A fundamental approach to strategy development

The problem of developing sound business strategy is probably more difficult now than it has been at any time since the war. In the midst of conflicting pressures of inflation, recession, unemployment, business failures, and social and political upheaval, today's businessman faces an environment which is both unfamiliar and uncertain. The lack of predictability concerning economic affairs can make it seem impossible to plan effectively for the future. Yet without sound strategy today, corporate survival itself may be called into question. What should be done?In this, the first of two articles, the author suggests that the key to strategy development now is to focus more than ever before on ‘fundamentals’. For the individual business, market share appears to be paramount, as is shown by the ‘experience curve effect’, a concept developed by the Boston Consulting Group in the course of its international work in advising companies on corporate strategy problems. Relative competitive position thus becomes the required simple but fundamental strategic goal. However, the quest for a superior market share must take place within the confines of an appropriately defined strategic business segment.In a further article in the February 1977 issue of LRP the author will go on to expand these conclusions concerning individual businesses, considering their implications for the sound development of strategy for the multi-business company.