Home > Strategy > Choosing among strategy options. Strategy approaches.

Choosing among strategy options. Strategy approaches.

I have posted several comments on strategy before, (1), and a certain idea that all options seem reasonable arises, but of course, strategy cannot be drafted following ten different alternative procedures, (if there were only ten…). Harvard Business Review published in June 24th 2015 an article by Martin Reeves, Knut Haanaes and Janmejaya Sinha, based on this particular idea, which at the same time is an abstract of their book “Your strategy needs a strategy” (2) y (3). Choosing a strategy option correctly is more relevant every year as the path of change becomes faster and faster. The authors compile up to 81 options since 1958, and they state that the relationships between them are not clear and neither are the reasons clear to choose one or the other in any given set of circumstances. (See below just a sample of the options). Strategy Options In order to help companies select their strategy tools adequately, the authors depict the “strategy palette”, a model to choose the correct strategy option or combination of them to any pack (or packs) of (changing) circumstances. The first task is identifying and describing the business environment around three main of its features: predictability, malleability and harshness. Taking them all, five kind of environments appear: Five Approaches Strategy Accordingly: In a Predictable Classical environment the job implies fighting for a position through scale, differentiation or new capabilities. In order to match the predictable competitive advantage, firms analyze their capabilities`match with the market and try to improve their future advantages. Adaptive environments ask for continuous experimentation; the advantage is short-lived, so that firms need to change at a faster and more efficient path than others. That requires changing the strategy approach and always having a set of strategy options. In Visionary worlds, winning means being the first in a market or disrupting it. Being able to surf uncertainty (while others don`t see themselves capable to do something creative enough), executing and scaling the product is the task. Creativity and execution combined. In shaping environments firms cooperate to shape the industry to their interests, influencing the stakeholders in the industry. When a mismatch between approach and environment or external or internal shocks engender a harsh environment, firms need to free-up resources to survive and continue with one of the other four approaches. Approaches The strategy palette helps companies in different levels, the authors outline:

  • First, managers can to select and execute the correct approach for a given environment in a specific part of the business;
  • Second, managers can use it to managing different approaches in different parts of the business or over time;
  • Third it helps managers support the use of different approaches in businesses or geographies, and still connect approach with execution.

Through the business cycle, the approach also makes sense: a firm is created thanks to a visionary or shaping approach, moving then to adaptive and classical worlds, until a new cycle starts. What should your firm`s approach be? Note: pictures are taken directly from the article below in 2.-

  1. See here: https://joaquinbarquero.wordpress.com/2014/10/11/20-questions-to-be-asked-by-directors-about-strategy-by-the-canadian-institute-of-chartered-accountants/, and here, https://joaquinbarquero.wordpress.com/2013/07/27/what-is-left-of-porters-five-forces-model/.
  2. https://hbr.org/2015/06/navigating-the-dozens-of-different-strategy-options
  3. https://hbr.org/product/your-strategy-needs-a-strategy-how-to-choose-and-execute-the-right-approach/14054-HBK-ENG?referral=02559
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