Chances are if your answer is – “we want to to be the best at.., we want to be global, we want to grow revenue and profits”, you may not have a strategy.
Over the years, experts have created an abundance of frameworks that help design and analyse strategy. However, these experts are yet to agree on what the definition of strategy actually is. At the moment, strategy seems to loosely encompass every aspect of an organization. At the moment, strategy seems to mean whatever one wants it to mean. Inevitably, businesses have started to call everything strategy, leading to an amalgamated confusion.
To us, strategy simply means ‘how do we win in the period ahead’. Its always about what competitive advantage can we build on that ensures growth or survival.
At Falak, we do have a few strategy models we use to arrive at directions customers should take to gain the edge. These include Blue Ocean for differentiation, the Seven S for organization design, BCG matrix for SBU strategy, etc.
One of our favourites is the Hambrick and Fredrickson's Strategy Diamond. Its simple, its universal and, most importantly, it clearly defines what elements constitute strategy. Below is a bird’s eye view of elements that constitute the framework.
A lot of academicians and even business owners argue that strategy is a bygone concept. In an era of uncertainty, doesn’t defining a direction for the future seem fruitless. Also, isn’t strategy supposed to be part of usual planning. Well, these misconceptions can be cleared by understanding what strategy is and isn’t.
Strategy can be flexible and can change fairly rapidly in response to environmental dynamics. Additionally, strategy is not only about planning, it’s about making informed and planned choices.
This article hopes to be able to help define what constitutes strategy. Just knowing what decisions can help define strategy is not enough, businesses don’t just need to define their strategy, they need to ensure that it is sound and well thought out. In our experience, a detailed study of the above model, can lend a hand in getting most of the choices right.
One of my favourites is from a former client that I loved working with, Walmart. Walmart’s strategy is not to be in every country in every nook corner. Interestingly enough, their strategy is to provide cheaper products in comparison to their competition. This they manage by constantly monitoring and innovating their supply chain.
This reiterates to us, that a good strategy is one that clearly defines your competitive advantage and defines how you make use of it.
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