BUSS3 A* Evaluation - Strategy is Choice – Where to Play and How to Win

When it comes to understanding business strategy, I’m a firm believer in keeping things simple. And here’s something very simple to remember when evaluating the strategies being considered by the case study firm and management in the BUSS3 exam.

There are only three words you need to remember about strategic decision-making…

“STRATEGY IS CHOICE”

Actually, let’s give you two more short phrases to use that explain the nature of the strategic choices faced by firms:

Strategic choice can be summarised into two more, simple decisions:

The first question – Where to Play? – is essentially about which markets (and segments) the case study firm wishes to compete in. When looking at the case study evidence, think about factors such as:

· Target markets – how big are they, how fast are they growing and does management have these clearly defined and understood?

· Customer needs and wants – how are the target markets segmented?

· Differentiation – to what extent will the business need to differentiate their product or service in order to appeal to the target customer base?

The second question – How to Win? – is all about what the business needs in terms of competitive advantage. For example, does the case study business:

· Have a product proposition that distinguishes the business in eyes of target customers (e.g. why do customers increasingly prefer to buy their goods from Amazon.co.uk rather than high street retailers?)

· Have the capabilities (assets, people, resources) that enable it to deliver that proposition?

I think this way of summarising the nature of strategic choice fits quite nicely with a key model for BUSS3 students - Porter's Generic Strategies. I have overlaid how I think the two questions fit with the model as follows:

When you read through the BUSS3 case study, bear these two phrases in mind.

• In terms of decisions about corporate objectives, markets etc – where do management want to play?
  
• And taking a look at the strengths and weaknesses of the business, do you think it has the capabilities to win? If not, what will it take to give the firm a fighting chance of success?
  

A great point to make in your exam answers is that “strategy is choice”. The challenge for management is to pick the right game to play and play to win!