Strategy is fundamentally about making choices over where and on what basis to compete. This in turn should reflect your sources of current (or potential) competitive advantage, and your anticipation of likely market developments.

Your strategy should reflect your unique combination of target market segments and customer propositions that play to your sources of competitive advantage.

In most mid-size or above companies, strategic choices have to be made at two levels – at the business unit level, and at the overall corporate level. For smaller businesses without the complications of multiple business units, it may be sufficient to focus on business unit strategy.

A key enabler of effective strategy is clarity around the core competencies of the organisation. The leveraging of core competencies at the corporate and business unit level enables the creation of sources of competitive advantage.

Business strategy comprises competitive strategy and enabling strategy.

Competitive strategy is concerned with the fundamental decisions on where and on what basis to compete. It consists of the Participation Strategy and the Positioning of the business.

Participation strategy is about defining which segments to compete in. And as importantly (if not more so), defining which segments not to compete in. Markets are not homogenous – they are a collection of partially overlapping segments. Each segment will have differences e.g. in customer demographics and preferences, competitive landscape, geography, product specifications. Participation strategy is about selecting those segments that best play to your strengths.

Positioning strategy is about deciding the basis on which you will compete in your chosen market segments. Are you a cost leader? Do you have specific product design or R&D capabilities that you can position around? Or are you strengths more in reliability and consistency.

Your positioning and participation strategies should reinforce each other. Through your positioning, you should create points of differentiation in areas that matter to customers in your target segments. And your positioning should be built on the inherent advantages that you have over competitors.

Enabling Strategy is about how you develop and deploy your internal resources to deliver on your competitive strategy

Customer Strategy is the lifeblood of any business – acquiring new customers, retaining them, and maximising their value to you. This is about understanding the customer journey in your chosen segments. And then defining the right combination of channel, marketing and sales strategies to maintain a healthy flow of valuable customers that align with your competitive strategy

The Operating Model is about how you deliver on your value proposition. How scalable are your processes and systems? Does your operating model give you an advantage in cost? Or quality? Does it align fully with your competitive strategy?

Corporate strategy involves defining your Corporate Model i.e. what strengths do you have as a corporate, and what kind of businesses would be a good fit with that.

You also need to define the role of the corporate vs the business units. Do the business units operate largely autonomously, or do you consolidate many functions centrally for economics of scale? There are costs to too much central oversight in terms of less flexibility to the market. Clarification of the corporate model and consideration of trade-offs is therefore another good topic for the workshop.

Once you are clear on your corporate model, you can then review your Portfolio Strategy. Are your current divisions a good fit for your corporate model? Or would you be better off divesting non-core areas to create a more aligned and focused structure? Through your portfolio strategy you may also identify opportunities for targeted M&A to bring in additional divisions that are a strong fit with the corporate model.

Your Core Competencies are your distinct advantages that enable your business and corporate strategy.

They are the resources, assets and know-how that are difficult for your competitors to copy. For example, you might have established distribution channels that you have built up over time that make it hard for competitors to access your target market segments. Understanding your core capabilities, and deciding where to invest further to drive even more competitive advantage, is critical to success strategy development.

We provide a range of strategy development services for our clients, ranging from one-off strategy workshops through to support for full strategy development processes and on-going support.

Get in touch with us for a complementary 30 min strategy blueprint discussion. During the session, we will review your current strategy process and identify near-term strategic opportunities.