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What is Strategy Anyway?

Oct 14, 2015 5:16 PM
1 Comment

Research highlights that market leadership is achieved when businesses increase their focus in line with some dimension of customer value (i.e. price, quality, customization) versus focusing broadly in a market. Focus enables corporations to differentiate themselves and build powerful business systems that drive superior business results.

The implication of this research is that business strategy is more important than ever, yet there is considerable skepticism about its value.

This skepticism is the natural result of ineffectual approaches to strategic planning that reduce business strategy into detailed lists of action plans.

The strategic planning process should elevate strategic thinking to identify opportunities to bridge gaps in the market, assess existing business portfolio, gaps in present structure, and capability to deliver.

The planning component of strategic planning should apply to the prioritization of strategic objectives and forecast of a financial plan to ensure investments support initiatives and are monitored for profitability and return on investment.

For large organizations with a divisional structure,  business strategy is conducted in two waves. First, at the level of the corporation,  to focus your business and structure; and then, at the level of the business unit,  to focus value creation.

When business strategy is approached this way, it becomes an invaluable tool for leaders to ensure their organizations remain innovative and relevant.

Business Strategy: At the Level of the Corporation

Business strategy is developed at the level of the corporation to focus your business on how it will create value in the market and to prioritize objectives and investments that will drive long-term profitability.  

It answers the big question: “What customer problem will we solve in a unique and distinctive way?” 

Strategic Assessment: Foundation of your Business Strategy

  • Answering this question is achieved through an assessment of several factors: the macro, long-term drivers of your industry upon your customer segmentation, attractiveness of each segment, and the understanding of your present position, performance and core competency.
  • This assessment yields powerful insights. It enables the development of your value proposition and highly informed decisions about the segments and portfolio of business you will focus on. It becomes the foundation of your business strategy and is essential to revisit and validate over time.
  • Customer segmentation is core to the development of your value proposition; however it also enables you to understand that you have different customer segments.
  • The implication is that if each customer segment is different, you must vary your approach to market and your operating model to serve each segment. 

Business strategy, then, becomes a tool to define your business structure.

  • Business strategy enables you to focus your business structure on value creation through the alignment of  leadership accountability, for the profitable growth of each customer segment via the creation of business units.

Business Strategy: At the level of a Business Unit

Once your leadership structure is clarified, then strategic planning can continue at the level of the business unit.

At the level of the business unit, strategy is concerned with innovation and design of the specific business system to solve your customers’ problems, and deliver a distinctive experience to every client, every time.

Innovation can occur at one or every part:  

  • Value Creation: The specific product or service you will bring to market
  • Value Delivery: How your business must operate to facilitate client attraction and retention
  • Value Management: How your business must operate to sustain value

Old school strategic planning, that reduces initiatives down into detail lists of action plans, drives failed business strategies.

Business strategy that is founded upon the strategic assessment of your industry, the alignment of your structure and the design of your business model, helps corporations grow, thrive and deliver unqiue customer experiences.     

Are you concerned about your upcoming strategic planning initiative?

Contact who will be glad to discuss how you can ensure your next strategic planning process stays on track.  

(Customer Intimacy and Other Value Disciplines; Michael Treacy; Fred Wiersema; From the January 1993 Issue, Harvard Business Review)

Joanne Downey

Throughout her extensive 25 year career, Ms. Downey has provided tangible value to CEO/Chairman/Executive Teams throughout the entire management structure of Global, Fortune 500 and leading companies. .


1 Comment

  Sep 12, 2016 18:03PM
sac ekim Merkezi

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