You might be an entrepreneur, a strategist, a growth hacker or a product manager, strategy is something you can’t separate from the daily workings and decisions made.
As an entrepreneur one might want to understand how to build the business, how well it aligns with the values and the vision set for the organization. Whereas for product managers it might help them understand how to build a product, the user stories, and help understand the entire eco-system to create a product which is loved by customers, solves their problems and brings revenue to the company.
I believe, rather than just jumping to the model suggested by Hambrick and Fredrickson in the paper, ‘Are you sure you have a strategy’, it’s important to understand their thinking behind building this model. Strategy, as a concept has been a difficult one to understand.
The word, ‘Strategy’ is derived from the Greek word Strategos (“The art of the General”). The decision-makers are, the paper suggests, similar to the General who have in them the responsibility to be concise, precise and whole in the communication & plan they make. They suggest, not everything has to be thrown into the strategy bucket. If everything important is thrown into the strategy bucket, then this essential concept quickly comes to mean nothing(Hambrick & Fredrickson).
Strategic model should not be a linear process of leading steps but instead, a robust, feedback-driven model which involves iterative thinking and reinforcement of the different elements of strategy.
Following is the Model suggested :
There are different parts of strategy and each part is associated with simple yet important questions which define its scope.
- Arenas: where will we be active?
Be as specific as you can when you define the Arenas. The insight should be at the level of what kind of product categories, market segments, geographies, technologies and other value-added stages we intend to take.
2. Vehicles: how will we get there?
This is basically the means to attain the arenas you define in the first step. In case of product expansion, how will we go, is it going to be organic or inorganic?
3. Differentiators: how will we win in the marketplace?
This doesn’t mean we have to be at extreme ends to create differentiation among competitors. Instead, the best combination of different differentiators can create a market advantage.
4. Staging: What will be our speed and sequence of moves?
Above three were the decisions on what the managers plan to do. This is the steps to increase the likelihood of success. This doesn’t mean among the things defined in the previous stages are more important than others but instead, we want to process our work in a way that every part work in right symphony.
5. Economic logic: how will we obtain our returns?
A central economic logic should be created which drives profit generation. People try to focus on certain things like more revenue than cost, etc. but it’s the clarity of defining our economic logic which is of importance.
Reference : Are you sure you have a strategy?, Donald C. Hambrick and James W, Fredrickson ( Academy of Management Executive, 2001. Vol. 15, №4)
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