Professor Michael Porter is recognised as the father of modern business strategy. His career at Harvard Business School has culminated by being appointed “University Professor”, their highest recognition, and he’s also received 22 honorary doctorates and numerous awards.
I recently heard him give a masterclass on strategy and will be sharing this in detail with our members and thought I’d give an overview in todays four-i – I hope it’s useful.
Q. What is a strategy?
A. Long term choices to distinguish ourselves, to define a distinctive approach and competitive advantages. Strategy is ‘How’.
There are 5 key things you must have for an effective strategy:
- Unique value proposition
- Distinctive value chain (how you operate differently)
- Make clear trade-offs, (choose what NOT to do)
- Integrating choices
- Continuity of strategic direction
How do you measure up against these five tests?
- To what degree is your proposition unique? (Or is it the same as most of your competition? )
- How different is your operating model? (Or do you operate like everyone else in the sector? Do you look the same, sound the same, act the same, charge the same as everyone else?)
- Do you have a clear idea of both what you do and what you don’t do? (“If you take all the customers that just walk through the door, the chances are you don’t have a strategy.”)
- Do your functions fit together and reinforce each other?
- Are you continuously improving in alignment with your strategic direction?
Porter said one thing in particular that really stood out for me and might shock you: “It’s a horrifying industry when you get selected for your differentiation BUT at the same price as the (undifferentiated) competition.”
The reason why so many estate agency businesses are struggling at the moment isn’t primarily because there are fewer transactions, nor because costs are increasing, and it isn’t because property prices are static. No, the main reason is that they don’t have a clear and compelling proposition distilled into a strategy that is brilliantly executed.
At the EA Masters, we will be showcasing several “next generation” estate agency businesses that are achieving significant and highly profitable growth and their strategies for success. We will be discussing with industry leaders what lies ahead for the sector and how businesses can stand out, charge more and be in high demand. We will be showcasing the latest innovations to assist agents to be the best that they can be. Above all, we will reveal what the Best Estate Agents in the country do and don’t do – in other words it will be a masterclass in Estate Agency strategy.
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