Good strategy is a design that coordinates actions of all the different areas and functions of a corporation and focuses on leveraging the firm’s advantage, that also has coherent action. The kernel of good strategy is comprised of Clear and careful diagnosis of the problem to simplify the complexity of the problem, insightful and compelling guiding policy, the overall approach to solve the problem, and a set of coherent actions to achieve the guiding policy. A strategy is an integrated, overarching, externally oriented concept of how a firm will achieve its objectives. Strategy answers the ‘how’, while the mission statement should answer the ‘why’.
Strategizing and Strategic Logic
The first question strategists should ask is what is the firm trying to do? What do they want to do? From there, it’s important to identify the key sources of success (BTW – A lower price is not a sustainable competitive advantage. It has to be backed up with a sustainable cost structure to be sustainable).
Strategic Logic should account for:
- Identifying key advantages
- Test advantages
- Identifying threats to advantages
- How can we leverage and exploit our advantages for improved growth and profitability