Page 3: Building a strategy
Business strategies are the means by which businesses achieve objectives. They usually take the form of long-term plans relating to the chosen markets, products and environment. A competitive strategy can be based on:
- having a distinctive position in the market. TNT's market position is based on differentiating itself from rivals through its speed, reliability and provision of services of the highest standard.
- building core strengths (known as core competencies). TNT's strengths are based on attracting and developing high-calibre staff who are able to exceed customer expectations so that customers remain loyal to the business.
TNT's strategies need to take into account a number of important areas. These include:
- what goods and services to produce, e.g. an integrated delivery service
- which territories will deliver best return on investment. TNT's international operations focus on key trading areas of Europe, Asia, North America and South America.
- how to build a competitive advantage, e.g. by providing the most reliable, customer-focused services.
TNT's Strategy Map
TNT's Strategy Map puts the customer at the heart of everything that the business does. It communicates to everyone involved with the business how the company will meet its goals. Specifically, it acts both as a practical guide and as a framework to achieve the business objective of growing profits. A strategy map also serves as a reference point to align the whole organisation. This is vital to ensure everyone is focused on the aims and objectives and understands his or her role in the delivery of them. TNT Express' commitment to the company strategy has been recognised as exceptional. During 2010, the company was admitted to the Palladium Hall of Fame. The Hall of Fame honours those organisations that have achieved extraordinary performance results through the use of the Kaplan-Norton Balanced Scorecard. Other companies in this prestigious group include Siemens, HSBC and BMW.
The basis of the Balanced Scorecard is, 'what gets measured, gets done'. It helps organisations to establish how operational activities link to the strategy and provide measurable impact. TNT's strategic map and its communications plan to cascade the strategy was judged by the Hall of Fame as 'best in class'. Since undertaking the Balanced Scorecard, TNT has increased market share, improved customer loyalty and achieved a higher return on sales.
Businesses deliver their strategies through a series of tactics. TNT's practical measures are set out under three main headings - Operational Excellence, Customer Relationship Management and Innovation. The map describes the journey that TNT is taking towards achieving the long-term aims. For example:
- The map shows that Operational Excellence will be achieved through a solid foundation of fast, reliable and quality services.
- From there, the Customer Relationship is improved by understanding what different customers want. This builds a stronger allegiance and loyalty.
- Innovation is about anticipating the future needs of TNT customers. Through stronger relationships the business can develop a joint approach and shared vision.