Strategy is ...
Strategy is choices. It is choices on the playing field and how to win on the selected field. Strategy is letting go of trying to be everything for everyone. For when you have choices, then you can have focus. When you have focus, then you can be exceptional.?
Strategy is a theory - theory in the sense that “if we are like this, then good things will happen.” It is about imagination and the future that has not yet happened. But it is also about today in selecting the forces at play that matter the most. Strategy is not about being omniscient. Strategy is about discovery of something that sets you apart from your rivals.?
Strategy is differentiation. It is an act of deliberately giving yourself an edge over the other services on the market. It is about positioning yourself as different than competition. You can do this with price (lower) or with differing outcomes (better in the selected ways). And I mean customer outcomes. That the outcomes your services provide to the customer differ in some significant way. The customer ultimately decides if your strategy works.?
Strategy is being on the right market and aiming to win with the right customers. The smart strategists create new markets and redefine the rules of the existing markets. When you play our own game, the chances of winning are higher. Some markets are highly competitive and red with of the blood of companies eaten alive by competition. Strategy is swimming away from the pack and finding your blue ocean where nobody else is swimming.?
Strategy is competitive advantage. That you consistently show up and often win. Usain Bolt did not won all his races. But when he showed up, we could be quite sure he could win the race. Usain had sustainable competitive advantage.?
Strategy is focus and projecting force. Like Usain, the way is to focus on something narrow enough to that you can project enough force to leap ahead of the usual performance. Usain focused on short distances and he was not trying to win the mile race. He focused at being the fastest so he developed fast muscles. Those fast muscles in turn created exceptional outcomes - but only on short distances.?
Strategy is doing the right exercises and then building the right capabilities. Strategy is deliberate over-investment on the areas of differentiation. Strategy is spending much more on those capabilities that make up the difference. But you cannot do over-investment into everything. Strategy is making the trade-offs between table-stakes (where you just do the bare minimum to get into the game) and your differentiated capabilities.
Strategy is having your resources and the value chain tuned to create those exceptional outcomes for the customers. By doing the right actions and investments consistently - like a top athlete - you develop your strengths. Those strengths are directional - they push you all the time toward your differentiation.?
Strategy is understanding of forces and contexts. It is understanding customers and their preferences over time. It understanding of the how performance works on your selected field so that you can do much more than the average company can do. Strategy is the courage to make choices on what factors matter most and what can be defocused.?
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Strategy is understanding that over time all of these things can be built. Strategy is then twisting the five forces: 1 you make it very hard to enter the game, 2) you leave little bargaining power to customers, 3)you dampen the bargaining power of your suppliers, 4) you compete where there is little rivalry between companies and 5) you erect barriers to entry to these markets. Your strategy is your castle and your right actions build an incredible moat around your castle.?
Strategy is often unintuitive and hard. The discovery of strategy is more an act of intuition than linear deduction. Strategy is frustrating that not everything that some customer wants is strategic. It is frustrating that not all your capabilities that you could build should be built. Not all revenue that you get is good revenue. Strategy exists on another thinking plane to our conventional thinking. More is not always better in strategy.?
Strategy is continuous and additive. It goes from a hunch to something that provenly sets you apart from others. Strategy is the large set of integrated answers to complex forces at play over time. Strategy is born out of grappling with very hard dilemmas. It is grounded in realities of the world and the world is complex. There is no single “aha” in strategy - but a deliberate refinement over time.?
Strategy is: When your selected customers look at your service then the customers have high odds of buying exactly your service. The outcome is winning over the customers repeatedly.?
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PS: See also some of the earlier articles on strategy