The three major dimensions of strategy are value, imitation, and perimeter. These dimensions can serve as starting points for strategic initiatives.
Understanding the Dimensions of Strategy
These three dimensions are not just static concepts; they are dynamic elements that can be combined and sequenced in different ways to create unique strategic paths. Let's break them down:
- Value:
- This dimension focuses on creating superior worth for the customer.
- It involves identifying customer needs and providing products or services that meet those needs better than the competition.
- Examples include:
- Offering higher quality
- Providing superior customer service
- Introducing innovative products or services
- Imitation:
- This dimension revolves around replicating successful strategies from competitors, but with subtle improvements.
- It involves learning from others' successes and adapting them to your context.
- It's often more cost-effective than pure innovation, although you may not obtain the first-mover advantage.
- Examples include:
- Improving existing products
- Adapting successful business models for different regions or markets.
- Adopting advanced technology used by competitors to achieve process efficiencies.
- Perimeter:
- This dimension centers on strategically expanding or redefining your boundaries and operations
- This includes expanding the target market, geographic reach or entering into related industries or markets.
- This dimension is about exploring new opportunities.
- Examples include:
- Expanding product lines
- Entering new markets
- Acquiring companies
- Diversifying into related markets
Strategic Development Through These Dimensions
According to the reference provided, these dimensions can form the basis of strategic development. Different sequences of value, imitation, and perimeter can lead to distinct strategic outcomes.
- A strategy might start with value, creating a differentiated product.
- Next, a company might focus on imitation, adapting and improving on the best practices within their market to make their operations more efficient.
- Finally, a company may look to expand its perimeter, seeking to increase revenue or reduce risk by moving into new areas.
The order can change based on the company’s specific goals, environment, and opportunities.
Conclusion
Understanding and utilizing the dimensions of value, imitation, and perimeter can significantly enhance a company’s strategic planning and development, leading to sustained competitive advantage. Each dimension can form the basis of a strategic initiative, and their combination dictates the strategic direction.
