A strategy is a long-term plan that an organization or individual develops to achieve a specific goal in a competitive environment. It involves defining the actions and resources that will be necessary to achieve the goal, as well as how they will be implemented and coordinated. A good strategy is carefully considered and takes into account the internal and external environments in which the organization or individual operates, as well as the potential risks and opportunities. By developing and implementing a strategy, an organization or individual can increase their chances of achieving their goal and succeeding in a competitive environment.
Striking Fear Into The Hearts Of The Competition
Communications or actions designed to invoke a response in the competition. For example, a technology company that announces a future product without much investment in actually developing the product. This may be done to distract the research & development efforts of competitors.
Do Nothing Strategy
The decision that doing nothing is your best strategic move such as a technology company that decides not to respond to a competitor’s aggressive price cuts because they feel they have a better product that can compete at a higher price.
Tit for Tat
Tit for tat is a decision to respond to a competitor in an equal way such that you push back but not so hard that you escalate things. For example, responding to a competitor’s price decrease with an equal price decrease that may help to avoid a price war.
Last Responsible Moment
Last responsible moment is the strategy of delaying a decision or action until the optimal time. For example, waiting to see if a competitor has any success with a bold new product line before rushing to compete with them at great cost.
Long game is a strategy that optimizes for total long term gains over short term gains. For example, a firm that misses its profit targets because it invests in product development.
Cut and Run
Cut and run is a decision to abandon a failing strategy despite high costs to do so. For example, a city that bans fossil fuel burning vehicles such as cars on a large number of downtown streets as a measure to improve air quality.
Failure is Not an Option
Failure is not an option is the decision to continue to invest in a failing strategy despite mounting costs such a military organization that continues to invest in the development of an aircraft despite ballooning costs and indications its design is deeply flawed.
Grand strategy is a complex strategy that is non-obvious and potentially long running. For example, a chess player who gives up pieces in order to establish a strategic position on the board.
Soft power is the ability to achieve goals using influencing techniques. For example, a nation that negotiates data sharing agreements to copy databases about foreign nationals directly from their government. This could be contrasted with spying methods that attempt to get the same data without permission.
Failure demand is when you benefit from your own failures. For example, an unpopular telecom company that has extremely busy phone lines and an unusable website such that customers find it difficult to cancel their accounts.
Fail often is the practice of taking a large number of risks such that regular failures are expected. For example, an individual who pitches a business plan to many investors with the realization that each pitch has a high chance of failure. This may nonetheless work out eventually if the individual improves with each pitch.
Fail well is the practice of failing cheaply, safely and quickly. For example, business experiments that are inexpensive such that their failure doesn’t have much impact.
Marketing myopia is a flawed type of strategy that involves focusing on a product as opposed to customer needs. For example, customers don’t need oil they need energy such that an “Oil Company” may not survive into the future where an “Energy Company” will if it adapts to the needs of society and remains competitive.
Camping strategy is the action of physically moving to a location that has some advantage. For example, a Japanese chocolate maker that opens a small office in Paris that then prints “Paris” under their brand name on their logo to associate the brand with the culture of this great city. The term camping strategy implies some small, temporary or superficial move to a location.
Economies of Density
Economies of density is the efficiency that is gained by being close to things. For example, a business that builds its distribution facilities within close proximity to large population centers.
Economies of Scope
Economies of scope are the efficiencies that are gained by variety. As a strategy, this involves offering variety to increase your value to the market. For example, a company that has millions of items in stock such that it represents a one-stop-shop.
Economies of Scale
Economies of scale is the tendency for your costs to drop as you produce more. For example, if you create a $1 million app for one user, your cost is $1 million per user but if you have 1 million users, your cost drops to $1 per user.
Essential complexity is the process of making something as simple as possible without making it so simple that it loses value. This is a common type of design strategy. For example, a clothes dryer with a single button that just works such that you need not input any options to get a satisfactory result every time.
Embrace, Extend and Extinguish
Embrace, Extend and Extinguish is the poor ethical practice used by large firms that involves embracing and working with emerging firms, standards and practices with the ultimate goal of destroying them. For example, a large firm that engages a small innovative firm as a partner but then squeezes them until they fail.
Underpants gnomes is a type of flawed strategy that includes a magical step that is unexplained.
Step 1: Write an app
Step 2: ?
Step 3: Big profits
An economic moat, also known as competitive advantage, is a capability or asset that gives you a sustainable advantage in your business. Attempts to build a moat are a common type of strategy. For example, an organic farmer who seeks unusually productive companion plantings to develop far higher yields than traditional farms. This would make the farmer unusually profitable, allowing them to scale, allowing them to further reduce costs and improve yield.