Where do you want to be Number 1? Why?

Company goals to become Number 1 are frequently set with bravado, as a vague long term statement of intent. Your goal could drive the strategy more powerfully if it was grounded in a deep understanding of the key economies of scale in your industry.

You see it in so many Annual Reports. “Our strategy is to beAsia’s leading X” (you fill in the blank). It satisfies the macho instinct in all of us – who doesn’t want to be Top Dog?

To be a meaningful goal, Number 1 has to be specific. To be leading in reputation or the largest? The largest in every country, or the largest in total? The largest on what metric? Employees? Revenues? Or, dare we suggest it, profitability? Or the ultimate in non-specificity, largest on all metrics in all markets?

Beyond its chest-thumping credentials lies a very useful question. Where do we want to be Number 1? Or to rephrase this, where would being Number 1 bring us the biggest economic advantage over competitors?

Ask yourself what sort of leadership will provide competitive advantage. What scale advantages cross borders in a meaningful way? Within a country, does total size matter, or are the advantages of scale concentrated in leadership of specific channels, customer segments or product lines? If geographic scale is important, is leadership more important at the national, regional or city level?

Most businesses have certain dimensions of scale that create far more competitive advantage than others. If it is based on deep insights into how economies of scale operate in your business, your goal to be the largest X will be an integral part of your strategy, not just for bragging rights.

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