What is Strategy?
Strategy is really about choices, and they define strategy simply as “an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.”“It is only through making and acting on choices that you can win,” they write. “Yes, clear, tough choices force your hand and confine you to a path. But they also free you to focus on what matters.
What matters is winning. Great organizations—whether companies, not-for-profits, political organizations, agencies, what have you—choose to win rather than simply play.”
At the heart of strategy lie two key choices:
1. Where to play?
Once you are clear on the goals, aspirations and purpose of your enterprise—the value you bring, why you exist and the problem you solve for the world—you must choose a playing field that allows you to achieve those aims.
Answering the “where to play” question helps narrow the competitive field and focuses on where your company will compete. It encompasses markets, customers and consumers, channels, product categories and vertical stages of your chosen industry.
2. How to win?
While answering the “Where to play” question selects the playing field, the “How to win” question defines the choices for winning on that field.
“It is the recipe for success,” the authors write. “The how-to-win choice is intimately tied to the where-to-play choice. Remember, it is not how to win generally, but how to win within the chosen where-to-play domains.”
To determine how to win, you must decide what will enable your company to create unique value and sustainably deliver that value to customers in a way that is distinct from the firm’s competitors.
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