Strategy Is a Many-Dimensional Puzzle
Author: Jurgen Appelo
A successful business doesn't just 'happen'; it results from a comprehensive, well-executed strategy. Be skeptical of strategic models, canvases, and strategy mapping methods that let you work in only two dimensions! Business strategy is a complex system, sometimes compared to a multi-dimensional chess game where decisions in various other dimensions affect and influence each move.
Be skeptical of strategic models, canvases, and strategy mapping methods that let you work in only two dimensions!
In the unFIX model, we have identified fourteen strategic dimensions. You may begin your strategic thinking by evaluating your options and constraints in each of these dimensions separately. However, real strategic thinking happens during the next step: when you start exploring how all these dimensions may affect each other.
Differentiation Strategy
Differentiation strategy is a competitive approach that seeks to create a unique and distinct product or service that sets a company apart from its competitors and appeals to customers in a specific market segment.
Market Segmentation Strategy
Market Segmentation strategy is dividing a heterogeneous market into distinct groups or segments based on similar characteristics and needs, allowing businesses to tailor their marketing efforts and offerings to specific customer segments.
Value Chain Strategy
Value Chain strategy is a systematic approach that focuses on creating and maximizing value at each stage of the production process, from sourcing raw materials to delivering the final product or service to customers.
Marketing Channel Strategy
Marketing Channel strategy involves designing and managing the network of intermediaries and activities involved in distributing products or services from the producer to the end consumer, aiming to deliver value and reach the target market efficiently.
Customer Relationships Strategy
Customer Relationships strategy involves building and nurturing long-term relationships with a group of customers through customized interactions and service, aiming to foster loyalty, satisfaction, and repeat business.
Revenue Model Strategy
Revenue Model strategy involves identifying and implementing the most effective and sustainable methods for generating revenue and capturing value from customers, products, or services offered by a business.
Pricing Strategy
Pricing strategy involves determining the optimal price for a product or service that balances profitability with market demand and competitive factors to maximize revenue and achieve business objectives.
People Strategy
People strategy involves aligning the organization's workforce, talent acquisition, development, and management practices to support the overall business objectives and create a high-performing and engaged workforce.
Technology Strategy
Technology strategy involves developing and leveraging technological capabilities and innovations to drive business growth, improve operational efficiency, and gain success in the market.
Partnership Strategy
Partnership strategy involves collaborating and forming strategic alliances with external entities to leverage their resources, expertise, and networks to achieve mutual goals and enhance success.
Organizational Structure Strategy
Organizational Structure strategy involves designing and establishing the framework and hierarchy of roles, responsibilities, and relationships within a company to facilitate effective communication, decision-making, and coordination.
Business Process Strategy
Business Process strategy involves analyzing, optimizing, and aligning the various operational activities and workflows within an organization to enhance efficiency, productivity, and overall business performance.
Finance Strategy
Finance strategy involves developing and implementing plans and actions to effectively manage financial resources, optimize capital structure, allocate investments, and ensure sustainable profitability for the organization.
Political Advocacy Strategy
Political Advocacy strategy involves engaging in planned and coordinated efforts to influence public policy, legislation, and government decision-making processes to advance specific political or policy objectives.
As said before, you can begin your strategy formulation by collecting ideas and constraints within these fourteen dimensions. (Note: you may choose to ignore some dimensions. For example, many organizations are not involved in any form of political advocacy.) As the next step, you should figure out how all ideas and constraints you've identified affect each other across the selected dimensions.
Business strategy is an iterative process that demands a continuous understanding of the market environment, competition, technological changes, customer behavior, and the company's internal capabilities. Strategy is a multi-level, multi-dimensional evaluation that must consider how all these elements affect each other. Unlike what some business canvases and mapping methods may lead you to believe, strategy is not merely a two-dimensional exercise.
Strategy is a multi-level, multi-dimensional evaluation that must consider how all these elements affect each other.
Once formulated, your strategy serves as a guiding beacon and roadmap to align your organization's efforts. However, it is never carved in stone. As markets evolve, customer preferences change, or new technologies emerge, the strategy must also adapt, pivot, and evolve.
In conclusion, business strategy is an intricate blend of art and science. It's about making choices and consciously deciding how the organization will deliver unique value to its customers while achieving sustainable profitability. It's about playing a multi-dimensional chess game wisely.
And if you ask us, “How should we do multi-dimensional strategy mapping?” Well, the book Good Strategy, Bad Strategy by Richard P. Rumelt would be a good starting point. But I’m sure more blog posts will be on their way soon. 😁
As the ancient Chinese strategist Sun Tzu said, "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat."
