In earlier articles we have described the basic fundamentals of a business strategy. The absolute minimum, we said, is that the strategy contains description of, and gives clarity on, four different dimensions. First of all the strategy should give clarity on the offerings, hence what is the company actually bringing to the market. The second dimension is about the segments, hence to whom is the company brining its offerings. The third dimensions should describe what makes the company unique, basically why the customers should buy the companies products rather than the ones of the competitor. The fourth, and final, dimension should give clarity on how the company is planning to make money, hence the business model.
Based on this basic definition of the key dimension in a business strategy we went through all of the publicly listed large cap companies on OMX/NASDAQ to see whether they had clearly defined these dimensions. Some of the companies of course choose not to communicate their strategy externally at all, which of course is perfectly acceptable. The assessment, and the statistics below, is only based on the companies that actually choose to communicate their business strategy externally.
36% of the companies that communicated their strategy externally did not adress any of the four different key dimensions in a business strategy, and only 7% of the companies managed to articulate all of the four different dimensions.
Furthermore, we also assessed the differences between different verticals. Turns out that there are some great differences between the different verticals, where the companies classified as telecommunication companies came out as best in class. Interesting also to notice that there were some great differences between the four different dimensions where clearly most of the companies had missed the opportunity to articulate their business model.