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1. 2/14/2021 The Definitive Introduction to Strategy Development and Strategy Execution | by Mark Bridges | Jan, 2021 | Medium
https://mark-bridges.medium.com/the-definitive-introduction-to-strategy-development-and-strategy-execution-2d844e1940c6 1/13
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The Definitive Introduction to Strategy
Development and Strategy Execution
Mark Bridges Jan 5 · 12 min read
Note: This article originally published by my colleague David Tang.
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A successful business requires both a well developed strategy and the ability to execute
on that strategy. Strategy without execution is merely theory. Many companies develop
robust strategies, but fail at operationalizing their strategies into implementable steps.
In this article, we will begin by providing overviews for 12 business frameworks related
to various aspects of Strategy Development and Strategy Execution. We also include
references for further information on these business concepts.
With a foundation on some core Strategy frameworks, next, we discuss the art and
science of Strategy framework selection by using the Strategy Framework Canvas (SFC).
1. Consolidation-Endgame Curve
The Consolidation-Endgame Curve framework (also known as Consolidation Curve or
Endgame Curve) is not a well known framework, but is one that offers incredibly
insights into market dynamics and competitive strategies.
This framework was developed by the management consulting firm AT Kearney after
they performed a study on 25,000 firms, representing 98% of the global market cap. The
firm realizes that all industries go through the same 4-stage lifecycle — Opening, Scale,
Focus, Balance & Alliance. Across all industries, the same characteristics are exhibited at
each stage of the Curve.
By appropriately identifying our stage and understanding the defining traits and
behavior of our stage, we can better understand and predict market and competitive
behavior and trends. Every major strategic and operational move should be evaluated
with regard to the industry’s stage in the Consolidation Curve.
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On a more subtle note, the industry stage also governs what type of management and
leadership works best for the company. In other words, the management team in the
Scale phase may not possess the right skills to run the company at the Balance & Alliance
stage.
2. Porter’s Five Forces
Developed by Michael Porter, recognized as the father of modern business strategy,
Porter’s Five Forces is one of the most well known classic strategy frameworks. Porter’s
Five Forces is a framework used for industry analysis and understand the various
dynamics amongst industry players and external “forces.”
It is based on the theory that competition in any industry is dependent on 5 basic forces
— Potential Entrants, Internal Rivalry, Suppliers, Buyers, and Substitutes (or
Complements). The collective strength of these forces determines the ultimate profit
potential and allocation in the industry.
Using this framework, we can determine how attract it is to compete in any industry, as
well as what the overarching strategy should be to compete successfully in the industry
— success is determined by the ability to develop a sustainable competitive advantage. It
can also be used to assess which industry trends may pose as opportunities or threats.
3. BCG Growth-Share Matrix
The BCG Growth-Share Matrix (also called Product Portfolio and Boston Matrix) is a
classic competitive positioning strategy framework developed by the management
consulting firm Boston Consulting Group (BCG). The growth-share matrix displays
graphically in a 2-by-2 matrix one of two scenarios:
The position of each business of a company’s portfolio; or
Compares the position of various players in one industry.
The two axes of the matrix are 1) market/industry growth and 2) relative market share
(RMS). We then plot our products onto the matrix and quadrant associated with the
product drives its strategy.
The quadrants are defined as follows:
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Star — high RMS, high market growth;
Cash cow — High RMS, low market growth;
Dog — Low RMS, low market growth; and
Question mark — Low RMS, high market growth.
The key premise to this framework is that products located in each of the quadrants will
be in fundamentally different cash flow positions and should be managed differently.
This framework is used to assess trends in the evolution of a company’s portfolio of
business (when matrix is drawn for both the current year and past years). It can also be
used to understand the competitive position of each business, possible cash
requirements, and focus attention on key issues.
4. Blue Ocean Strategy
Blue Ocean Strategy is Growth Strategy framework focused on the idea of creating an
uncontested market space–i.e. a “blue ocean.” This framework is very innovative, as its
principles challenge the conventional business strategy principles of fighting
competitors head-on. The Blue Ocean Strategy framework evolved from a framework
called Value Innovation developed by Gemini Consulting (now Capgemini Consulting)
in the late 90s.
At the heart of Blue Ocean Strategy, we have concept of Value Innovation. Value without
innovation tends to focus on value creation on an incremental scale, i.e. something that
improves value but is not sufficient to make us really stand out in the marketplace.
Innovation without value tends to be technology-driven, market pioneering, or
futuristic, often shooting beyond what buyers are ready to accept and pay for.
Value Innovation occurs only if we align innovation with utility, price, and cost
positions. The focus here is not time-to-market, bleeding-edge technology or best
practices. It is the ambition to break one of the most commonly accepted dogmas of
competition-based strategy: the value-cost trade-off.
It is conventionally believed that companies can either create greater value to customers
at a higher cost, or create reasonable value at a lower cost. Here, strategy is seen as
making a choice between differentiation and cost. In contrast, to create blue oceans, we
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need to pursue differentiation and low cost simultaneously, by looking within and
beyond our industry boundaries and redefining a market altogether.
To discover more Strategy frameworks, download our compilation of Strategy &
Transformation templates here. This document covers 35+ Strategy & Transformation
frameworks, from McKinsey 7-S to the BCG Experience Curve to the Greiner Growth
Model.
5. SWOT Analysis
The SWOT Analysis (also called SWOT Matrix) is one of the earliest strategy
frameworks. It was developed in the 1960s at Harvard Business School by Learned,
Christensen, Andrews, and Guth.
The name is an acronym for Strengths, Weaknesses, Opportunities, and Threats. This
framework provides basic directions for structuring strategic analysis. The underlying
theory is that assessment of competitive position should combine both an external and
an internal analysis. The internal factors are Weaknesses and Strengths, whereas the
external factors are Opportunities and Threats.
We can conduct SWOT analyses for our own organization in addition to our competitors,
so that we gain added insight into our company’s competitive position. The output of
this analysis is often displayed in the form of a 2×2 matrix. SWOT Analysis is often
conducted in conjunction with PEST Analysis (see below).
6. PEST Analysis
PEST Analysis is a framework evaluating macro-environmental factors used in the
environmental scanning component of strategic management. The PEST analysis
framework has become increasingly popular and relevant as the first decade of the 21st
century have given rise to green business and environmental concerns from the public.
PEST is an acronym for Political, Economic, Social, and Technological, which are the
macro-environmental factors to analysis in this analysis.
This analysis is often performed in conjunction with other popular frameworks, as a
means of enhancing the understanding and output of these other frameworks.
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Specifically, it is often used to help explain the analysis in the following frameworks:
Porter’s Five Forces; SWOT Analysis; Value Chain Analysis; and Industry financials.
PEST Analysis is often performed in a 3-phase process: data collection, industry trend
analysis, and trend quantification.
7. Marketing Mix
The 4 P’s of marketing, often just called Marketing Mix, is perhaps the commonly used
corporate marketing framework. The marketing mix refers to the 4 levers to adjust when
determining the essence of product’s marketing strategy. The 4 P’s refer to Price,
Product, Promotion, and Placement.
This framework has been extended to 7 P’s, to also include Physical Evidence, People,
and Process. The definitions for the additional 3 P’s should not be confused with the
People-Process-Technology framework, which is more operationally-focused (vs.
consumer-focused).
8. Product Lifecycle; and 9. the Consumer Adoption Curve
Product Lifecycle analysis is a tool to predict how sales will develop based on the age of
the product category. Marketers and strategists can use this analysis to predict sales
growth, associated customer and competitor behaviors, and, in turn, devise the
appropriate product marketing strategy. The Product Lifecycle itself it divided into 4
stages of development: Introduction, Growth, Maturity (and Saturation), and Decline
(and Termination). The length of each period varies tremendously. Some products have
very short cycles, whereas others can take decades or even centuries to go through the
cycle.
The lifecycle can be mapped against the Consumer Adoption Curve, where the peak of
the curve generally occurs in the maturity stage of the Product Lifecycle. In fact, the
Product Lifecycle is typically mapped against the Consumer Adoption Curve to draw out
key marketing and competitive insights. By understanding what stage of the Consumer
Adoption Curve we’re at, we can gain invaluable insights into the who our target
customer are, as well as their defining attributes.
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The Consumer Adoption Curve is defined by 5 sequential stages: Innovators, Early
Adopters, Early Majority, Late Majority, and Laggards. Typically, there is a “chasm”
between the Early Adopters and Early Majority. Product Lifecycle Analysis also provides
a framework to understand the competitive environment. It makes an underlying
assumption that sales and profitability follow a predictable pattern for all industries and
all products within those industries.
10. Balanced Scorecard
The Balanced Scorecard (BSC) is a strategic Performance Management tool. It is a semi-
standard structured report, supported by proven design methods and automation tools,
that can be used by managers to keep track of the execution of activities by the staff
within their control and to monitor the consequences arising from these actions. It was
developed by Robert Kaplan and David Norton.
The BSC approach is called “balanced,” because it supplements traditional financial
measures with 3 key non-financial areas:
A company’s relationship with its customers;
Its key internal business processes; and
Its learning and growth.
This approach enables companies to track financial results, while simultaneously
monitoring progress in building the capabilities and acquiring the intangible assets they
need for future growth.
BSC also provides a framework for company’s to translate their strategy into measurable
and actionable KPIs and objectives. Specifically, it ties 4 key management processes
(Translating the Vision, Communicating and Linking, Business Planning, and Feedback
and Learning) into both short-term and long-term strategic objectives.
11. Organizational Hurdles
In Blue Ocean Strategy, the authors identify 4 main Organizational Hurdles that the
organization must overcome for successful business execution. These hurdles arise when
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a company develops a new strategy to departs from the status quo. These hurdles are the
Cognitive Hurdle, Resource Hurdle, Motivational Hurdle, and Political Hurdle.
Although all companies face different degrees of these hurdles, many may only face a
subset of the 4 hurdles. To overcome these hurdles effectively, organizations must
abandon perceived wisdom on effecting organizational change.
12. Hoshin Kanri
Hoshin Kanri (also known as Policy Deployment, Hoshin Planning, or just Hoshin) is a
Strategic Planning Methodology. It is based on a concept popularized in Japan in the late
1950s by Yoji Akao.
“Each person is the expert in his or her own job, and Japanese TQC (Total Quality
Control) is designed to use the collective thinking power of all employees to make their
organization the best in its field,” Yoji Akao. This is the fundamental principle of Hoshin
Kanri. In other words, this framework ensures that the strategic goals of our company
drive progress and action at every level within the organization. This eliminates the
waste that comes from inconsistent direction and poor communication.
This framework is intended to help an organization:
Focus on a shared goal;
Communicate that goal to all leaders;
Involve all leaders in planning to achieve the goal; and
Hold participants accountable for achieving their part of the plan.
Hoshin Kanri falls under the umbrella of Lean Management (or called Lean Thinking,
Lean Methodologies). Lean frameworks strive for Continuous Improvement of the
organization.
For more information, download the full presentation on Strategy Development and
Execution in original PowerPoint format here.
Reference Sources:
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Complete Business Frameworks Reference Guide
Guide to Business Strategy Execution
Complete Guide to Business Strategy Design
Hoshin Kanri
Formulating a Breakthrough Strategy
Growth Strategy Toolkit
Blue Ocean Strategy Primer
Balanced Scorecard
Product Lifecycle
Porter’s Five Forces
Consolidation-Endgame Curve Framework
BCG Growth-Share Matrix
The Art and Science of Strategy Framework Selection
Above, we highlighted 12 established frameworks around Strategy Development and
Execution. In the world of strategy frameworks, this is just the tip of the iceberg. There
are literally 100s of strategy frameworks developed by strategists, academics, and
consulting firms. Many of these methodologies are included our Strategy Development
Frameworks offering here.
Since so many tools are at your disposable, it can be difficult to determine what the right
approach is for our organization. There are many important considerations when
deciding on the best framework or set of frameworks to utilize, such as leadership style,
business maturity (e.g. small business vs. large enterprise), industry maturity,
organizational structure (e.g. decentralized vs. centralized decision making), corporate
culture, and so forth.
To help navigate through the available strategy frameworks, let’s take a look at the
Strategy Framework Canvas (SFC). The SFC is a unifying choice framework that guides
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us in selecting the appropriate strategy for the circumstances at hand and execute it
effectively. This model is particularly useful for large organizations that are now
stretched across a more diverse and faster-changing range of business situations.
1. Classic
2. Adaptive
3. Visionary
4. Leader
5. Renewal
Classic Strategy
The Classic approach is the most common approach. In this situation, the market is
predictable, basis of competition is stable, and strategy is sustainable.
Classic strategy is achieved through sustainable Competitive Advantage by positioning
our organization optimally in an attractive market. Since the basis of Competitive
Advantage within these environments is known and non-malleable, advantage can be
based on superior scale, differentiation (or, equivalently, scale within a narrower market
segment), or superior capabilities.
The most well-known strategy frameworks are the Classics, such as the ones already
discussed in the earlier portion of this article:
Porter’s Five Forces
BCG Growth-Share Matrix
Consolidation-Endgame Curve
Adaptive Strategy
We use the Adaptive approach when the environment is neither predictable nor
malleable. There is continuous disruption in the market.
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Unlike the Classic approach of sustainable Competitive Advantage, the foundation to the
Adaptive approach to strategy is the notion of serial temporary advantage. Within
unpredictable and non-malleable environments, the emphasis is on continuous
experimentation and real-time adjustment — as opposed to long-term analysis and
planning. Because advantage is temporary, we focus on means and not ends.
Examples of Adaptive frameworks include:
Time-based Competition
Temporary Advantage
Adaptive Advantage
Visionary Strategy
We take the Visionary approach when we can reliably create or re-create an
environment by some degree of predictability by seeing an opportunity and pursuing it
single-mindedly.
Visionary approaches are most frequently associated with entrepreneurial start-ups.
However, large organizations increasingly need to adopt this approach for themselves,
as well.
Examples here include:
Blue Ocean Strategy
Innovator’s Dilemma
Value Innovation
Leader Strategy
The Leader Approach is used when the environment is unpredictable, but malleable. We
can shape or re-shape the whole industry.
A Leader approach both permits and requires an organization to collaborate with others
in a diverse ecosystem that distributes risk, supplies complementary capabilities and
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resources, and builds the market quickly through strength in numbers.
Examples of Leader frameworks include:
Networks
Ecosystems
Platforms
Renewal Strategy
Lastly, the Renewal strategy approach is used when the environment is harsh. This type
of strategy aims to restore the vitality and competitiveness of the organization.
In such a harsh environment, the existing circumstances prevent the current way of
doing business from being sustainable. The first step is to change course to preserve and
free up resources.
Examples here include any type of the following:
Transformation strategies
Turnaround strategies
Once we determine the type of Strategy approach to take, the next step is to adopt a
Strategy Development framework most befitting our organization. Key considerations
include our Corporate Culture, Organizational Structure, Leadership Style, Competitive
Positioning, and Core Competencies, to name a few.
Want to achieve excellence in Strategy Development?
Gain the knowledge and develop the expertise to become an expert in Strategy
Development. Our frameworks are based on the thought leadership of leading
consulting firms, academics, and recognized subject matter experts. Click here for full
details.
“Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the
noise before defeat.” — Sun Tzu
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For effective Strategy Development and Strategic Planning, we must master both
Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design
and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy,
from Corporate Strategy to Business Strategy to “Tactical” Strategy. Many of these
methodologies are authored by global strategy consulting firms and have been
successfully implemented at their Fortune 100 client organizations.
These frameworks include Porter’s Five Forces, BCG Growth-Share Matrix, Greiner’s
Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI),
Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated
Strategy Model for Value Creation, Scenario Planning, to name a few.
Learn about our Strategy Development Best Practice Frameworks here.
Strategic Planning Growth Strategy Business Strategy Hoshin Kanri Blue Ocean
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