By: Verne Harnish

Every year, since it launched in 1984, pundits have been predicting the demise of RIM, the famous makers of the BlackBerry – most recently given the success of the iPhone.

Yet for all the attention Apple and the iPhone receive, the Blackberry Curve is the best selling smart phone in the US in 2009 – and RIM, the famous maker of the BlackBerry line of mobile devices, has 56 per cent market share, up 15 per cent over last year while Apple has lost 10 per cent. This Canadian firm is also the fastest growing public company in the US according to Fortune Magazine’s recent list.

still remember Jim Balsillie, co-founder of RIM, sharing with a group of us that “if you can’t state your strategy in a sentence, you don’t have one!!” And RIM’s? In essence, “Easy in, impossible out”. RIM makes it very easy for corporations to install their e-mail system, but because the way the proprietary RIM software and servers work, it’s almost impossible to extract – or at least a huge hassle. So even though a whole host of executives may love to get iPhones, there’s too much inertia to overcome for enterprises to switch, a market in which RIM commands a whopping 74 per cent market share.

And the software and server side of the business commands 90 per cent plus gross margins given the fees carriers pay RIM per customer for the ability to collect, in turn, data transmission fees. It’s these huge margins that dwarf the margins pure handset manufacturers earn fuelling RIM’s continued market domination.

Though I’ve preached for years the importance of a one-page strategic plan, let me suggest that a precise “one-phrase strategic plan” must be the starting point.

Also defying gravity has been Southwest Airlines 38-year run. Today Southwest is the largest airline in the world in terms of number of passengers.

For Southwest, their one-phrase strategic focus is also an internal tagline – “Wheels Up.” If that expensive hunk of metal is in the air more than the competition, then they are going to make more money.

Though different than their more well-known “low fare” Brand Promise, this one-phrase strategy underpins Southwest’s unique ability to keep their promise versus the rest of their low-priced competitors. And this is why the one-phrase strategy is such a critical competitive decision.

Think of the one-phrase strategic statement as the focus for the underlying activities that differentiate your company from your competition. The key word is activities. As Michael Porter, Harvard’s famous strategy guru, emphasises in his classic 1996 Harvard Business Review article it’s going about the business in a different way than your competitors that defines your strategy.

In Southwest’s case, no advanced reservation seating and using the same aircraft type for all routes are two key differentiating activities. And by choosing activities that are impossible or difficult for others to adopt, you maintain your competitive advantage. One of the few successful IPOs this decade, Rackspace has built its business on a simple one-phrase strategy “it’s not about the servers, it’s about the support.”

Pegasystems has also nailed its one-phrase strategy, a strategy Alan Trefler, founder and CEO, has been pursuing since 1983. Captured in their tagline Built for Change, Pegasystems makes it easy for business managers to change the software underlying their systems. In all four cases, the companies have relentlessly focused on their one-phrase strategy And in the process have driven significant growth and dominated their industries.

Bookmark It

Hide Sites