Diagnosing Strategic Problems

There is a reason why medical doctors have one of the highest salaries - health of a person is critical and often outcome depends on a diagnosis. A company is a person in itself and is characterized with the same problems - virus, temporary flu, headache etc. Diagnosing it is done in exactly the same manner as humans are diagnosed for diseases - you look at the facts, try to gather as much information and then analyze it to figure out if it fits in the general range of acceptable values.

One such symptom that we can observe is that the company's products are perceived as relatively substandard. This is a problem that doesn't need necessarily studies and questionnaires. All you have to do is overhear conversations. Think General Motors. They have been one of the largest US producers and sellers of vehicles. They probably still are, but their logo now carries a different message - expensive, low mileage, and substandard vehicle. This really hurts sales, forces them to lower prices of cars, give more promotions, reduce their R&D budget and so on. It is actually interesting how GM has not yet adapted to this problem. They seem to choose short term strategies over long term brand image. It is actually quite amazing because it seems to be it takes far more persistence to build a bad image than a relatively good. That also shows another problem - GM is not willing to adapt. This is a huge hint that GM is really sick and needs not a flu shot but an emergency heart transplant.

Another interesting problem that can be observed with a lot of companies is lack of focus. There is a reason why everybody says it is good to find a niche and concentrate on it. With limited resources and time, it is crucial that companies stay on track with what they are doing. Well the example that I will provide has quite a lot of cash sitting in their accounts - in billions, but that shows only one thing - you lose focus, and you don't do well even if you have enough (close to limitless) cash. No focus means there is no passion, which means there is no desire to make a better product and serve the customers. Let's look at Microsoft. After taking over and completely controlling the market for operating systems and productivity office package, looks like they have spread their tentacles all around the computer sphere - online chatting, social networks, search, portals, emails, came consoles (xbox). Name it - they are making it. And this is not really a problem because as we can see Google has pretty much all of these too. The problem is that Microsoft's products are not the best. They are not only not the best, or even outstanding, their products just honestly suck. Now that they are losing market share in operating systems and productivity package, they seem to have no products that are worth talking of. Or rather praised should I say. Google on the other side is doing quite well. Maps, Gmail, Search, and OpenSocial (not theirs completely but they are so to say organizing it) are absolute leaders in their genre. The only way I see MS get out of this big mess is cut on products and try to be the best in few things only and bring real value to their customers.