It is not uncommon in business to hear, “We need a strategy” or “We need to update our strategy.” And by “strategy,” people are usually referring to a clear, over-arching statement of the choices a company is making regarding why, how, and where to use its limited resources. That strategy is what should be guiding the company’s more near-term, ground-level tactics and executions.
However, what is often missing from this conversation about the need for a strategy is the critical follow-up question, “Which strategy?” There are, in fact, a multitude of different types or levels of strategy (think sales strategy, supply chain strategy, etc.). But from that multitude, there are three fundamental types of strategy that a company must explicitly define in order to drive healthy, sustainable growth. In order of priority, those three types of strategy are:
1. Enterprise strategy: This is the articulation of how the overall company will win in the marketplace. The enterprise strategy should clearly and concisely state where the company will (and will not) compete and should delineate the company’s unique sources of competitive advantage. Bottom line, the enterprise strategy should clarify what the company will do differently from competitors to create unique value in the marketplace.
2. Brand strategy: The brand strategy clarifies the company’s intended position(s) in the marketplace and in the minds of its target consumers or customers. The two key elements of a brand strategy are brand positioning (i.e. market position) and brand architecture (i.e. relationship of a company’s brands to each other). The brand strategy supports and ladders up to the enterprise strategy because a company’s brand strategy is part of the “how” a company will win in the marketplace.
3. Marketing strategy: The marketing strategy describes how the company will most effectively serve and reach its target audiences. Marketing strategy covers both product marketing and marketing communications, therefore this strategy must highlight the most effective offering and subsequent communications approach, given what is most important to the target audiences. (Note: within the marketing strategy, offering design comes before communications, because a company needs a value proposition to communicate. See Jane Alpers’ article on that important point here.) The marketing strategy supports and ladders up to the brand strategy because a company’s marketing strategy is part of the “how” a company will secure and maintain its intended position in the marketplace.
Usually, organizations can do a better job of explicitly defining and then communicating those three key strategies. Consider for a moment how well your own company has spelled out its enterprise, brand, and marketing strategies. Does the enterprise strategy reflect clear choices that the company has made about where it will or will not compete? Does the brand strategy clearly state the company’s desired position in the marketplace and in the target audience’s minds? Does the marketing strategy highlight the most effective offering and communications approaches, given the target audience?
And if those strategies have been defined, how well aligned are they to each other? Does the marketing strategy ladder up to the brand strategy? Does the brand strategy ladder up to the enterprise strategy?
If you believe that there is work to do here, then the time to address that gap is now, due to serious consequences of misaligned or partially baked strategy (e.g. focusing on the wrong priorities, targeting market segments that do not play to a company’s strengths). That risk of “bad” strategy is captured well in the following German proverb that states, “What’s the use of running if you are not on the right road?”