2by2 publishes Insights on Strategy to help companies improve their ability to create value through strategy by better understanding what strategy actually is, by learning how to spot the difference between a good strategy and a not-so-good strategy, and by gaining perspectives on the most common pitfalls when developing a strategy.
The insights have been published and distributed since 2010. In order to make the articles even more available we here publish the 10 key insights in one post, it spans everything from the basic definition of strategy to a review of the history of strategy.
1. A definition
Ultimately, strategy is about choice. It is about choosing the company you want to be by choosing which market you want to play in and choosing how to compete in that market. A company that formulates its strategy effectively can reap great benefits, since a good strategy is sure to deliver bottom-line results. Those companies that are not so effective will, in the best-case scenario, end-up with a fancy slogan that marketing can use in just any corporate campaign and in the worst case, simply go out of business.
Strategy can be defined through a simple statement: “A company’s choice of competitive edge in the market.”
2. Competitive advantage
When formulating a strategy, one of the most important choices is to do with competitive advantage. Essentially, this is about clearly articulating why you will be better than your competition; in other words, why consumers will buy your products and services rather than those of your competitor.
Seven generic sources of competitive advantage are worth exploring, and they can typically be divided into three groups: product differentiation, feature differentiation, and game changers.
3. The strategy context
Strategy does not exist in isolation, nor can it be developed or realized in isolation. In order to successfully leverage strategy as a mean for driving profitable growth, it is important to understand the context in which strategy must exist. Based on our experience, the context of strategy also creates confusion with regard to the concept of strategy, which makes it even more important to understand. This insight on Strategy specifically intends to digest the strategy context and examine all of its components.
4. The good strategy
In today’s competitive business environment, having a well thought out strategy is instrumental for surviving and for achieving profitable growth. Realizing a strategy can sometimes be challenging and is likely to require the full attention of a company’s executive management over a long period of time. However, our experience tells us that even developing a good strategy often poses a challenge to companies.
Learning to recognize a good strategy is a pre-requisite for being able to develop one of your own. In this Insight on Strategy, therefore, we will share our perspectives on the five hallmarks of a good strategy.
5. Strategy pitfalls
Strategy is often at the top of the agenda of CEOs and board members across the business community. Strategy is often seen as a lever to improve the competitiveness of the company and, ultimately, the return of shareholders’ investments in the enterprise. However, based on our experiences, despite attention from the board, the CEO and executive management, strategy often fails to deliver on its promises. We believe the link between strategy and its impact on bottom line results should be clear and direct, yet few are able to demonstrate this. This often causes significant frustration and, in some cases, even leads executive management to conclude that the concept of strategy is bogus.
We strongly believe that thoroughly thinking through and realizing a strategy is instrumental for every company. Through our practice, we have had the opportunity to observe strategy efforts in many different companies representing several different industries. There are typically five issues that seem to constantly reoccur and these may explain what causes a strategy to fail.
6. The strategy development process
Many people believe that one of the key challenges with strategy is actually figuring out the right way to develop it. The approach and process that you choose will more than likely have an impact on the end result. Consequently, at 2by2 we pay close attention not only to the end result, but also the way to get there.
In this Insight on Strategy, we would like to share our perspective on the process of developing a viable strategy that can help grow your business and yield better results. Although there is no single strategy development process best practice, the principles we will share in this article have been proven to work in several assignments in which 2by2 has helped companies develop comprehensive business strategies.
7. The strategy development team
Strategy is one of the most ambiguous terms in business today. At 2by2, we believe that strategy is one of the most important and powerful business concepts that you can leverage in order to secure continued profitable growth for your company. One of the key challenges with strategy is to think through the right approach to developing it. In this Insight on Strategy, we share our view of how to best compose the team that will be responsible for developing your strategy.
8. Business planning
Business planning is a core activity for any professionally run business. If handled well, it should result in a comprehensive business plan that enables the company to operate both efficiently and effectively. However, it is important to realize how the business plan in any company should relate to the overarching strategy. In this Insight on Strategy, we will share our perspective on how to conduct business planning effectively and how your business plan should relate to your chosen strategy.
9. Strategy realization
The result of a well-articulated strategy should be visible in your company’s balance sheet and/or income statement. A strategy that does not result in concrete business results is useless. This philosophy is what we are referring to when we talk about value through strategy – concrete value delivered through a clearly articulated strategy.
However, in order to make this happen, you cannot stop once you have finalized the definition of your strategy. Thorough and complete realization of your strategy is the key to enabling value through strategy, and this is the point at which the strategy usually fails, for various reasons. In this Insight on Strategy, we focus on the realization efforts; that is, all the things that need to happen once the strategy has been defined. We will share our perspective on the basic prerequisites, but also discuss what typically goes wrong.
10. The history of strategy
Strategy is not a new phenomenon; it has been around for some time and will likely remain a key concern for business executives as long as competitive markets exist. In this Insight on Strategy, we will take a brief look at the history of strategy to help us understand the context and key concepts. In addition, we will share our own, very personal perspective, on the future of strategy.
It is entirely possible to write long books about the history of strategy, an interesting and broad topic. We will structure this brief article around the key milestones that underlie the development of modern business strategy.
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