Strategic Positioning: Focus vs. Flexibility

The mantra of almost all strategic planning discussions and recommendations is that a company cannot be all things to all people – – it must be focused in its choice of customers and how it will create value for those customers. In farming, the most common focused strategy is to be a low cost producer of commodity products for national or global processors where the competition is also increasingly global. In recent times, opportunities to produce differentiated products for customers that want and are willing to pay for unique product or process attributes has evolved, requiring different product/service features or new innovations that typically require incurring additional cost. It is difficult to be effective and efficient trying to implement both a low-cost focused strategy and a differentiation focused strategy in the same firm since they require different skills and capabilities as summarized in Tables 1 and 2. Most successful firms choose a singular strategy and emphasize implementation of that strategy.

Table 1. Commodity Product Strategy

Table 2. Differentiated Product Strategy

But markets change – – customers change their expectations, competitors enter the market, the business climate becomes less robust, technological advances occur – – the focused strategy is no longer relevant to the new market realities and the firm is strategically out of position. A new strategy may be more appropriate for the new business climate. This uncertainty of the future marketplace requires the firm to be flexible so it can adapt to the new economic landscape.

The dilemma of being both focused and flexible in strategic positioning can be best managed or resolved by delineating and clarifying the responsibilities of different members of the leadership and management team. The operations managers who are responsible for implementing the chosen strategy should emphasize the activities that will result in the firm being “Best in Class” in implementing that strategy – – they must stay focused. The senior management (and Board) in contrast are primarily responsible for choosing the proper strategy and adapting that strategy to the changing business climate and market place; they are responsible to regularly scan the environment and position the business to be sufficiently flexible to adapt to changes that are likely to occur in any dynamic industry like agriculture.

So what are the features of a focused strategy – – how might it be characterized and what should the operations managers emphasize as they implement that strategy? Table 3 summarizes the critical features essential to successful implementation of the common low-cost commodity production strategy.

Table 3. Strategic Focus – “Best In Class”

Table 4. Strategic Flexibility

And what are the flexibility features that the leadership and senior management team should emphasize as they scan the environment and consider the prospect of repositioning the firm in a new strategic direction? Table 4 summarizes those features which will enable the firm to successfully adapt and reduce the risk of being strategically ​out of position when there are shifts in the business climate and marketplace.