Theoretical Strategies

In the previous article, the term Strategy has been defined – and refined – three times. Let's now see how we can make an effective use of it. The first definition, pretty academic and clearly referred to Porter’s classical statement has been followed by two concrete definitions, which underlie a methodology while facing with Strategy analysis:

Strategy = Strategy Design and Analysis + Strategy Implementation (a.k.a. Business Plan)
&
Strategy = Strategy Map + Business Plan

The development of a Business Plan is an activity which requires – on average – a huge effort and is substantially the financial proof that a Strategy might work. Without this insight, the Strategy Design and Analysis – possibly through a Strategy Map – may be considered as a Theoretical Strategy.

Are Theoretical Strategies useful ?
But in this case, which is the usefulness of defining a Strategy without any Business Plan? The answer to this question is quite profound and might be summarized in the following two rules:

1. If a Theoretical Strategy works, then the Strategy obtained adding the Business Plan might work
2. If a Theoretical Strategy does not work, then the Strategy designed along with the associated Business Plan will not work

The feasibility of a Theoretical Strategy is a necessary but not sufficient condition to have a Strategy really work.
Therefore these two statements make a Theoretical Strategy an interesting and useful tool, since it allows to provide an insight for any possible Company acting within a Market, foretelling whether the Company is inherently destined to fail or has good chances to play its game and succeed.
It also allows to define Theoretical Strategies that might be adopted within a specific industry depending on how far the various Companies – that are part of the examined industry – are from the designed Strategy.
A Theoretical Strategy is not a best practice: best practices bring different Companies to behave similarly while the objective pursued by designing and adopting a Strategy consists on being different by competitors.

The “best practice” approach has been the Trojan Horse used by Consulting Companies for a couple of decades, claiming that a best practice may reduce risks: unfortunately this brings all Companies in a vertical Market to converge on the same arena, competing with the same offering in the same way. As a clear example you may have a look at the way Telco Companies are substantially interchangeable…