Managing a company’s investment choices can be challenging unless you understand the broader context. As in poker, how the game will turn out depends largely on who’s sitting at the table, what cards they’re holding, and how much they can afford to risk.
Many executives primarily frame their strategies in terms of industry. But as competitive boundaries shift, companies with quite different business models and economics could end up competing to serve similar market segments. How any of them will fare depends on their value pattern.
A value pattern describes how a company’s position at a given point in time will shape the range and types of strategic moves that are most likely to create value in the future. (BCG has identified ten distinct value patterns that cross industry boundaries. To see the list, click here.)
Value patterns don’t represent an instant recipe for success. But by identifying its current value pattern, a company can create a more effective value creation strategy. Put another way, knowing your value pattern won’t necessarily tell you what to do, but it will tell you where the odds for success are better.