The authors emphasize on the importance of having a short (35 words max) company strategy, and communicating it to the employees. This is important to direct the companies operations in a coherent manner. The company and its employees need to know where the road is going. A strategy is not about your values of your mission, but simply about what your competitive game will be: what are you doing differently to your competitors?
With a clear definition, though two things happen:
1. Formulation becomes infinitely easier because executives know what they are trying to create.
2. Implementation becomes much simpler because the strategy’s essence can be readily communicated and easily internalized by everyone in the organization.
Elements of a Strategy Statement
1) Define the objective: maximizing shareholders value is not an objective. Ask yourself with what objective you are going to maximize it. The objective should be time-bound, measurable, and specific.
2) Define the scope: there are three dimensions; customer/offering ( target group), geographic location (=serve only a specific area, …), and vertical integration. Clarify the boundaries to tell managers on which activities to focus or not to focus.
3) Define the advantage: most critical part of the strategy statement. Explain why your customers will buy the product and what makes it distinctive. This helps employees understand how they can contribute to the successful execution of the strategy.
Basically, the strategy should tell in 35 words what your company does differently to competitors. It should be formulated very carefully as it can help in reaching long-term success.
The first step to create a great strategy, which requires careful evaluation of the industry landscape (customer needs, segmenting customers etc.). Analysis of competitors’ current strategies and a prediction of how they might change in the future.