Marketing Profs

The Old

The old, customary procedure of strategy development has a pure and sound logic. It has been designed to answer the question, What is it that we should do in order to achieve our goals?

The process essentially involves three stages:

1. Where are we now? 
2. Where do we want to be? 
3. How are we to get there?

This process is based on Gap Analysis. Supposedly, the competitor who manages to execute it better and more wisely (and also carries out the strategy with consistence and persistence)—will be the one who achieves competitive advantage over the rest of the market.

I claim that this time-honored process is no longer adequate and is insufficient in the current competitive environment. It does not help managers steer their organizations in the direction of success and profitability. I call it “Wishful Strategizing.” Its outcome is—more often than not—failure, and the consequence is that executives lose faith in strategy-making altogether.

What is wrong with the classic process?

Before all else, its basic assumptions are erroneous:

Assumption No. 1: We know our goals

How do we set our goals according to the old process?

In the worst but not infrequent case, goals are based on the degree of managerial ambition or aggression—with no true reference to reality. In the better case, it is by evaluation of potential. Our evaluation of potential is based on the current situation and on consumers' answers to market research questions. However, the real potential—that which we cannot see while adhering to this approach—is based on “what could be.”