A Winning Strategy

A winning strategy must satisfy three conditions:

1) The Fit Test determines how well a strategy fits the company's current situation.

A strategy must correspond with the industry, competition, market opportunities and any other factors that affect the company’s business (this would illustrate an external fit). Also, a strategy must meet internal requirements of the business (internal fit) in order to be successful. This will include resources, competitive capabilities and managing functions (operations, sales, marketing, administration etc.). Moreover, a winning strategy must also demonstrate a dynamic fit which develops around company’s needs and evolves over time as external and internal conditions change.

2) The Competitive Advantage Test determines if a strategy will help to achieve a long-term competitive advantage for the company.

If a strategy does not help to achieve a sustainable advantage over competition, it will not last and will essentially be waste of time. A winning strategy will provide a long-term advantage over competition.

3) The Performance Test determines if a strategy is producing good performance for the company.

The most important indicators of performance measurements are “profitability and financial strength, and competitive strength and market standing” (p.14). A winning strategy ensures that a company performs at a higher level across the market, has a bigger part of the market share, and is profitable and competitive.

An example of good strategy is John Deer’s, a company that manufactures agricultural and construction equipment in 15 countries, and despite the economic downfall has maanged to increase revenue and market share. Robert Lane, chief executive officer of the company states that the following six components of John Deer’s manufacturing strategy are the key to success:

1. Strong links with the market.

2. Rigorous financial discipline.

3. Balanced investment approach

4. Multiple “home markets” plus...