Making strategic choices

Introduction

High performance is achieved in response to high performance choices. Your strategy is about making those high performance choices. It is about picking the most fertile fields where the value your business can provide the most impact and encounter the biggest demand. It is about ensuring you have the choices in place to enable superior value and succes in those fields. Finally, it is about then transitioning to an action / implementation plan that brings those choices to reality.

In this section you can use the StrategyCAD™ integrated choices model to make your strategic choices. The StrategyCAD™ choices model integrates the recognized strategic choices models with a choices implementation model based upon Professor Richard Rumelt's Strategy Kernel. In this way StrategyCAD™ aims to bring formulation (design) and implementation (build / execution) into a singular unified method or process.

Leveling the playing field for leadership teams

Too often leadership teams who are denied access to the tools and methods to make a mutually supportive set of choices - do not make them, and then struggle against and lament poor execution.
An incomplete set of strategic choices leaves your business with potential ambiguities and misalignment.
Incomplete choices contribute to the substantial rate of startup, business failure or under-performance. Indeed, the #1 cause of business failure is an incomplete or ill-considered strategy.

One of the motivations of the StrategyCAD team is to enable a substantially higher rate of startup success and increase the frequency of entrepreneurial success.

In the StrategyCAD™ platform Strategic choices are made visible and demonstrably supportive of each other in the Strategic choices canvas .

strategycad choice model — StrategyCAD choice model that links formulation choices with implementation awareness and choices.

You can work your way through the Strategic choices canvas to make your strategic choices with a focus on elevating performance, by focussing on the where to play choice that offers the most opportunities along with an approach or at least theory on what gives your business the greatest probability of success - which you can continously evolve.

Strategic choices methodology guidance trail

You can work your way through the topics in the canvas below. See the Using the StrategyCAD Strategic Choice canvas for suggestions to design a better strategy - faster.

Methodology

Using the StrategyCAD™ Strategic Choices canvas

How to create a better strategy - faster?

As a guideline, it is recommended you work from top of the canvas to bottom. Within each layer or choice you can work right to left or left to right. In some cases it will be intuitive and useful for you to fill in some lower sections of the canvas based on your existing insights and experience. Whichever order you work, the most significant outcomes are to ensure

Your business aspiration clarifies the type of Strategy to be applied - cost leadership, operational efficiency, differentiation - product leadership, or customer centricity.
You have a definition / description for each StrategyCAD™ Strategic choices Canvas component.
Within a layer each choice is supportive of the other choices in that layer
The sum of the choices in a layer are supportive of and consistent with the layer(s) above.

Aspirations choice roadmap — Working right to left is recommended, to ensure your business starts with the customer / demand side.

StrategyCAD aspiration components — Define your customer aspirations. Your customer aspiration(s) define the difference or impact your business desires to create on the lives of your those who consume your products or services. Remember to include any consumers between your business and the final consumer.

StrategyCAD KPI structure — Based upon your customer and business aspirations, record, at least a candidate set of Key Performance Indicators to keep score of how your business is doing and its performance trend.
Getting the right set of KPI's may require some adjustment or additions as you go through the Strategic choices canvas

Based upon the types of business aspirations your business has, review the key activities necessary to achieve your KPI's, then identify some measures related to the frequency or effectiveness of these activities.

After aspirations

You and your team can complete any Canvas section where it seems to make sense based on your business, industry, customer and other expertise. Order becomes less important, but before declaring your strategy formulation complete ensure consistency and completeness from top to bottom.

Recommended next step

Select the 2. Where to Play choice above and continue your Strategic thinking journey.

Strategic choice where to play — The purpose of the Where we play choice(s) is to ensure your strategy is clear and kept current on your industry description, who your business needs to be superior to and events shaping industry structure, customer needs, supply and demand.

Making your - Where to play choice

Watch the overview of the Where to play to see the Where to Play choice - roadmap.

Expand the sections below for more information.

What industry your business is (based upon needs met)
1. What customer needs or problems does / will your business solve?
  1. Who your business best serves
  2. How you currently or could reach them
    1. Physically
    2. Socially
    3. Emotionally
2. Where are those customers - what geographic regions will the business provide its solutions?
3. What what relative price will/does the business provide its solutions?
Who will your business need to be superior to
1. Who else is aiming to satisfy the same or similar customer needs, in the same geography and at the same relative prices?
2. What are the strategic choices that shape the arena?
3. What does it take (capabilities and resources) does it take to succeed or be the best in your arena?
What is going on in your arena?
1. What industry events are shaping the Arena
2. What Political, Economic, Social, Technology, Ecological, and Legal events or trends are shaping the Arena
3. What needs are customers struggling with - what Jobs are difficult to do?
4. What customer needs are or could be emerging in response to industry and external events?
5. What customer needs are over-served, which ones are underserved?
6. As a result:
  1. What opportunities are available or emerging?
  2. What threats are present or emerging?

Sadly, consumers only care about your business to the extent that it can satisfy their needs.
One undesirable situation a business can find itself in is having a solution that does not really solve a problem, that enough people want resolved.

In the Where we Play - Which needs choice you can engage your and your teams strategic thinking to identify what jobs customers want to hire your business to do to improve their situations in life. The Jobs To Be Done framework recognizes people do not buy products or services, they hire them to solve problems that are impacting their needs, wants and desires. So, a sales director does not want a CRM system, they likely want to achieve higher sales to secure their income and career.

A lack of market / customer segment focus can result in a diffusion of your business's value proposition and messaging. The Customer or market segmentation choice engages or even challenges your teams strategic thinking and choice making to focus promotional, sales product/service development and support resources on the consumers your business can "best" serve.

You can then use the Segmentation, Targeting and Positioning canvas to identify how you will best define, reach and add value to those customers.

Identify and grow your understanding of the arenas or playing fields your business does or could be playing in. You can use the Arena worksheet to capture your teams collective understanding of your Playing fields (Arena) as well as identify and then resolve gaps in your knowledge.

Market and customer Opportunities and Threats will emerge from awareness of and subsequent insights from the external environment. Productivity, efficiency and quality opportunities will frequently occur from insights in the internal environment.

You can use the Arena PESTEL, Industry and Demand and Supply assessment tools to guide and also challenge your and your teams strategic thinking, investigations and discoveries to identify both external opportunities and threats.

You can use the Opportunity and Threat canvases, to provide a standard and consistent way to define and then describe your opportunities and threats.

How to succeed

At this stage you and your team have proposed where your business will play. The purpose of the How to succeed choice(s) is to ensure your strategy is clear and kept current on how to meet those customers needs and deliver customer delight consistent with your business aspirations (product leadership, customer centricity, cost leadership etc).

Unique value blend

In the Unique value blend choice you engage your and your teams strategic thinking to identify the value / quality attributes that mean your target customers, those you can best serve, will prefer to buy from your business.

Cost leadership example

If your business aspiration is to be a cost leader, your value blend might include one or more qualities including competitive price, durable quality and even yet other attributes e.g. convenience, money-back guarantee, extended warranty, lower cost of ownership etc. It might include one or more qualities including ease of installation, superior support, faster return on investment and so on.

Product leadership example

If your business aspiration is to be a product leader, your value blend might include qualities including one or more of superior performance, functionality, style, aesthetics, ease of use.

Target customer meaning

These quality attributes are ideally important to your target customers i.e. it is differential to them to buy.

Your business value blend can go into your Unique selling proposition. Your unique selling proposition differentiates your product with your target market / segment
For example:
You can relax with the confidence of having the highest quality in its competitively priced category.
Enjoy a competitive edge with the fastest setup time and return on your investment in the industry.

Unique value blend examples

The Unique value blend of Amazon.com would include: Cost competitive, huge range, convenience, fast delivery, informed purchases (customer reviews)

The Unique value blend of IKEA would include - Cost competitive, huge range, convenience (car parking, meals onsite), adventurous informative showrooms, unique style.

The Unique value blend of Apple would include: Latest technology, ease of use, aesthetic design, access to huge range of content and apps, durability, interoperability between devices.

The Unique value blend of Walmart would include: Brands consumers know and trust at the lowest price, in stores that are conveniently located or online.

Your unique value blend

The Unique value blend of Your business includes: You can add them into your Strategic choices canvas.

Offerings

With your unique value blend in place, it is time to engage your strategic thinking again to define the offers / types of offers (products, services) you are going to provide to your business's target customers to satisfy their needs.

The offerings will be supportive of your business and, customer aspirations, unique value blend and enabled by the Strengths your business has and its ability to deliver that value in the Integrated value chain.

Once you have titled and described these Offerings and added them to your canvas, you can use the Offering canvas to add some more descriptive and definition details.

Additionally, use the Offering canvas to describe the consumption chain for your Offerings i.e Define, at least conceptually, how a consumer goes from awareness to advocate with your product or service.

Relationships

Every business is part of an ecosystem, every business has a relationship with the community it serves. In this step you and your team use your strategic thinking to identify the types of relationships your customer segment(s) desire

Once you have titled and described these relationships and added them to your canvas, you can use the Relationship canvas to add some more descriptive and definition details.

Based upon those the mutual value proposition of those relationships, you and your team can identify the capabilities and resources necessary to support them.

Which needs

Resources

Sustaining your strategy

Value chain costs

Optimising costs and continuous improvements in cost optimisations are essential best practice. Moreover, the capabilities and configuration of your value chain, comes with costs that need to be understood and optimised to create a margin for profit.

In this section define or describe the costs of your value chain. Identify where optimisation opportunities exist.

Revenue modesl

To do.

Aspirations Here you can optionally provide an overview that links the story of your customer, business aspirations, drivers and KPI's
Business aspiration(s) What business success looks like Define you business aspirations Identify the value provided for stakeholders.		Customer aspiration(s) Impact on our customers lives Define your customer aspirations. Clarify the problem(s) your business solves, addressing what needs, for who to deliver what benefits and delight.
Business drivers Leading indicators of performance Introduction to KPI's and Business drivers Define business drivers (leading measures of success)		KPI's Trailing indicators of performance
Where we play (Choice 2)
Industry arenas Relevance and objectives of Where to play choice Where to play - Geographic regions / geography type Where to play - Industry and industry segments Use Porters 5 forces assessment framework to understand and engineer industry attractiveness and sustain industry threat awareness. Threat of New Entrants Buyer power threat Supplier power threat Threat of substitutes Rivalry threat Complement opportunity / threat	Opportunities External situations you can leverage for advantage Introduction - Opportunity and threat as a structured assessment Introducing PESTELG as the structured framework for opportunity identification. Political opportunity / threat assessment Economic opportunity / threat assessment Social opportunity / threat assessment Technology opportunity /threat assessment Environmental opportunity / threat assessment Legal opportunity / threat assessment Global opportunity / threat assessment Putting it all together Recording and prioritizing opportunities and threats	Which customers Market segments of focus This is the first item's accordion body. Replace with card Which customers (segments) Using the Segmentation, Targeting and Position canvas Use the Segmentation, targeting and positioning canvas, to identify which customers segments can your business can best satisfy and succeed with. Go > Targeting Using the Segmentation, Targeting and Position canvas Use the Segmentation, targeting and positioning canvas, to identify which customers your business can succeed with and successfully target. Go > Positioning Using the Segmentation, Targeting and Position canvas Use the Segmentation, targeting and positioning canvas, to identify how to best position your value proposition with targeted customer segments. Go > Review Review your choices Use the Segmentation, targeting and positioning canvas, to review your choices and reflect on the clarity created. Go >	Which needs - Problems we solve Jobs we enable customers to do Unique value proposition overview Which needs - introduction to needs Which needs - use the innovative jobs to be done framework to identify and understand needs
	Threats Situations threatening performance / viability See the opportunity block, opportunities and threats are recognized from the same methods.		Relative price Relative price dimension of the market we play Define the pricing level(s) you play at.
How we succeed What unique value do we bring and how we generate competitive advantage.
Integrated value chain Use Porter's value chain to define integrated and sequenced steps to deliver your value proposition. Additionally, analysis of your value chain, can be used to identify the strengths and weaknesses in delivery / operation of your value proposition. Define and design an effective delivery system	Competencies (Strengths) What is done or must be done well to succeed Identify and create strengths necessary to enable your effective delivery system	Unique value blend Attributes of the value proposition that makes target customer experience delightful Why delight matters Engineering delight Create a unique value blend
	Weaknesses Activities when improved better enable aspirations Identify, resolve or invert weaknesses necessary to create and sustain advantage / performance.	Offerings Types of products / services offered to meet customer needs Use the offering canvas to design offerings to fit your strategic choices. Define and communicate purpose . Why does the world / business need this offering? Relative pricing . How will the product / service be priced? Customer motivations . Define willingness to buy and pay and your offerings unique selling proposition. Customer motivations . Define willingness to buy and pay for your offering(s) along with your offerings unique selling proposition. Features to fulfil motivations . Define features that fulfill the customer motivations for your offering . Quality attributes / differentiators that augment the customer experience. Define your offerings consumption chain. Create clarity for your customers journey from discovery to disposal. Define your offerings' pre-purchase consumption chain component. Define your offerings' acquire consumption chain component. Define your offerings' usage, support, disposal consumption chain component.	Channels Channel to promote, distribute, sell, or support value proposition Define your channels to support your consumption chain. Channels are the communication channels with your customers.
Partnerships Alliance(s) to create new value propositions, reduce time, cost, or risk or increase quality in existing value propositions Define value creation opportunities via partnerships (Strategic alliances)	Resources Tangible and intangible inputs to value delivery Identify and manage the tangible and intangible resources to enable your value chain		Relationships Managing interactions to deliver value to previous, current, and potential customers. Defining customer relationships
Sustain Business and Strategy sustainability
Strategy management Policies and procedures to ensure the strategy is being regularly reviewed, measured, susained and adjusted in response to performance or changes in the external environment. Choices have costs. In this section of the canvas you can define guidelines for making cost-effective choices for each of the other choices. Alternatively, here you can record how any choices above were influenced to achieve cost efficiency.	Value chain costs Identify and optimise costs Build an understanding of fixed and variable costs in your value chain, plan for ongoing cost-effectiveness	Revenue models Model generating financial income Choose one or more revenue models and ensure your Integrated value chain supports it.

Strategic choices canvas is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
NonCommercial — You may not use the material for commercial purposes.
No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

Iterate to ensure completeness and consistency

Choices will be made and updated iteratively. That is, as you and your team make a choice, or a set of choices you will then need to validate it supports the other choices, particularly those above it. For example, if in the How we succeed choice it becomes apparent the Where to play choice is too diverse, narrow or not a good match for your how to succeed choice then you will need to adjust to ensure mutual consistency of choices.

StrategyCAD™ Strategic choices canvas

The canvas below is a replica of the StrategyCAD™ Strategic choices canvas structure. Functionality is missing, but the structure and intents are present.

Aspirations Here you can optionally provide an overview that links the story of your customer, business aspirations, drivers and KPI's
Business aspiration(s) What business success looks like Define your business aspirations Identify the value provided for stakeholders. Business aspirations can include aspirations for investors, employees, community, environment and more.		Customer aspiration(s) Impact on our customers lives Clarify the problem(s) your business solves, addressing what needs, for who to deliver what benefits and delight.
Business drivers Leading indicators of performance Measures activities your business controls - correlated with achieving KPI's. For example, if customer satisfaction is a KPI and responding to customer enquiries within 1 business day increases satisfaction, a viable business driver could be the percentage of customer enquiries responded to within one business day. You could set a target for that driver (e.g. 80%) based upon its influence on the KPI and the resource demand necessary to achieve it.		KPI's Trailing indicators of performance Based upon your customer and business aspirations, record, at least a candidate set of Key Performance Indicators to keep score of how your business is doing and its performance trend. Getting the right set of KPI's may require some adjustment or additions as you go through the Strategic choices canvas
Where we play Here you provide an overview of your where to play choice and what is believed to be true that makes these or this a good choice.
Industry arenas Industry, industry segments and locations The industry description is an assessment of an industry segment and a decision about its fit for your business. It uses the industry segment canvas to define the elements in the diagram above to inform your decision.	Opportunities External situations you can leverage for advantage Following the description of your industry. You can use the Industry segment canvas to do any of the external, industry or demand and supply assessments on the industry segment. Following those assessments you will identify opportunities for your existing value proposition or enhancements to it. You can elaborate opportunities using the opportunity canvas. Include opportunities to be addressed in your strategy here.	Which customers Market segments of focus Your business is likely willing to serve many, but it best serves a specific subset of its industry. Here you can create and describe those segments. For example, Senior business leaders of medium-sized companies or women aged 25-40 who want to advance their career. If desired you can then use the Segmentation, targeting and positioning canvas to further describe the segment and how you business can reach and succeed with it.	Which needs - Problems we solve Jobs we enable customers to do Customers' hire products and services to improve their situations, or resolve their needs. Use this section of the canvas to identify those Jobs. Once you have those in scope of your business use the Jobs to be Done canvas to elaborate those jobs and identify the needs, trigger events and delighters of those jobs.
	Threats Situations threatening performance / viability Following the description of your industry. You can use the Industry segment canvas to do any of the external, industry or demand and supply assessments on the industry segment. Following those assessments you will identify potential threats to your value proposition. You can elaborate threats using the threat canvas. You can record threats to be addressed in your strategy here.		Relative price Relative price dimension of the market we play Define or describe the pricing level(s) you play at. For example, premium, middle range, mass-market, cost competitive, budget etc. Pricing should be supportive of what target customer segments are willing to pay.
How we succeed What unique value do we bring and how we generate competitive advantage. Here you provide an overview of your How to succeed choice and what is believed to be true that will allow success or victory.
Integrated value chain Define your integrated and sequenced steps to effectively deliver your superior customer value. Use Porter's value chain to how your value proposition(s) are delivered. Ensure each of your input, operations, distribution, marketing, sales and support functions are integrated together along with your common functions including technology, procurement, human resources etc. Ensure your value chain includes support for your defined channels, and valuable relationships. Analysis of your value chain, can be used to identify your business strengths and weaknesses.	Competencies (Strengths) What is done or must be done well to succeed Competencies represent the differential expertise or "know-how" used or required by your business to deliver its value. Competencies are often built up over time and can be extremely difficult to replicate or expensive to purchase, hence a source business advantage and value. You can identify candidate competencies from your generic strategy patterns and reviewing your value chain. You can use the competency canvas to describe and nurture competencies. Identify and create strengths necessary to enable your effective delivery system	Unique value blend Attributes of the value proposition that makes target customer experience delightful A Value driver is an attribute of your value proposition that makes the customer experience delightful. Moreover, it is an attribute that customers can consistently rely on or expect from your value proposition. Example value drivers include: Price / cost, Convenience, Performance, Brand image, Appearance / style / aesthetics Speed of service / delivery, Friendliness, attitude, helpfulness, authenticity of service, Diversity of range and many others. StrategyCAD canvas includes many other recommendations. A value driver blend is the mix of value drivers that create delight for your target customers e.g. Cost, convenience, quality or brand image, ease of use, and durability
	Weaknesses Activities when improved better enable aspirations Weaknesses are competencies or resource gaps that place your business at a disdvantage in fulfilling your aspirations or winning with your target customers. You can record your weaknesses in the canvas and nurture them into strengths or find ways to work around or invert them (use them to your favor).	Offerings Types of products / services offered to meet customer needs Offerings to deliver superior value are added here. You can use the Offering canvas to identify the purpose, success criteria, relative price, customer motivations related to the offering or type, along with other details to clarify the offering of type of offering.	Channels Channel to promote, distribute, sell, or support value proposition Channels are how your business uses to interact with the external environment. Customer channels support promotion, sales, delivery, support of, and potentially return of your offerings. Identifying channels Your consumption chain, integrated value delivery chain and relationships can help identify channels. Channel canvas You can use the Channel canvas to further define the purpose, success criteria and resources to effectively operate the channel.
Partnerships Alliance(s) to create new value propositions, reduce time, cost, or risk or increase quality in existing value propositions A partnership or strategic alliance is a cooperative arrangement in which two or more businesses combine their resources and capabilities to create new value.	Resources Tangible and intangible inputs to value delivery Identify and manage the tangible and intangible resources to enable your value chain.		Relationships Managing interactions to deliver value to previous, current, and potential customers. Customers in some / all of your segments may have expectations about the type of relationship they want to establish or sustain with your business. The type of relationships available may influence the customers' willingness to buy / pay. As a business leader, it can be valuable to find a way to support the objectives the customer has related to those expectations in way that is cost-effective and valuable to both the customer and the business. You can further define the relationship purpose, objectives and resource requirements using the relationship canvas.
Sustain Business and Strategy sustainability
Strategy management Policies and procedures to ensure the strategy is being regularly reviewed, measured, susained and adjusted in response to performance or changes in the external environment. It is important to ensure that the data and procedures to measure KPIs, business drivers and other strategy performance measures are available and those jobs get done. It is valuable to regularly review strategic questions. These questions include: What consumer needs are being adequately met, which ones are not? What technology innovations are emerging / available and what do they mean for the business. What threats is your business managing - how effective are those responses progressing What opportunities is your business managing - how effective are those responses progressing Which competencies are being nurtured and how is the progress on those? Which significant activities are we doing well and need to continue Which significant activities do we need to improve and how will it be done Strategy reviews can result in updates to the Strategic choices or related canvas. Strategy reviews can recorded in the related Strategic choices journal entry to create a permanent record of the review.	Value chain costs Identify and optimise costs Build an understanding of fixed and variable costs in your value chain, plan for ongoing cost-effectiveness Use the costs canvas to describe and better understand your costs and how they fit (or not) into delivery of value.	Revenue models Model generating financial income Add your revenue models used to capture the value from your value proposition. In many cases, your value proposition may have an existing revenue model. You can review these models to investigate whether there are alternatives or additional models that could improve revenue and augment your value proposition.

Strategic choices canvas is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Phase II - StrategyCAD methodology and tools guide

Introduction

Leveling the playing field for leadership teams

Strategic choices methodology guidance trail

Methodology

Using the StrategyCAD™ Strategic Choices canvas

Define aspirations introduction

a. Define customer aspirations

b. Define Business aspirations

c. Key Performance Indicators

d. Business Drivers - Key Activity measures

Making your - Where to play choice

Overview of the Where to Play choice

Which needs

Which customers

Describe and define your industry arena(s)

Identify opportunities and threats

How to succeed

Overview of the How to succeed choice