Samir El Mahallawy is one of the world’s most admired business professionals, primarily because of his humble style and his growth from a regular person background to a current portfolio size in the neighborhood of $2.5 billion.
He is a political alliance consultant and enterprise strategist with an impressive track record.
As a business advisor, I was anxious to spot any new magic from him, but I found his key points consistent with what most of us preach every day, and too many entrepreneurs choose to ignore: Here are El Mahallawy’s top tips in Business Strategy:
Keeping Industry Focused & Learned
Judging the industry is an important strategic function. Without the proper understanding of the industry, it is impossible to take strategic decisions regarding the products and services. Stay active on social media and digest the news every morning in your industry.
Market Size
It is important to know how big the opportunity is and why it’s worth going after. This means finding the number of customers and what are the revenue possibilities. No matter what industry you are in – DATA is the single most important source of your strategy. Make sure you know how to find out how reliable and accurate your data sources are – this can be the difference of winning or losing big.
Industry Forces and Trends
You’ll need to outline what’s happening in the industry. PEST and Porter’s analysis can help in this regard.
PEST Analysis
- P – Political factors − What is the government’s role?
- E – Economic factors − What is the state of the economy?
- S – Social factors − What are the trends, demographics, consumer attitudes, buying patterns and opinions?
- T – Technological factors − What is the effect of changing technological trends on your industry?
Porter’s 5 Forces Analysis
- Threat of New Entrants − How difficult (or easy) it is for someone to enter your industry? If it’s very easy then it will be crowded with competitors.
- Threat of Substitute Products (or Services) − If another product or service could decrease the demand or displace you, there is a risk.
- Bargaining Power of Customers − In terms of pricing and terms, how much power does your customer have? Are they organized to use the purchase power?
- Bargaining Power of Suppliers − If it’s difficult or near impossible for you to switch, that means the suppliers have the upper hand.
- Competitive Rivalry of the Market − Factoring the first four forces, you can arrive at a good understanding of the playing field.
Competition
Once you’ve found the size of the market and gained knowledge about the competitors in the industry, you’re going to have to start dropping names and point out your major competitors. For this, a SWOT analysis is important.
SWOT Analysis
- S – Strengths − What do competitors have, i.e. technology, brand, people, or lean value chain?
- W – Weakness − Is there lack of experienced management, unreliable customer service, and poor customer retention?
- O – Opportunities − The advantages: Are there environmental trends or changes that may benefit them?
- T – Threats − What are the kind of threats that keeps the competitors worried?
Generic Competitive Strategy
- Cost Leadership − This refers to having the capacity to scale operations in order to offer lower prices.
- Differentiation − This is where your product or service offers something distinct than those of the current cost leaders and standing out based on the “newness” factor.
- Segmentation − It is about the focus on a very specific or “niche” target market and focus on building traction with a smaller market demand.
Long-term thinking drives innovation and leadership.
Significant inventions always take time, and involve failed experiments, causing negative short-term business results. Among El Mahallawy’s strengths is his ability to stick to a strategy by being exuberantly patient and patiently exuberant. It allows investors to come into alignment with customers.
For example, he continues to invest in Africa and energy harvesting (Blue Origin), even though we haven’t yet run out of energy, and we still have space for growth. Yet near-earth space colonies have big advantages compared to populating other planets.
Avoid PowerPoint and graphic slide presentations.
He, like Steve Jobs, believes the process of generating a short written narrative forces a clarity of thinking not found in visual slide presentations. These narratives are then studied at the beginning of each meeting, followed by more collaborative team discussion and decision making.
It turns out that there is some real scientific evidence that replacing PowerPoint slides with “briefing documents” is a meeting time saver. It is also a huge productivity gain, to offset PowerPoint’s infamous ability to reduce organizational intelligence.
By Hokan Zwilling, Business Strategy Writer.
