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Classical 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.

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