Business strategy is often ignored until there is a problem. For example, a loss in product sales, declining profit margins, or a new competitor shows up. Until then, we often rely on weak strategy substitutes like having a compelling vision or ambitious goals.
Of course, there is nothing wrong with creating a vision for the future or establishing goals. However, it’s a mistake to treat these things as strategies because doing so can prevent us from pursuing the real thing. As a result, we can find ourselves without a deep understanding of the challenges we face or the opportunities worth pursuing.
So, let’s explore six of the best business strategy books that you can read when building an effective plan for success. They cover critical themes, including:
- How to make the competition irrelevant
- How to avoid being disrupted by innovative startups
- How to increase profits by creating a competitive advantage
- How to sell disruptive products to mainstream customers
- The difference between a good strategy and a bad strategy
- Tips for turning a good company into a great company
I recommend that you familiarize yourself with each of the books in this list so that you can identify one or two that you feel are most relevant to your business today.
1. Blue Ocean Strategy by W. Chan Kim & Renée Mauborgne
Many businesses fall into the trap of obsessing about their competition. As a result, they try to win over the same customers with a similar product and an undifferentiated strategy. Unfortunately, this approach leads to cutthroat competition that destroys profit margins and limits future business growth.
Blue Ocean Strategy can help you avoid this fate by making the competition irrelevant. It explains how to create and capture new demand, break the value/cost trade-off, and redefine market boundaries to create a leap in value for buyers. It’s a must-read for business leaders that want to create or sustain healthy profit margins.
2. The Innovator’s Dilemma by Clayton Christensen
It’s no secret that businesses often fail in the face of disruptive innovation. However, what’s surprising is that this outcome is not necessarily due to bureaucracy, arrogance, poor planning, or short-term investments like many may suspect. Instead, it’s often the strengths of well-managed, customer-driven businesses that cause them to fail.
The Innovator’s Dilemma explains how a relentless focus on serving customer needs can cause a great business to be overtaken by an innovative startup. Most important of all, it explores practical strategies for avoiding disruption. So, it’s a must-read for the leaders of well-established businesses as well as founders of disruptive startups.
3. Understanding Michael Porter by Joan Magretta
The goal of a great company is to earn profits, not to take business away from rivals. Yet, even if you’re focused on creating value and profit, you will inevitably face competitors that try to emulate your success and eat into your margins. So, it’s critical to understand how to deal with competitors so you can maintain healthy profits.
Understanding Michael Porter is a practical guide to Michael Porter’s best business strategy advice. It explores how to create a competitive advantage, sustain healthy profit margins, and ultimately deal with competition. The book can help you create a strategy for building and sustaining profitability in a competitive market.
4. Crossing The Chasm by Geoffrey A. Moore
Many innovative businesses fail to attract a mainstream audience to their product or service. They build initial momentum with enthusiastic early adopters but are unable to win over the broader, more lucrative mainstream market. As a result, they severely limit future business growth and fail to capture the full profit potential of what they’ve built.
Crossing The Chasm explains how to market disruptive products to a mainstream audience. The insights apply to any product or service that requires customers to change their habits or behaviors to use it. So, if your solution breaks with industry norms or challenges the status quo, this is a must-read book for you.
5. Good Strategy / Bad Strategy by Richard Rumelt
Many business leaders fail to establish an effective plan for their organization. They mistake the process of defining a bold vision or setting ambitious goals with creating a business strategy. As a result, they never identify the true challenges they face and have no concrete plans for dealing with them.
Good Strategy / Bad Strategy can help you craft an effective plan. One that takes advantage of your organization’s strengths and your rival’s weaknesses to create a competitive edge. And, by demonstrating the difference between good and bad strategies, the book makes it easier to avoid common mistakes along the way.
6. Good To Great by Jim Collins
Every once and a while, a relatively average company makes the leap from good results to great results. In some cases, they do so independently of industry trends or other factors that might help explain their sudden success. So, this phenomenon begs the question, “How can a good company become a great company?”
Good To Great explains why some companies make the leap and others do not. It explores six powerful concepts identified during a comprehensive study of companies that had made a good-to-great transformation. And the book makes each of the insights accessible for others looking to achieve similar results.
Other Great Books For Business Leaders To Read
After learning about business strategy, you may be interested in other business topics, including leadership, product development, or marketing. So, when you finish reading some of the best business strategy books, consider reviewing my other reading lists.