The Essence of Strategy.

VOL. 0033 – FLORIDA, MONDAY, SEP 25, 2023

Juan F. Arjona Harry

President & CEO Strategee

When establishing the need to create a strategy, or in cases where it is required to adopt a strategy over another or others, we must consider what is the essence of the strategy, what makes it work, what makes it unbeatable, what differentiates the company from competitors, among many other questions.

Resolving these issues is critical in the process of choosing the strategy. The following are some of these aspects disaggregated:

1. The strategy should focus on creating value for the customer / consumer: it is common to find in some academic and business forums some preconceived phrases to indicate what is strategy, which are often used in extreme ways, one of them says "the strategy must hurt competitors." a far cry from reality and what strategy should contain. Rather than becoming entangled in an endless chain of actions against competitors, the strategy should focus on creating more value for the consumer / customer. This is what makes a powerful strategy with enough gasoline to drive the sales and operations of the company.

The chosen strategy should help to make it easier for the customer, give more perceived value, and grow a sense of comfort for the client / consumer. Never focus on actions dedicated to hurt competitors.

2. The strategy must be sustainable: it is useless to plan or design a strategy, if it cannot be sustained over time, at least at the time when the cycle of the purchase decision has been met for the ultimate consumer / client in the market. The strategy requires the time between design, implementation and modification of buying behavior to produce the results expected.

3. The strategy should keep the DNA of the company: the strategy should imply the competitive actions of the company, and take the company’s own style. It can’t be something designed for which the company doesn’t own internal skills or knowledge about how to run it.

4. The strategy should help build Brand Equity: all designed strategy must be framed within the positional axes of the brand, and if that is not done, the strategy would be destroying Brand Equity. Thus the strategy is designed to pass through a filter of critical questions that lead to value, how much Equity is helping to build or not.

5. The strategy must consult the industry, the market, the competitive environment and competitive position that the company holds in the market: could have no chance of success, if the strategy is more suited for other sector or category. Or has been designed for a different competitive position of our company (can handle any of the following competitive positions: leader, follower, challenger and niche), or is more suited for another moment or competitive environment that is different from living in the market. It should therefore also assess the level of relevance of the strategy (something is relevant when it is at once timely and convenient).

6. The strategy should be affordable without affecting the liquidity position / profitability of the company: this means that if the corporation adopts the strategy, it must, at least reach its breakeven itself, or preferably, generate greater profits for company. The strategies are conceived and designed to grow market share and operating margin at the same time.

7. The strategy must be measurable: must have its own board of management indicators previously designed from conception, so that you can track in detail at every stage from inception, consolidation, maintenance and competitive reaction.

Without considering these issues when designing a strategy, it will be difficult to meet the corporate mandate to grow profitably.