Great strategies answer five critical questions (“the strategic five”) in ways that are unique to your company: (1) What business or businesses should your company be in? (2) How should you add value to your businesses? (3) Who should be the target customers for your businesses? (4) What should be your value propositions to those target customers? (5) What capabilities should differentiate your ability to add value to your businesses and deliver their value propositions?
You won’t find the answers to these questions in most strategy concepts. Consider total quality management (TQM), a prescription for reducing cost by minimizing error. TQM is mostly silent on what kind of businesses should be in your portfolio and why, or who your target customers should be and why they’re glad your company exists. It is also a dangerously narrow prescription for what you have to be better at doing than anyone else to achieve and sustain great success.
Instead of asking “Should we adopt TQM?” leaders should ask “How can TQM improve our answers to the strategic five?” A company such as Danaher, which actively seeks to add operational value to each business in its portfolio, would have an answer very different from those of Berkshire Hathaway or IKEA, because the three companies have different strategies for adding value to their businesses. Furthermore, because these companies can answer each of the strategic five questions with precision, they can be disciplined about whether they use TQM and, if so, how. In other words, their strategies are not just unique and specific, but also complete. This enables them to get the most out of strategy concepts without becoming hostage to them.
Great strategies answer five critical questions (“the strategic five”) in ways that are unique to your company: (1) What business or businesses should your company be in? (2) How should you add value to your businesses? (3) Who should be the target customers for your businesses? (4) What should be your value ...
Summary : There are only five business strategies: cost, quality, distribution, technology, and intellectual property (IP). All business strategies break down into these five, or some combination of them. As a general principle, focusing your organization on one is the easiest to execute.
In our terms, a strategy is a coordinated and integrated set of five choices: a winning aspiration, where to play, how to win, core capabilities, and management systems. … The five choices make up the strategic choice cascade, the foundation of our strategy work and the core of this book.
These five elements of strategy include Arenas, Differentiators, Vehicles, Staging, and Economic Logic. This model was developed by strategy researchers Donald Hambrick and James Fredrickson.
Introduction: My name is Barbera Armstrong, I am a lovely, delightful, cooperative, funny, enchanting, vivacious, tender person who loves writing and wants to share my knowledge and understanding with you.
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