Four kinds of strategy
What is a strategy?
In simplest terms, a strategy is a way of surmounting a challenge to accomplish an objective. Consider the person below. His objective is to be on the other side of the wall. The challenge is the brick wall that stands in the way of achieving the objective. One strategy is to climb over the wall. A second strategy is to dig under it. And a third strategy is to bust through it. Choosing one of the strategies is a matter of deciding which one is the most effective, efficient, and feasible.
What are the different kinds of strategy?
One way of classifying strategies is to divide them into the four kinds you see in the following graphic. Working our way from the inner-most circle out, we can say:
Differentiation Strategy: Differentiation is about being different in a way that causes customers to prefer your offering instead of your competitors’ offerings.
Competitive Strategy: Differentiation is one of two kinds of competitive strategy. The other kind is to be the low-price leader.
Growth Strategy: A competitive strategy, which involves growing market share, is a kind of growth strategy. Other kinds of growth strategies are to expand geographically, expand the product line, buy a competitor, and enter a new industry.
Problem-solving Strategy: A growth strategy is a kind of problem-solving strategy. The usual approach to strategic planning is another kind of problem-solving strategy, where the organization establishes its objectives, identifies the challenges that stand in the way of achieving the objectives, and devises a way to overcome the challenges. I call this an adaptive strategy because it involves an organization adapting to the challenges in its environment.
So, a differentiation strategy is a kind of competitive strategy, a competitive strategy is a kind of growth strategy, and a growth strategy is a kind of problem-solving strategy. Or, in reverse, one kind of problem-solving strategy is a growth strategy, one kind of growth strategy is a competitive strategy, and one kind of competitive strategy is a differentiation strategy. Whichever way you put it, as depicted in the following Venn diagram, all strategies are problem-solving strategies.
Kevin W. Holt, the founder of Co.Innovation Consulting, is a strategic planning consultant and meeting facilitator based in Phoenix, Arizona. He works with commercial, government, and nonprofit organizations to develop innovative strategies and solutions. His strategy consulting and meeting facilitation practice centers on the use of proven processes mapped to collaboration technologies (e.g., electronic brainstorming) and specialized software tools (e.g., the Blue Ocean strategy canvas). The technologies enable him to serve as both an offsite meeting facilitator and a virtual meeting facilitator for strategic planning workshops, innovation labs, brainstorming sessions, feedback sessions, and other types of meetings. Kevin is the author of Differentiation Strategy: Winning Customers by Being Different, published by Routledge in June 2022.