Strategy Diamond - Explained
What is the Strategy Diamond?
Written by Jason Gordon
Updated at April 7th, 2022
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Table of Contents
What is a Strategy Diamond?What are Arenas? What are Differentiators? What is Economic Logic?What are Vehicles?What are Staging and Pacing?What is a Strategy Diamond?
The Strategy diamond seeks to identify the components that make up an organizations strategy and present it in a logical format that allows for understanding and interpretation of how the components interact to make up the strategy.
There are several facets (or parts) to any strategy. This parts are presented in a diamond shape. There is no presupposition that a particular theory should dictate the contents of each facet.
Back to: STRATEGY & PLANNING
What are Arenas?
Strategy matches up market needs and opportunities (located in arenas). This can be geographic market, product market, or some arena on the value chain.
It is important to be very specific when describing arenas. You can do this by answering the following questions:
- Which product categories will we compete in?
- Which channels will we use?
- Which market segments will we target?
- Which geographic areas should we target?
- Which core technologies will we use?
- Which value-creation stages will we emphasize?
When specifying these arenas it is important to emphasize their importance.
What are Differentiators?
These are unique features of the firm that set it apart from competitors or offerings by competitors.
Some common methods of differentiation include:
- Price
- Quality
- Customization
- Reliability and durability
- Speed to market
- Speed of product updates
- Customer service
What is Economic Logic?
Economic logic concerns the yield of positive performance - how the firm makes money or grows. It involves a combination of social, environment, and financial profits.
What are Vehicles?
Vehicles refer to how you might pursue a new arena. It may be through organic means, augmentative means, cooperative means (through a new partner), or through acquisitive means (merger, combination, acquisition).
Will the organization grow organically, acquisitively, or through a combination of both.
Examples of vehicles include:
- Joint ventures
- Acquisitions
- Licensing
- Partnerships
- Franchising
- Build in-house
What are Staging and Pacing?
Staging and pacing regards the sequence of strategic activity and the speed at which those activities are undertaken.
It helps to reconcile the designed and emergent portions of your strategy.
Related Topics
- Business Performance Measurement
- Benchmarking
- Balanced Scorecard
- Economic Value Added
- Activity-Based Management
- Quality Management
- Action Profit Linkage Model
- Business Activity Monitoring
- Gap Analysis
- Strategy Diamond
- BCG Growth-Share Matrix
- GE McKinsey Matrix
- Value Reporting Framework
- Pyrrhic Victory