Video Transcript: An Overview of Corporate Level Strategy

hi. My name is Erica Olson. Today's whiteboard session is on corporate level  strategies. Strategy is one of the most widely misused terms in strategic  planning. So I'd like to take this opportunity to clarify the confusion so you can  use it effectively and build a truly strategic plan. So we're going to define the  word strategy as a guiding approach and specific to this whiteboard session,  because we're focused on corporate level strategy, we're answering the  question, where we play and how will we win? So we answer those questions in  a couple different ways. I like to think about them in sort of almost like three  different levels. So the first level is the degree of shift. And this isn't a traditional  type of strategy, but it is a guiding approach to a planning process that you need to clarify for your planning process, sometimes the degree of shift that you're  intending with your process and intending with your plan is incremental. And  what I mean by that is most planning processes are intended to move an  organization from where it is today to somewhere in the future, and that future  state may be somewhat similar to where we are today, or it may be totally  different. It may be transformational, and it may be somewhere in between. So  what's important for you is to be clear about what's the degree of shift that your  plan is intending and you're intending to move with your organization. Is it  incremental, a little adjustment? Is it substantive? A little bit more? Is it  transformational? A lot more. So That's level one. Level two are your  organization wide strategies. Organization wide strategies are overarching,  which is why we call them that. They're also called generic strategies, taking a  page off of Michael Porter's book, specifically the guru of strategy, and this type  of strategy answers the question, how will we win? So there are three ways you  can answer that question. And what's important for you to listen for, as I'm going  through this, is you need to lead and compete on one of these three, and you  need to be good at the others. So the first one is lowest total cost. If you're  leading with this, you're competing on scale, think Southwest, and if you're  competing on scale, you need to be differentiated and really, really good at  price, meaning delivering the total lowest price or lowest value, really, sorry, not  the lowest price per se. You need to have good quality. But it doesn't have to be  five star, good value and probably an okay selection, but not a broad selection  again, to compete on scale. The second strategy that you could compete on and win in is product service leadership. And if you're leading with that, you're  competing on speed. And when we mean speed, we mean first to market, so to  be differentiated. And to win with this strategy, you've got to be good at getting to market first, and you've got to be good at building the product that is the best of  the best, the most innovative. The third strategy is executing a customer  intimacy strategy and winning on scope. And by scope we mean a specific  target market with a specific set of needs that you're serving through products  and services. Think Edward Jones and to be differentiated and really win with  this strategy, you need to be great at delivering amazing customer service and 

client service and developing and sustaining amazing relationships. So again,  like I said, you need to pick one and be good at the other two. All right. The next  level is our growth strategies, and that answers the question, Where will we  play? There are four of them, and they're in a nice two by two matrix, just to give us some context. So on the top is our markets, current markets we're in, and  new markets we might enter our products and services, current that we have to  sell, and new that we might develop. So if you have more potential in your  current markets with your current products, you can grow through a market  penetration strategy. If there are new markets that you can enter with your  current products, that's a market development strategy. If there are new  products and think new new that you can develop and sell into your current  markets, that's a product development strategy. And new markets and new  products is a diversification strategy. Certainly, market penetration is less risky  than diversification. Unlike org wide strategies, you can certainly execute more  than one growth strategy, and you probably are more than two is probably too  much, but more than one is likely. So with that, those are the three different  levels of strategy. They help you answer the question, Where will we play? How  will we win? And when you answer those really. Succinctly and clearly, you know you have a truly strategic plan. That's all we have for today. Subscribe to our  channel. Happy strategizing.