By Roger Gudobba
Think about these two questions for a minute: What is your Competitive Strategy? What direction is it taking you?
The question is ‘What is Strategy’? A recent article in Strategy + Business described it this way:“Strategy is different from vision, mission, goals, priorities and plans. It is the result of choices executives make, on where to play and how to win, to maximize long-term value. It goes on to say to define the fundamentals of your business strategy you need only to answer three questions.
1. Who is your target customer?
2. What is the value proposition to that customer?
3. What are the essential capabilities needed to deliver that value proposition?
Without clear and coherent answers to these three questions, you may have an exciting vision, a compelling mission, clear goals, and an ambitious strategic plan with many actions under way, but you won’t have a strategy.”
Competitive strategy has a narrower scope than business strategy. Business strategy not only concerns the issue of how to compete, but also embraces functional area strategies, how management plans to respond to changing industry conditions of all kinds (not just those that are competition-related), and how management intends to address the full range of strategic issues confronting the business.
Why do you need a clear strategy? As the creation of knowledge became more accessible, the information that was exclusive to incumbents became available to all. This has put pressure on companies to have clear strategies. Unless companies have a clear vision about how they are going to be distinctly different and unique from their competitors in offering something different to their customers, they are going to get eaten by the competition.
Read the full article: Competitive Strategy