The Strategy Palette
One of the biggest changes in business over the past decade has been an increase in the diversity of business environments.
Boston Consulting Group (BCG)
One of the biggest changes in business over the past decade has been an increase in the diversity of business environments, ranging from stable to highly unpredictable, fixed to highly malleable, favorable to harsh.
To succeed, leaders need to match their approach to strategy with their business environment.
To facilitate this, BCG created the Strategy Palette, Let's explore how it works with a simple example.
Classic Environment
Your lemonade business is in a stable and predictable environment.
Use the classical approach: analyze, plan, execute.
Joggers are your best customers, so position your stand along the trail and become the biggest lemonade business in town.
Adaptive Environment
Uh-oh, freak storms.
You can't predict the weather, so forget planning.
Try the adaptive approach.
As the storm clouds move, so does the best spot for your stand.
Experiment to track your customers and become the most agile player in your uncertain market.
Visionary Environment
People are bored of lemonade stands on quiet streets.
You need to revive your business with a visionary approach.
Remember the bus stop by the park?
It's dingy, but has the most potential customers, give it a sweep, fresh paint, decorations. Be persistent, nice lights.
Now, people will line up for your pioneering project.
Shaping Environment
Uh-oh, jealous grown-up competitors say kids shouldn't put so much energy into lemonade.
Regulation may be in the works.
You need to shape your environment, orchestrating events to your eventual advantage.
Tell customers about the crackdown to gain support and promote your new Street Vendor Finder app.
In return, your new vendor network will push your product.
Renewal Environment
Red Alert: the lemon crop has been ruined by caterpillars.
Time for renewal.
Cut back and save your allowance.
Then pick a new growth strategy, say, a visionary idea.
Sell seasonal drinks like pumpkin spice lattes, hot cocoa, and green smoothies.
To succeed, leaders must choose the right approach at the right time in each part of the business, selecting and refining the collage of approaches to stay tuned to changing environments.
Reference
(n.d.). Your Strategy Needs a Strategy. bcg.
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