From the volume of searches on Strategy vs. Tactics, it appears that there is a lot of demand for more about strategy. So I’m going to provide you with a brief description of strategy, based on an article sent to my by the Skinny Professor. (Reference: Hambrick & Fredrickson, “Are You Sure You have a Strategy?”, Academy of Management Executive, 2001).
Strategy is about positioning yourself relative to the competition. Hambrick & Fredrickson have broken strategy down into four types of strategy decisions: Arena, Differentiation, Vehicles and Staging.
- Arena. Where will we compete? What products, markets, geographies and core technologies will we use to compete?
- Differentiation. How will we be different from our competition? What image, price, styling and level of customization will we provide?
- Vehicles. How will we achieve our strategy? Will we use internal growth, joint ventures, licencing or acquisitions?
- Staging. How will we stage our strategy? What are the speed and sequence of our initiatives?
The four elements of strategy combined are what creates the economic logic of any strategy. Each element needs to work with the other elements. There is no “one right” combination of elements, or strategy. You will note that these strategy decisions tend to be longer term, and less easily reversed than a typical tactical decision.