At 2by2, our primary focus is strategy development, assessment and realization; this has been our core since 2by2 was founded in 2010. One thing we realized early on was that the definition of strategy as a business practice is very ambiguous; every executive basically has their own definition. From the start, we have published Insights on Strategy as a means of sharing our own perspective on strategy: the definition, the process of it, how to find your competitive edge, etc.
At 2by2 we are proud to say that we view every single case as unique; we strongly believe that no one solution fits all. This is especially true when it comes to business strategy, which aims to position a company uniquely in the market. Consequently, we never recommend a ready-made strategy, but instead work in a tailored process to find the right strategy for a specific company, in a specific market, in a specific period of time.
As a starting point with all clients, we leverage our own strategy framework: VOSEB.
VOSEB: Vision – Offerings – Segments – Edge – Business
The VOSEB framework captures the latest theoretical ideas in the field, as well as our own practical experiences working with strategy. It describes the five basic components that need to be represented in any well-articulated, comprehensive corporate strategy. A corporate strategy that lacks any of these simply leaves key questions unanswered. Value through strategy is achieved when all components are well articulated and fully in sync with each other.
V: Vision and Targets
Overall vision and targets for the company need to be clearly articulated. The vision should express its aspirations; what kind of company does it want to be? Overall high-level targets should be defined. Vision and targets should help employees, customers, partners and other stakeholders clearly understand what the company is about. This means the vision should be more than just nice words; it needs to be brief but meaningful, rather than lengthy and nice. Your targets should be expressed as concretely as possible.
The offerings description should make it absolutely clear what the company is bringing to the market, be it a product, a service or a combination of both. It should also clearly articulate what customers’ needs that are actually adressed.
S: Segments and Customers
A well-articulated strategy needs to answer the question what segments the company is trying to win in. It is fine to have bold ambitions and strive to conquer the world, but even world dominance is usually achieved step by step. Segments and customers articulate in which geographies the company is competing, perhaps narrowing it down to specific verticals in the market, if we are talking about B2B. It is also about deciding which customers/customer segments the company is choosing to target.
E: Competitive Edge
This is your unambiguous choice of uniqueness, clarifying why customers choose your company’s products/services rather than your competitors’. Sources of competitive advantages need to be fully understood as they can vary between industries. At 2by2 we have identified seven different generic sources of competitive advantages that might apply to your industry: product, product bundle, cost, service, brand, quality and business model. Select one key competitive edge; few companies successfully manage to compete with multiple advantages.
B: Business Model
Decide how the company should earn money from its products/services. This is about thoroughly understanding the logic of the business and how money flows, plus making your mind up on what your business model should look like. Who in the value chain is really paying for your products and services, and what is the basis of your business model; is it what you actually deliver, what the customer consumes, is it based on customer benefits, or do you have other factors on which to base your business model?
Traits of a powerful corporate strategy
A corporate strategy can be the key to successfully enabling profitable growth; we have seen it in practice in many clients we have worked with. To make it happen, we strongly believe that the five components described in the simple VOSEB framework need to be well defined and clearly articulated for the company. In addition, they all need to fit together and pull in the same direction. That’s when you are able to truly get value through strategy.