Strategy Statement

David J. Collis is a best-seller author of important strategy books (e.g., Corporate Strategy, Corporate Headquarters, International Strategy and Competition) and articles. He is a professor at the Harvard Business School specializing in strategy.

Michael G. Rukstad was a professor at Harvard Business School and an expert in the fields of corporate strategy, comparative business-government relations, international economics, and geopolitics. He was the author or co-author of more than 70 cases.

Successful business strategies are simple and succinct, however in most organizations, are too complicated and not understood.   A strategy statement provides clarity as to what sets the organization from others.  The author’s claims that the “ 35-word statement can have a  substantial impact on a company’s success . . . it can energize and empower your people will raise the long-term financial  performance of your organization.

Key Points

• Organizations that do not have simple and clear strategy statements in place are likely to fail in moving their strategies forward
• Initiatives, projects and other efforts are launched by well-intended people, only to learn later that they aren’t “aligned with the strategy”
• Leaders of organizations are befuddled and disappointed as they learn that people aren’t aligned to the vision and strategy they had envisioned
• Most executives cannot articulate the objective, scope, and advantage of their business in a simple statement

A good statement includes three components:  objective, scope and advantage.

• Objective:  The objective in a definition of the end statement that the strategy is to achieve.   It should be the “single precise objective that will drive the organization over the next 3-5 years.   It should be specific, measurable and be time-bound
• Scope:  The scope outlines where the organization will compete, and where it won’t.   The scope has three dimensions:  customer or offering, geographic location, and vertical integration.  Customer:  What customer segment are you going to focus on
• Offering:  What products or services are you going to provide the customer to meet their unique needs?
• Geographic location:   What geographic location or locations are you going to focus on?
• Vertical integration:  Are you expanding your organization’s business into another aspect of the business line?   (Apple Inc. is example of firm that has focused on vertical integration of an “ecosystem” for the iPhone.   They control the processor, hardware and software and the phones are sold in apple retail stores.)
• Advantage:  Your competitive advantage describes what your organization will do differently from your competitors so that the objective can be achieved.   It is important to specify:  1. (value proposition) how your offering will be better and different from the competition,  2.  (unique attributes)  what you will do within the organization to produce the advantage