Business strategy is about choosing the right ambitious, yet achievable goals across every dimension of a business model and then focusing the organization to execute the optimal set of actions to achieve those goals.

We'll dig deeper into the business model and how it works, but the big picture is the purpose of the organization is to efficiently and effectively develop and deliver the value proposition and go-to-market to fulfill the needs of the target customers better than competitors, all for the purpose of achieving the mission, vision, and values.

You typically solve the goals and actions from the top of the business model down. You start with a compelling and inspiring mission, vision, and values. You move on to crystallizing and understanding the target markets, customers, and geographies the business will focus on winning in. Next, you figure out the differentiated value proposition, made up of products, services, and pricing. You then amplify the value proposition with a go-to-market strategy, comprised of sales, marketing, and distribution. Finally, you define how the organization will improve the efficiency and effectiveness in developing and delivering the value proposition and go-to-market strategies.

On March 1, 1962, a retailer was born. In 1974, the retailer's Chairman proclaimed, "We believe that the concept of low-margin retailing, especially as we have been practicing it, will be around for a long time." 

Within 15 years, the retailer skyrocketed to $10 billion in sales, becoming the second largest retailer in the U.S., only behind Sears. Given its world-class management training program, it quickly became the largest private-sector recruiter of college graduates and was the envy of top students.

This retailer sounds a lot like Walmart, but it isn't. The retailer just described is Kmart, which defined and dominated the low-price discount concept for 20 years, opening hundreds of stores with sales climaxing in 1992 at $38 billion, the same year Walmart finally passed Kmart in annual sales on its way to becoming the largest company in the world with almost $500 billion in annual sales.

On July 2, 1962, Sam Walton opened the first Walmart, a mere four months after the first Kmart was opened. It is fascinating that Kmart and Walmart were born at the same time, in the same market, with pretty similar concepts, but over the course of their 50+ year lives, Walmart would become the largest company in the world, while Kmart would become a faint shadow of its former self. The question is, "Why?"

Strategy is simply the goals we choose and the actions we take to achieve those goals. Part of Sam Walton's genius is his original mission for Walmart, which was "to give ordinary folk the chance to buy the same things as rich people." Sam focused on driving better customer value than competitors, rather than Kmart's focus on growth, codified in their mission in the 1970s, which was to achieve $12 billion in sales by 1980.

Over the next 50 years, these very different missions translated into very different strategies manifested in millions to billions of different sub-goals and billions to trillions of different employee actions.

Check out #4 on the Sears ad for a Corningware Electric Percolator for $29.95. Given inflation, the price of that percolator would have been $232 in today’s dollars! Today, you can get a nice Hamilton Beach coffee percolator at an everyday low Walmart price of $37.99, which in 1962 dollars is just $4.90. In 2017, you could buy six coffee percolators for the 1962 price of 1 coffee percolator!

Now, there are many reasons why the inflation-adjusted price of many products is much lower than in 1962, including overseas manufacturing, value engineering, automation, transportation efficiencies, scale economics, etc. But, you can argue one of the most significant drivers is Walmart and the millions of employees of Walmart, who over the past 50 years have made millions of strategic sub-goals, which has led to trillions of decisions and actions all to give the ordinary folks the chance to buy the same thing as rich people. 

With the proper focus, strategy isn't complicated. If your organization develops and executes great strategies, your company will grow. The magic with Walmart came down to a simple and inspiring mission focused on customer value. While Walmart now faces new competitors that arguably do a better job at driving customer value, no one can argue that from 1962 to the early 2000s, Walmart drove incredible customer value and shareholder value. Those fortunate enough to purchase $1,650 worth of Walmart stock in 1970 would see it worth $4,000,000+ today.

If you need to develop a strategy, I encourage you to read developing a strategy or set up some time with me to start figuring it out.