The Process of Defining Business Purpose

The whole purpose of asking the question “What business are we really in?” is to identify a explicit definition that will allow you to maximise the impact of your company’s capabilities relative to those of your competitors. This means that the right definition for your business is therefore one that suits your company better than it does your competitors.

The important thing is consider the implications of a definition, assess what tactics should be adopted if you were to redefine, consider whether your core competence will allow you to carry out these tactics, and so on.

There are no schools of thought on how to define a business.  As we have seen, companies define their business by the products they were selling. Thus the Hilton is in hotels, British Airways in the aeroplane business and ICI was in the paint.

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