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Classical Strategy

Your Strategy Needs a Strategy

What

Classical strategy is based on achieving sustainable competitive advantage by positioning a firm optimally in an attractive market. Since the basis of competitive advantage in these environments is known and nonmalleable, advantage can be based on superior scale, differentiation (or, equivalently, scale within a narrower market segment), or superior capabilities.

When

Firms should deploy a classical approach in relatively stable and predictable markets with established, fixed bases of competition. In these nonmalleable markets, there is limited imminent risk of disruption, and industry conditions can be considered as given. Among the environmental signs that a classical approach can thrive are well-established industries with high returns to scale; stable, homogeneous business models; and modest growth rates.

How

Classical strategizing is a three-part process that consists of analysis, construction of a plan, and rigorous execution. The analysis is focused on the attractiveness of a market, the basis of competition, and a firm’s competitiveness. The resulting plan forecasts those factors, articulates the targeted position, and maps the steps to achieve it. Classical firms implement their plan exactly.

Companies using a classical strategy analyze, select, and plan the exploitation of a preferred strategic option. This mechanism is not restricted to the business world, however. White rhinoceroses exhibit the same characteristics with their foraging behavior.

White rhinos have evolved to prefer eating a significantly restricted selection of plant species, focusing on as few as 20. As a result, rhinos must secure territory rich in the specific mixture of plants that they prefer. Mirroring the classical analysis phase, a rhino bull first invests in finding a good feeding ground. Once the territory has been identified, it scent marks: the bull drops his dung in up to 30 well-defined piles, essentially staking out a position to exploit. The bull then patrols his turf and signals his reach by wiping his horns on the ground or bushes to repel potential competitors while he executes his strategy—that is, enjoys his food.

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