What is Strategy?

Strategy is a company’s master plan to win. It is a set of goal-directed actions designed to outperform rivals and achieve superior performance.

Why do we need a Strategy?

Without a master plan, an organization is simply reacting to the market. Strategy allows a firm to make deliberate choices about what to do and—more importantly—what not to do. This focus is the only way to gain a sustainable edge.

Disruptive Pricing

Sam Walton (Walmart): Chose to compete on scale and efficiency to offer the lowest prices to the masses.

Ecosystem Design

Steve Jobs (Apple): Chose to “put a ding in the universe” by creating highly integrated, beautifully designed user experiences.

The Strategy Equation

$Strategy = Gaining + Sustaining \ Competitive \ Advantage$
01

Competitive Advantage:

Superior performance relative to competitors or the industry average.

02

Sustainable Advantage:

Outperforming the market over a prolonged period of time.

03

Competitive Parity:

Firms performing at the same level; no one has a distinct edge.

The Three Strategic Pillars

1

Diagnosis: A clear identification of the competitive challenge.
2

Guiding Policy: A unique approach developed to address the diagnosis.
3

Coherent Actions: Coordinated steps taken to implement the guiding policy.

Strategy Red Flags

Avoid these common misconceptions to ensure your master plan is valid:

🚫 Grandiose Statements: “We will be the best” is a wish, not a strategy.
🚫 Ignoring the Challenge: Failure to address rivals is a recipe for disruption.
🚫 Operational Effectiveness: Doing things better than rivals is not strategy; doing things differently is.

“Concrete action is the only proof of strategy.”

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