Changing Nature of Strategy

Useful thoughts on the concepts based on long experience.    How is creativity combined with strategy?

The Changing Nature of Strategy: Reflections on Thirty Years
Over the past three decades, gradual shifts have led to an explosion of creative thinking around strategy.    By James Allen  in Bain   Excerpt:

" .... Strategy is about choices. A good strategy helps you decide what to do and how to prioritize between two or more options. It determines the best resource allocation to increase the value of the company. And the best way to increase value is to grow sustainably and profitably. Growth is hard—only about 1 in 11 companies achieve sustainable profitable growth. Of that 1 in 11, 95% lead in their core business.

Therefore, the best strategies use facts, not opinions, to clearly define the core business and provide a plan to lead with that core business. In about 60% of industries, we define leadership by scale—the company with the most market share (measured by revenue or volume) wins. In about 40%, the company with the highest share of industry economics is not the scale leader. These companies do something else. They have the most loyal and profitable customers. They have the most differentiated products, brands or manufacturing process. They dominate an industry “control point”—they are positioned to control far more profit than one would expect, from revenue or a differentiated niche game.   

The best strategies always depend on a rigorous understanding of business definitions and the industry’s rules of the game. You don’t always have to play by your industry rules, but you must understand how money is made. We discuss this in our books, Profit from the Core and Beyond the Core, which remain good primers for good strategy.  ... "