presentations.) If the quarterback calls the snap and fades back to pass and the rest of the team is going out for an end run, this person is going to get footprints all over his body. Effective power comes when the entire team knows the plan and can execute it, with timing, together.

Another fatal error is not having a plan B. Some leaders plan only for the best possible outcome and assume how the competition will react. They don’t test their plan and develop alternatives. The speed of change in marketing and sales today is so fast that a rigid, inflexible, or static plan will result in defeat.

Speed of information drives speed of strategy drives competitive advantage. By the time you win an opportunity, you may be on plan D, E, or F. This doesn’t mean we should be indecisive. There must be a conscious reanalysis and coaching process for absorbing new information and processing it into new strategies, tactics, and actions.

Other sources of failure include poor execution. Patton said a good plan violently executed beats a perfect plan we’re constantly thinking about. He also realized that speed gives the opponent less time to perfect their plan and defenses.

Strategies also fail because of bad timing- the right thing done at the wrong time, too late, too little, or even too early. Because issues and politics change, a time-based strategy is essential to victory.

The inability to have a process for absorbing new information and generating new accurate strategies can often lead to indecision, poor priorities, or waffling, all of which can prove fatal. IBM’s response to the justice department’s attempt to break them up resulted in not two but three strategies that were not a migration path for the client but were competing strategies, leading to their decline in the 1980’s.

A classic principle of strategy is not to divide your forces in the face of a superior foe – spreading yourself too thin. Multiple strategies can work. The allies did it successfully in World War II. But it requires more resources, clear priorities, and decisive leadership.

The last source of strategic failure in sales is failure to pursue the battle won. “Hit-and-run selling” or “drive-by selling” is when you get inside the walls, then leave for the next opportunity rather than selling from the inside out.

The best account managers use opportunity management in tandem with account strategy. Why? Because real profitability comes from shorter sales cycles and better margins on repeat business after you gained access, built trust, and reduced risk.

A DYNAMIC STRATEGIC PLANNING MODEL

Patton said, “Luck favors the man in motion.” By this he meant that the person in motion not only keeps his or her opponent off balance and unable to process new strategies but in the process of action, he or she finds out more information faster than the enemy.

The information processing cycle is known by fighter pilots; they live and die by it. In the movie Top Gun, Kelly McGillis asks Tom Cruise, “What were you thinking up there?” His reply was, “You don’t have time to think. You take time to think up there, you’re dead.” By that he meant it must be habit and reflex. The pilot must have all the models in his head to be able to process strategy instantaneously.

Many salespeople don’t process this at all. They pick a company and product strategy and plod straight ahead until they either win or lose. If you could always win on company and product, why do you need salespeople? Most salespeople don’t know when to trigger alternative strategies. Those who do, win more often.

DYNAMIC, FLEXIBLE STRATEGY

The first step in the strategic process is information. The more we know – about the competition, the decision-making process, the politics, and the client’s needs – the better we will be able to formulate a more accurate strategy.

Information drives strategy. Then you need a vision of victory. Salespeople need a mental picture and map of how they plan to win. They also need electronic communication tools to get it out of their head and into the teams’ heads. Then the team needs effective presentation skills and graphics tools to get the benefits out of their heads and into the prospects’ heads.

Next you need to set goalsand objectives. These terms get switched around semantically, but a goal is more general than an objective. An objective defines what you want to do in measurable quantities and is date-driven. It is less important what you call it than that you have one and execute it well.

Setting a clear objective is essential to defining the strategy. If we don’t know where we’re going, any road will do. Covey says, “Start with the end in mind.”

Strategyis how you intend to achieve the objective; it’s your plan of attack. It is how you plan to allocate resources, what you’re going to sell to whom, where, and when. Tactics are the day-to-day detail actions you do to execute the longer-term strategy.

STRATEGY COACHING REVIEWS – THE ANTIDOTE FOR “HAPPY EARS”

The most essential part of a strategic plan is the testing of it. Professor Tom Kosnik of Standford University says, “Testing their strategy is what separates the amateur strategists from the effective ones.” But it’s also where our tradition of positive mental attitude can get in the way. The best of plans require critical thinking and that is perceived by some people as negative.

It is true there is a self-fulfilling effect of positive thinking. However, too often this results in assumptions, or “happy ears,” for salespeople who are always ignoring the facts. The account looks good, right up until it’s lost. There is a balance point of critical thinking, attacking our own plan without becoming negative. In the movie A Bridge Too Far about Montgomery’s failed attack at Arnhem, the Polish general Sosabowski (played by Gene Hackman) said, “But what about the Germans?” No one wanted to question the assumptions in the plan, and the attack failed.

Bad news early is good news.

One thing is certain: Your plan will be tested – by the competition, the client, or Murphy’s laws. But it will get tested. Salespeople who were too busy to plan will now have to find another prospect.

Bad news early is good news because we can either refine our strategy or withdraw from the account. Blind spots late are bad news. Bill Gates says about himself in Business @ The Speed of Thought, “I have a natural instinct for hunting down grim news. If it’s out there, I want to know about it.” “An essential quality of a good manager is a determination to deal with any kind of bad news head on, to seek it out rather than deny it.” A Fortune magazine article on “Why CEOs Fail” described one of the warning signs of executive denial as a background in sales or marketing.

Who do you want to test it? Your own team. And from whom do you want the bad news? People who want you to win – your own team. But it means leaving your ego at the door and improving your plan rather than defending it. Testing plans on the job is learning by losing – a far more expensive approach, except for the fact that lost sales never hit the books, so you may never know how bad you really are.

For every self-fulfilling positive mental attitude success story, there are a dozen disasters in sales and marketing from people who didn’t adequately challenge their own plan. Edward DeBono has a book called The Six Hats of Thinking. One of these is a red hat for the positive thinking aspect, but there is also a hat where we attack our own plan to find the flaws in it before the competition does.

Nothing increases positive mental attitude more than winning. If we can anticipate the failure points and strengthen them, we should have a much better plan as well as plan B, C, and D in the pocket.

Next, you must execute. The devil is in the details. But an average plan can be overcome by great execution, Likewise, a perfect plan can be defeated by poor execution.

Finally, you get results and new information based on a call, a presentation, or a survey. In sales it is essential that you process new information and come up with a new plan or revalidate the old one.

The best time to reevaluate strategy is right after a sales call (not in the elevator or the bathroom, but after we get out of the building – the walls have ears). The curbside review is important to detect new information, critique performance, and make sure who has the ball on each action item. If you scatter like quail for the airport without taking this valuable time to strategize, you have missed a great opportunity.

The next time to revalidate your plan is in a strategy session before each major event requiring resources – the big proposal, the big presentation, or the corporate visit. These are essential. Once your top executives say the wrong thing because they weren’t prepared adequately, you can’t buy enough “mind erasers” to get it out of the prospect’s head. “What the chairman meant to say our strategy was – never mind.”

COACHING – THE MANAGER’S VALUE ADDED

Competitive advantage doesn’t come from awareness of a strategy; it comes from consistent execution faster than the competition. Coaching is where managers can make the difference. And yet many sales managers and most consulting partners don’t see this as a major part of their job. They simply “flog the forecast until morale improves.” Salespeople need more than “how much and when?” from their managers.

Pipeline reviews by management in a coaching environment are where you drill down into the competition’s strategy, the value proposition, and the politics of the decision-making process. More accurate forecasts come from a foundation of better sales plans for accounts controlled early and reviewed often.

Tips for An Effective Online Business Strategy

Many people are gazing for ways to increase their earnings through the Internet. The existing world economy has worried a lot of people as to how they will be able to cater their current requirements, and at the same time about funding their retirement. The Internet is hugely striking, since computers are available in almost every home and the prospect of earning money via the Internet is attracting the working class. There has been a great rush to accomplish business online, and you must know how to stay competitive and in front of the pack.

Identify your product

With the intention of staying ahead of the competition when it appears in online business, you must clearly identify your product. This engages getting systematically familiar with what you are going to market and how you will be able to persuade all the budding customers. An acquaintance of your products occasionally may also engross familiarity of the competitors’ products.

Try to be exceptional

Due to the intense competition existing in the world of online business, there is no place for weakness or careless workmanship. Your business must be able to perform with a high degree of brilliance, ranging from the appearance of the product to customer service. You can ask for expert advice on facets such as presentation. This means that if you have to design a website it has to be expertly done by a specialized person. You have to go for a website design that is truly exceptional and make an attempt to do things like graphic design, presentations and everything related to the products or services offered. The website that looks poor and unethical ends up doing extensive harm than benefit.

Always remain active online

There is a definite amount of involvement needed on your part being an online business proprietor. In case, you establish a website, you must be able to market it properly. Even otherwise you’ll be unable to know your target market. A certain level of involvement is required in forums, answer bags and the social media. These types of activities definitely generate a buzz about your website and bring about traffic.

Conduct marketing of your business

Beginning an online business is one aspect; however marketing is another significant one. Deficient in marketing denotes a business without any potential customers, and this leads up augmenting your business expenses to a greater level. You can check online for the steps you necessitate to accomplish marketing of your website, such as content management, press releases, product description, blog submission, forum discussions and pay-per-click promotions.