Strategy Diamond

Developed by Donald Hambrick and James Frederickson

Four
Four dimensions are analyzed: Arenas, Vehicles, Differentiators, Staging and Economic logic. Economic Logic being at the centre.
cen
It
It integrates important choices into a bigger picture instead of as a piecemeal approach
Arenas:
Where will we be active, and with how much emphasis?
Which
Which market categories, which market segments, which geographic
areas, which core technologies, at which value creation stage?
This element of the diamond relates to the fundamental choices
strategists and executives make.
The additional question of how much emphasis should be placed
where is also important. Do we compete in three product areas equally,
or is one of them at the core of what we do?
Strategy
Strategy is as much about what not to do, than it is about what to do.

Economic Logic:
Underlying all of the above, a given strategy has to be
based on a clear understanding of how a firm will make
profits.
This is also where it is critical that things tie together.
E.g. If the strategy is based on an assumption of providing
low prices to customers, it also has to be grounded in a
number of factors that allow the firm to have a unique low
cost base, and if possible build in elements to make sure
these advantages reinforce each other, and are built on
enduring capabilities.

Staging:
The sequence and speed of various initiatives
Arenas
requires careful consideration.
Not everything is equally important.
Timing is a critical element in strategy,
particularly in some of the winner takes all
markets.
Staging
Economi
Vehicles
Use a building analogy: What is the
& Pacing
c Logic
foundation, what are the walls, what is the
roof?
Other references that tie into this idea of
Differentiators
staging: the three growth horizons, or the stepby-step approach to growth.

Vehicles:
This is all about how to get there.
How can a firm achieve international
expansion,?
How can it get to a strong position in a new
product/market segment?
Organic growth, internal product
development, JVs, alliances, mergers &
acquisitions?
Often, the selection of vehicles is a bit of an
afterthought, with most attention focused on
which arenas to compete in.

Differentiators:
A
A strategy should be specific not only about where to compete and how to get there, but also how to win.
Differentiators dont just happened they also require careful planning. This is where some of the other strategy literature ties
ti in:
Exceptional service, low prices, unique technologies, image and brand, styling, etc. can all be unique differentiators.
As
As always, trying to be all things to all people is not going to work.