What Is Strategy? It’s a Lot Simpler Than You Think
Harvard Business Review・2 minutes read
Strategy involves creating value for a company by planning for the future, with value being the difference between willingness to pay and sell. Ways to increase value include improving product quality, complements, and network effects, while attracting talent can be achieved by making jobs more attractive to lower willingness to sell.
Insights
- Strategy is a simple plan to create value for a company by looking forward and planning for the future, involving understanding and optimizing the difference between willingness to pay and willingness to sell.
- Best Buy's successful turnaround focused on increasing customers' willingness to pay through improvements like better shipping times and lowering vendors' willingness to sell by enhancing employee engagement and knowledge, showcasing the importance of balancing these factors for overall value creation.
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Recent questions
What is the essence of strategy?
A plan to create value for a company.
How is value defined?
The difference between willingness to pay and sell.
What factors influence willingness to pay?
Product quality, complements, and network effects.
How can companies attract talent?
By offering competitive pay or making the job more attractive.
What was Best Buy's successful strategy?
Increasing customers' willingness to pay and lowering vendors' willingness to sell.
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