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What Is Strategy And Strategic Positioning?

Strategy? It’s obvious what is strategy, isn’t it?

Perhaps not.

What is Strategy?

My personal definition of strategy is:

“Strategy is how you achieve your own objectives by winning the hearts, minds and business of customers by out-thinking and outmanoeuvring competitors.”

Professors Johnson and Scholes, authors of the MBA text Exploring Corporate Strategy say:

“Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations”.

Professor Henry Mintzberg from McGill University defines strategy as

“a pattern in a stream of decisions”.

He wanted to get away from the idea that to have a strategy, you have to do strategic planning or have a strategic plan. He argues that strategy emerges from decisions and actions rather than as a result of planning activities.

The Fit Between Positioning & Capabilities

Strategy is about providing a consistent match (or what is called strategic fit) between two words – your positioning and your capabilities.

Positioning is how you want the company to be seen from the outside and how it really is seen.

Positioning describes how your customers will see the company, how your competitors will see the company and how your company reacts and responds to all the external stakeholders.

Capabilities describes what your business is really good at and what special skills it is able to bring to the solving customer problems better than competitors.

The best strategies achieve fit like a perfect hand made glove.

Special and distinctive capabilities are used to create unique positions in the marketplace that give targeted customers an unbeatable combination of benefits for the price charged.

The Battle For Strategic Fit

It sounds easy but too often the emphasis is on operational effectiveness and efficiency rather than carving out unique space in the market by being different from all your competitors in ways that your targeted customers appreciate.

The big problem is that to achieve true strategic fit between your positioning and your capabilities, you have to make choices and choices are hard:

You have to decide what you are going to do so clearly that it rules out many things that you could do.

You have to decide who your target customers will be and who you will consciously avoid dealing with.

You have to decide how you are going to deliver your product or service so effectively and efficiently that you can avoid, beat or survive competition.

Michael Porter – “What Is Strategy?”

In a great article in Harvard Business Review called “What Is Strategy”, leading strategy guru Michael E. Porter explored these issues and looked at whether companies could straddle positions.

By straddling he meant, can a company occupy their own unique position while at the same time compete effectively in another position.

Michael Porter concluded that the only way a unique strategic position can be sustainable is if it forces competitors to make trade-offs with positions that they already held.

Here is a short video of Michael Porter emphasising that strategy is not to be confused with steps or actions. Strategy is the unique position and advantage that can be achieved.

Get To Know Me

Paul Simister is a business coach who helps business owners who are stuck or struggling with disappointing marketing, to get unstuck. You can then start attracting, converting and keeping more customers. If your business is based in the UK, you can have a free 60 minutes Business SOS consultation (please click) with me to get you unstuck.

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