Resources and assets
Plant, capital, brand, installed base, data and intellectual property: what the company owns that a competitor would have to buy or build from nothing.
Line 01 / Strategy
Where to play, and what to change.
A rigorous, pragmatic approach to strategy development, worked from the commercial facts through to a position the executive can defend and the board can fund.
Definition
What is strategy.
Strategy is fundamentally about making choices over where and on what basis to compete. Those choices should follow from your sources of current or potential competitive advantage, and from a view on how the market is likely to develop.
Your strategy should reflect your own combination of target segments and customer propositions: the combination that plays to the advantages you actually hold, rather than the one the market leader holds.
In practice, most of the work sits in what you decide not to do. If a plan asks for no trade-off, it has not yet been tested against the capital and the people you actually have.
Competitive strategy is about being different, deliberately choosing a different set of activities to deliver a unique mix of value.
Michael Porter, Harvard Business School
A business strategy is a set of guiding principles that, when communicated and adopted in the organisation, generates a desired pattern of decision making.
Michael D. Watkins, IMD
Strategy has been practiced whenever an advantage was gained by planning the deployment of resources while accounting for the capabilities and behaviour of competition.
Bruce Henderson, founder of BCG
Framework
Choices at two levels, on one foundation.
In most mid-size and larger companies, choices have to be made at business unit level and at corporate level. Smaller businesses can usually stay with the first.
Level 01
Business strategy
Competitive strategy plus enabling strategy. The first decides where and how you compete; the second, how resources deliver on it.
01ParticipationWhich segments to compete in, and, as importantly, which not to. Markets are a collection of partially overlapping segments, not one homogenous whole.
02PositioningThe basis on which you compete in those segments (cost, design, reliability) built on advantages you genuinely hold over competitors.
03Customer strategyAcquisition, retention and value: the channel, marketing and sales combination that keeps valuable customers arriving.
04Operating modelHow the value proposition is delivered, and whether the processes and systems give you an advantage in cost or in quality.
Level 02
Corporate strategy
Where the centre earns its place. What the group is good at, how tightly it holds the units, and which businesses belong in it at all.
01Corporate advantageWhat strengths you hold as a corporate rather than as any one business, and which businesses are a genuine fit with them.
02Role of the centreAutonomous units, or functions consolidated centrally for scale? Too much central oversight costs flexibility. The trade-off is worth putting on the table explicitly.
03Portfolio strategyWhether the current divisions fit, what should be divested to create focus, and where targeted M&A would strengthen the whole.
Foundation, under both
Core competencies.
The resources, assets and know-how that competitors find difficult to copy, established distribution built up over years, for instance. Knowing them, and deciding where to invest further, is what makes the two levels above hold together.
Know-how
Technical and commercial expertise, held partly in people and partly in how the work is actually done. The harder half to acquire, and the easier half to lose.
Access and position
Distribution, licences, accreditations and long-standing relationships built up over years, and rarely available to a newer entrant at any sensible price.
Difficulty of copying
The test that decides the rest. A capability a competitor could assemble inside a year is a cost of entry, not an advantage worth building the strategy on.
Strategy services
Three offers under this line.
The same three offers that sit under Strategy in the register, from a board-level review through to one function taken apart.
01Corporate strategy
Board strategy, strategic reviews, workshops, strategic planning
A strategic review of the business and the papers that carry it to the board, with the workshops and planning around them run to the same clock.
02Value creation strategy
Enterprise-wide or function specific
The value creation plan, enterprise-wide or aimed at a single function, with the initiatives named, sized and sequenced rather than listed.
03Function-specific strategy
Pricing, customer lifetime value, marketing, IT
Where the leverage sits inside one function (pricing, customer lifetime value, marketing or IT) taken far enough to act on.
Starting a conversation
Schedule a call.
Most of our work begins with a short conversation with a principal about the question a client is weighing up. No obligation to take it further, and often useful either way.