Question

After reading Freek Vermeulen "Many Strategies Fail Because They're Not Actually Strategies", comment on the merits of his point that "Many so-called strategies are in fact goals. “We want to be the number one or number two in all the markets in which we operate” is one of those. It does not tell you what you are going to do; all it does is tell you what you hope the outcome will be. But you’ll still need a strategy to achieve it." (p 3). Offer an example, is there a particular company, product, or market that might serve as a cautionary tale?

Answer 1

A perfect example of a company that can serve as a cautionary tale is Kingfisher Airlines. The company was running perfectly, gaining a huge market in the Indian Airlines sector. Initially the company followed a strategy of running low cost flights and gained almost 16% of indian Airlines business.

But soon the company set its goals to achieve over 25% of indian Airlines market in the financial year 2011-2012, and started spending extensively on additional facilities inside the Airplane to attract customers. As per the company their strategy was to become the leaders of Indian Airline Industry which marketed and publicised too.  However there was no particular strategy formulated based on numbers and the only thing The company had in Mind was to gain over 25% of Indian Airlines market and become the biggest service provider in the country.

Only a vision and no or extremely bad strategies led to the downfall of the company, and in 2012 the flying License was suspended for the company and the company was completely shut down by the end of 2012 after it was unable to pay its loans and crumbled due to huge debts.

Thus, this shows weak or ineffective strategies can lead to the downfall of even the most successful companies once present in the market. If mission or goal is defined as a strategy, then there is no actual strategy to work on, and the system will soon fall.