#32 A Definition of Strategy feat. Tradeoffs

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Strategy is deciding how to compete. It involves making strategic choices including what to do, and what not to do. Choosing how not to compete is as important as choosing how to compete. All of the decisions in these categories result in tradeoffs. The key is finding the maximum spread between the costs of the tradeoffs with the benefits received. Cost can mean financial, time, or opportunity costs.

The link to creative strategy is to consider long-term affects of the choices across the whole brand. One example from class is SB’s story about a coffee business strategy to save millions by using 1-ply toilet paper in store restrooms. SB’s creative strategy included the effect of the 1-ply on customer perception of the brand, which would have been lowered. He chose suggested to look for internal savings that the customer would not be able to see, feel, or touch externally. The trade off here was not saving millions in toilet paper costs, but the benefit was maintaining customer perception of the brand.

Porter, E. Michael, “What is Strategy?” Harvard Business Review, November-December, 1996. p. 61-78.