Strategy Loop

[Pour la version française, cliquer ici]

The Strategy Loop is a simple framework to help decision-makers review their organizational strategy in 5 key questions (see paper published in French econ newspaper).

The 5 interrelated questions are at the core of strategy thinking:

Where do we compete?
In which product markets do we operate? Where can we create the most value? Should we remain specialized or should we try to expand our market scope? Should we pivot to new markets or exit some activities in which we have little added value? And what is our geographical scope? Should we focus on the local market? Or should we expand internationally?

What is unique value do we bring?
Basically: why do clients – and employees, suppliers, investors and other stakeholders – do business with us? (and not with rivals) Do we have product with unique features or services? Do we deliver superior quality? Is our distribution or customer service better than competition? Do we aggregate a unique set of complementary offers? Or are we able to offer similar products or services but a lower price than our competitors?

How do we deliver unique value?
We deliver unique value because we own or control resources that are valuable, rare, inimitable and non-substitutable. Maybe physical assets, such a well-located store or exclusive access to valuable components. Or superior human capital. Or intangible assets such as reputation for superior quality, patents or a recognized brand. What can we do that others are not able to do? Out of experience and collective creativity, we have developed unique capabilities and know-hows that our rivals do not have. And what about our ability to adapt to changes in markets and in technology?

How do we sustain our unique position?
We have attained a valuable position but can we sustain it? What prevents resourceful rivals form just imitating what we do and crushing our competitive advantage? Beyond legal protections (e.g., patent, copyright, trademark), have we made it difficult for our rivals to imitate what we do? Competitive advantages are temporary in essence: are we constantly innovating to stay ahead of the game?

What is our long-term direction?
This is maybe both the most overlooked and most critical question of strategy: what do we want to collectively achieve as an organization? Sure, we want to be profitable – because, otherwise, our journey will soon come to an end. But where to we want to go? What is our raison d'être in society? Do a little thought experiment: let's pretend we don't exist, what's missing in the world The answer is critical because it justifies our "social licence to operate". Our long-term survival depends on it. 

The framework is iterative. The 5 questions are tightly linked with one another: our long term direction conditions where we compete, which affects the unique value we bring, and how we deliver and sustain value, which in turn will affect how we progress toward our long-term direction. The Strategy Loop thus needs to be regularly reviewed, discussed, and updated.

Feel free to download and share the Strategy Loop templateENFR