The Essence of Strategy

The essence of strategy lies in choosing what NOT to do. If you haven't read my previous post about Dunkin Donuts , then I suggest taking a few minutes to access the article. You will see that Dunkin Donuts has chosen to perform certain activities well and leave other ones out of their focus. They are shooting for a coffee drinker that appreciates no frills, fast service, price, and convenience as opposed to the high-end coffee experience that Starbucks delivers. They have chosen a different customer group and a different value proposition, thereby eliminating direct competition with Starbucks and creating competitive advantage.

During his strategic planning process, Marco has chosen a specific value proposition around delivering the best tasting organic fruits available. As we explore his operating model in upcoming posts, we will see that he chooses to perform certain activities that deliver unmatched value for his chosen customer group. He doesn't muddy his position by performing "best practice" activities that fail to support his value proposition. In selecting his value proposition, he first identified a customer group that was under-served and then began to select components of value that his customer desired.

In the next few posts we will explore how to combine components of value that we outlined in earlier posts. This combination will help to clarify a specific value proposition.