Sunday, 3 March 2013

Business strategy: good, consistent, effective, winning or sustainable?

Evaluating business strategy and trying to establish whether this is good or bad may prove to be a sorely tricky exercise to conduct in practice, insofar as many employers and practitioners, taking heed of the circumstance that strategy execution is of paramount importance for organizational success, tend to prioritise the significance of strategy implementation over the quality of its definition.

The efforts aiming at assessing the worthiness of strategy could be actually considered meaningless from a purely practical point of view, but concentrating all the company resources on its implementation cannot be indeed considered as a recipe for a howling success. Despite the genuine intent of a strategy should emerge from its formulation in fact predicting whether a consistent and effective execution will actually enable the employer to pursue the right direction definitely represents a virtually impossible feat to perform.

Strategy execution should be invariably regarded as a means to an end, that is, organizational success and not as an end in itself. Whether business leaders have not correctly and appropriately identified the firm journey’s end, or rather, the never ending journey’s direction, an outstanding strategy implementation process would anyhow bring an employer to the wrong place at best and directly to bankruptcy at worst. It clearly emerges thus that identifying and adopting the right strategy is crucially important for a business, even more so when this is operating under adverse contextual economic circumstances.
Taking heed of what strategy is and of the reasons behind a strategy formulation and implementation, it definitely is much more appropriate and meaningful referring to strategy, intended in a positive fashion, as consistent, effective, winning and as long as possible sustainable, rather than good.

Whereas the concept of “good” can be subject to different appreciations by the different individuals eventually involved in the tricky strategy evaluation exercise, the ideas of  “consistent”, “effective”, “winning” and “sustainable” more aptly represent the desired outcome and result an employer is expected to obtain from its business operations. Organizations do not merely need strategy as a good plan of action or as something nice-to-have, but need it to set guidelines and identify the direction enabling them to enhance their performance, increase revenues and profit, and ultimately being successful in their relevant market outperforming their competitors. Firms essentially need strategies to attain competitive edge and maintain it over time.

The circumstance that the pre-set objectives are subsequently achieved and that an organization gets where this intended to go clearly implies a very high quality of strategy execution. It can be thus concluded that strategy requires two main, fundamental processes: identification and execution.

The end of the identification process leads to strategy formulation, which should aim at clearly stating the business intent in terms of the definition of the market(s) in which the organization has decided to compete, how to approach this and the position in the market the business aspires to occupy. Once strategy has been carefully and thoroughly identified and formulated, however, it will be sorely tricky to judge whether this is good or bad. By contrast, for difficult it may prove to be, it would be much worthier the efforts aiming at determining whether the identified strategy is clear, consistent, likely to be winning and over what length of time likely to be sustainable.

Since strategy is determined and defined by employers according to and on the basis of the information available to them at the moment these plan for the future, it can be regarded as a speculative process. At the outset, business leaders cannot be sure that their intended plan will take them where these intended to go or whether the direction they have identified may prove to be winning. These clearly develop expectations, but cannot be sure that these will be met; which is perfectly consistent with the risk associated with every business activity, that is, with the initiative of setting up and running an organization.
As a general rule, transparency and comprehensibility can be both considered as mandatory requirements to ensure consistency within an organization so that these should be invariably included amongst the most important features of any given strategy. First and foremost, strategies need thus to be clear and coherent with the genuine aim and objectives an employer aims at pursuing; to produce the desired effects these need to be clearly linked to and to some extent evocative of these. Once an employer has thoroughly investigated the exogenous and endogenous contexts by means, for instance, of PESTLE, SWOT and scenario planning tools the approach to the market and the positioning of an organization within it have to be clearly reflected in the identified strategy.
Consistency is a feature which can and should be assessed from the outset, that is, from the moment strategy has been identified and should be subsequently monitored throughout the execution process. In the event of the implementation process, either deliberately or inadvertently, deviating from the initial plan, business leaders, strategy specialists and managers should be able to identify the emerged gap and decide how to bridge this.
Ensure strategy effectiveness is basically concerned with assessing whether the approach identified by the employer to execute strategy actually supports this in obtaining the planned and expected results.
Whereas monitoring consistency essentially enables employers to assess whether the programme unfolds as originally planned, assessing strategy effectiveness enables these to evaluate whether what defined and prepared in theory produces the intended outgrowth in practice. This does not necessarily entail that the identified strategy will show to be winning, but just that the plan is unfolding consistently with the initial plans.
Despite strategy effectiveness is impossible to predict and let alone estimate at the outset, this can be properly monitored and appraised throughout the strategy implementation process.

A consistent, effective and well executed strategy cannot ensure of its own that employers will be successful in the relevant markets these have decided to compete in. Employers can indeed make plans, monitor and keep under constant control strategy execution in order to ensure this to lead the organization where this intended to go; notwithstanding, the identified direction could finally prove to be wrong. This being the case, the pre-identified strategy will prove to be unproductive, fruitless and unsuccessful.

A winning strategy is a strategy enabling employers to gain competitive advantage over competitors and a steadily dominant position in the market. Strategy can be thus deemed winning whether after being properly identified and executed enables employers to increase revenues and profits and stabilize the business presence in the market.

Any identified strategy, nonetheless, can hardly firmly ensure a business existence and stability, even more so in the mid- to long-term. Despite sustainability definitely represents one of the most significant features of strategy, this characteristic does not imply that strategy has to be maintained unaltered over time. A winning strategy has to be maintained as long as it shows to be successful, the moment business leaders should ascertain that the adopted strategy is no longer sustainable, or is about to become no longer sustainable, these should promptly amend this accordingly.

Being able to assess whether and for which period of time a strategy may prove to be sustainable is obviously extremely tricky, arguably impossible. Predictions can only be based on what employers consider probable and expect thus to practically happen in the future. This process aims at envisaging and anticipating future trends and customers’ wants and expectations and identifying the most suitable way to meet these. Make predictions hence essentially represents a prospective exercise.

Many industries, especially consumer electronics and more in general employers operating in sectors whose products are sensibly influenced by technological advances, might sometimes find it relatively straightforward to develop a new winning strategy, but are at the same time likely to be exposed to more serious threats in terms of strategy sustainability. Consequently, these types of firms need to more frequently assess and amend their strategies to ensure their survival prior to their success.


The problem with a winning strategy is that, differently from consistency, business leaders are able to find out whether a strategy is winning or otherwise somewhat of retrospectively. It is in fact only after having implemented a series of actions and activities that employers will be able to assess the worth and value of their plan. Under some circumstances, employers might find out that the pre-identified strategy is even detrimental to the same preservation of the business operations when it is definitely too late to even try to change or reverse the course of action, which may have already reached a point of non-return. Being able to discern at an earlier stage whether a strategy will prove to be winning or otherwise is an utterly difficult feat to perform; employers typically find it out only by looking back on past events and with the wisdom of hindsight.

The circumstance employers can assess the effectiveness of their strategies only retrospectively, nonetheless, should not be associated with the idea of emergent strategy. Supporters of the emergent strategy idea contend that the pace at which change occurs in the external environment accounts for employers being unable to formulate strategies and that these are thus only retrospectively identified. It is an axiomatic fact that the exogenous environment is changing at an increasingly rapid pace; notwithstanding, it cannot be backed the idea that employers are to some extent victim of the circumstances and have no influence at all over their strategies. Whether this should be the case, businesses would all point to the same direction and would find it harder to determine the reasons behind their and their competitors’ success and failure. Consumer electronics manufacturers, for instance, are arguably more exposed to change than the employers operating in other industries, but this does not entail by any means that these employers do not accurately and craftily devise their strategies.

It can be argued, in contrast, that it is just when employers lose control of their strategies that organizations start getting into serious and all too often irreversible troubles. Under some instances, employers are even forced to leave their market and cease their business operations for not having taken appropriate action, to wit: for not having timely changed strategy or for having persisted with the current inappropriate, obsolete plan of action.

When in the mid-1990s Mr Jong-Yong Yun was appointed as Samsung Group President and CEO, for example, he definitely had crystal clear ideas about the change of strategy needed by the South-Korean company to recover and emerge from the severe financial crisis affecting at the time the entire Asian region. A similar story is that of Lenovo’s 2009 appointed CEO Mr Yang Yuanqing, who by means of a tremendous rally enabled the Chinese computer manufacturer to become, in a period of less than three years, the leading PC global manufacturer ahead of HP, Dell, Acer and Asus (The Economist, 2013 – Source Gartner). Whereas the South-Korean organization owes it spectacular success to the restructuring plan developed by Mr Yun, supported by a radical change process based on encouraging a sense of crisis and instilling in management a sense that the company could go bankruptcy any day soon (Yun, 2003), Mr Yang strategy was based on the “Protect and attack” approach, namely protect the Chinese market and corporate PC sales unit, while attacking new markets introducing new products (The Economist, 2013).

Both Mr Yun and Mr Yang strategies proved to be more than simply successful. These examples are unquestionably astounding; notwithstanding, none of them clearly owed these results to something which just happen, but rather to the previous meticulous and crafty prepared plan of action and to the subsequent constant monitoring and control activities performed.

The strategy developed and executed by the South-Korean giant has proved to be absolutely winning and sustainable; albeit this does not really necessary entail that no change of strategy has been implemented during these years. The secret of the success of the South-Korean electronics manufacturer should not be indeed regarded as a secret, Samsung success is clearly due to the strategy identified and pursued by Mr Yun, which proved in practice to be winning in combination with the radical cultural change simultaneously implemented.


Considering, for instance, the smartphone market, Samsung’s strategy has been defined “spray and spray.” The overwhelming success of the electronics giant is essentially based on the incredibly wide range of Android models introduced by the South-Korean manufacturer in the market, which have enabled this to meet all types of customers’ wants, at every price. The unquestionable success of Samsung seems to be hence based on the “breadth and depth” of its offering (Mobile Network Comparison, 2013). Sony, by contrast, is allegedly likely to change its strategy in the incoming future. According to Mr Hirai, Sony CEO, the Japanese reputable manufacturer might soon abandon the low-level market to focus its offering on top-of-the-range products (Mobile Network Comparison, 2013). As further explained by Sneeden, probably by reason of the failure of the Sony Xperia J, Sony will abandon the smartphone entry level segment in a period of approximately two-year time to concentrate its efforts on the “mid- to premium tier” (Low, 2013 – CNET Asia). The final aim is clearly that to produce quality items only and preserve the “Sonyness” considered as a distinctive hallmark of the Sony’s high quality products. The same approach is likely to be used by both the Taiwanese HTC and the American Motorola (Mobile Network Comparison, 2013). Apple, which since its founder’s Steve Jobs death in 2011 has offered little in terms of innovation, is rumoured to preparing for introducing a cheaper iPhone. The firm has denied having such a plan, however, rumours has it that a cheaper iPhone, to be marketed in the emerging markets only, is indeed under preparation (The Economist, 2013).

The strategy pursued by Samsung in the smartphone market seems to be different from that embraced by its competitors. Reportedly and unsurprisingly, as a consequence of the current global economic slowdown, the organizations performing better are in general those producing low-cost and top-quality items (France 24, 2013 – Source Les Echo). This could indeed justify the change of strategy in terms of positioning in the mobile phones market decided by Sony, HTC and Motorola basically aiming at averting the presence of too many competitors in the same share of market or niche. It is clearly difficult to predict which strategy will prove to be winning in the future. What it is sure is that business leaders invariably have clear ideas about what they want to achieve and about the strategy and direction their organization have to pursue; they are obviously unsure about the final outcome or aftermath of these. Keeping focused on the current and future trends and constantly analysing the market, nonetheless, can undoubtedly enable employers to avoid a complete failure or, the worst comes to the worst, to eventually cushion the blow.
It can be concluded that whereas the concepts of good and bad can be hardly considered meaningful when associated with strategy, the ideas of consistent, effective, winning and sustainable, albeit not invariably being under the employers’ full control, can definitely prove to be much more appropriate and significant. Especially when the economic landscape appears to be bleak, employers need to be more focused on their strategies and take prompt action to adapt these accordingly as soon as they perceive and receive the first signal that the market trends are likely or about to change.

Longo, R., (2013), Strategy: good, consistent, effective, winning or sustainable?, HR Professionals, Milan, [online].