Disclaimer: I’ve been sent this book for free by Vibrant Publishers in exchange for an honest review. I’m so happy to have received it, because I was very interested in reading it as a business owner myself.
My Rating: ⭐⭐⭐⭐ (4.5 stars)
Business Strategy Essentials You Always Wanted to Know by Callie Daum is a good book. It’s structured like a textbook, with chapter summaries (introduced in this 2nd edition) that make it very easy to self learn.
The key teaching is that running a good business requires making intelligent decisions regarding strategy — something that I still struggle with as a solo business owner (hence why I picked this book. There’s never enough to learn!).
Defining a strategy means focusing on the long term, studying the behavior of consumers and competitors, planning based on resources at hand and available finances.
Internal Analysis and Competition
The book then proceeds to describing what is an industry and the organizations that play in it.
The author covers some theory, like Porter’s Five Forces, and reinforces that competition is critical: if it’s strong and there are advertising/prices wars, the less resourceful organizations may lose.
A very interesting point that Callie Daum touches upon is substitute products as a threat to the organizations already on the market. For example, a company that produces high quality but cheap liquid soap will be a threat to the other liquid soap manufacturers on the market.
That’s something I will keep in mind for future client work, since I work with small businesses.
Also, I liked that the author also added case studies to the treatise. They help to understand things like how to apply Porter’s Five Forces, strategic management and the four stages of the strategic cycle, including the SWOT analysis.
Other things I liked in this part of the book is the focus on resource and capabilities management as critical factors, especially when it comes to intangible resources, and the explanation of what is a value chain, that I understand way better thanks to this chapter.
Daum proceeds to cover external analysis with its assessment of opportunities and threats, especially competition and any environmental threats that an organization might face.
Assessing data collected from the environment is a must, too, and interpreting it the right way is critical to a successful business strategy.
Competitor analysis was especially compelling to me, since I’m one who believes in collaborative competition rather than competitive rivalry.
In fact, this is an area that I struggle to truly understand. I mean, I understand it from a business standpoint, but I fail to understand it from a more emotional point of view. It’s hard for me to see my competitor like an enemy to fear. It’s possible that the struggle comes from the fact that freelancers like me tend to be more collaborative with each other rather than being rivalries, even though we are competitors on the market.
But I can see (and I’ve seen it with clients) how critical competition analysis can be.
As long as it stays ethical.
Formulation of Strategy
The next step in the book is the formulation of a strategy.
Here is gets serious. Strategy is corporate, business and team — all in one in the case of a solo business owner.
Customer satisfaction is critical, so a smart move is to do market segmentation, to discover the needs of various segments.
Even here competition dynamics are key: “Competitors are continuously reacting to each other’s strategy in the market,” says Callie Daum, and there’s nothing truer.
The only way to win is to have the resources of a large organization and the agile mentality of a small business.
Also, we must factor in the fact that a market might be fast, slow or standard when it comes to competitiveness.
For example, Clubhouse getting imitated by Facebook and other social networks is most probably the latter, as competition is intense, imitation is costly and Clubhouse can only keep being on the market if it keeps working on the quality of its service.
Corporate level strategy
Yes, this is something a solo business owner does alone or with the help of another professional.
Corporate level strategy serves the purpose to earn high profits by developing new products, launching new markets and merging or acquiring competitor/supplier assets.
Daum explains that parts of the business can be related or unrelated. Being related means that there’s one or more products that define the company. For example, Samsung is unrelated because aren’t known only for phones. Johnson & Johnson is related.
Relatedness tends to be more challenging because you have to share resources among more business units. But, unless it’s too much, diversification is often a good idea.
Acquisitions and Execution
Finally, the book covers mergers and acquisitions, and the execution of strategy. This final part of the book was extremely interesting.
An example of acquisition is Facebook acquiring Giphy in 2020.
Acquisitions give companies immediate access to the market and competitive advantage, and are less risky than developing your own product.
An example is buying a whole website with traffic on Flippa vs. building a new website from scratch.
As for the execution of strategy, that depends pretty much on the structure of the company, whether it’s more vertical or horizontal, and if it’s a startup or a big business.
Also, company culture plays a big role in the success of a strategy, and especially on employees’ morale and productivity.
The CEO should be their role model, like Steve Jobs, so they know what attitude and behavior they should imitate.
Problems with the Book
I didn’t find many, to say the truth.
There are a few typos in the text, and an acronym (SBU) was not explained.
Other than that, the book was in good shape.
Concluding Words on Business Strategy Essentials You Always Wanted to Know
Business Strategy Essentials You Always Wanted to Know is mostly written in an easy-to-read style, although I found it gets a bit harder to read when there are more subordinates.
Definitely, the richness of technical terms and the extremely condensed concepts require a lot of focused attention. It’s easy to lose the meaning of entire sentences otherwise.
Overall, this is a book that maintains its promise to the reader. It’s comprehensive, so you’ll find everything you need to know about business strategy.
For sure, I learned a lot, even if I can only partially apply what I learned because I’m a solo business owner with no collaborators.
I recommend Business Strategy Essentials You Always Wanted to Know to leaders and owners of businesses of any size.
→ Feel free to read my other book reviews.