Everyone wants to develop a strategic advantage. Yet, few people could articulate what that would mean in practice.

They might think, “I know a strategic advantage when I see it.” However, even if that’s true, it doesn’t enable them to create one.

Most companies spend a lot of time and money developing their business strategy each year. The goal is always to gain a strategic advantage. It just rarely happens.

So, let’s go through what a great business strategy is, what makes it exceptionally good in practice (why aim for less?), and how you can create one with relatively little effort.

What is a good business strategy?

Roger Martin has one of the best definitions for strategy I’ve come across:

A strategy is a “set of choices that positions you on a playing field in a way that you win.”

To clarify: your business strategy has two components, which together give you a strategic advantage:

• The “playing field” you choose to play on
• The advantage you have on that playing field, which enables you to win

Although I think that’s a good definition for a business strategy, it’s still a bit impractical.

Ultimately your business strategy should make it easy for you to make decisions in a way that leads to consistent growth by leveraging your strategic advantages. So, let’s dig into the components of strategy to see how to get them right.

How to choose the right playing field

You want to compete on a playing field where you naturally have a strategic advantage. The alternative is like rock climbing with one arm; even if you reach impressive heights, you’ll still be massively behind the competitors with a natural advantage over you.

In business, winning means that people buy from you.

That means the “playing field” is people’s minds because that’s where the rules are set and the game is played. However, saying, “our playing field is in people’s minds” would be like saying, “I compete in sports.” You gotta be more specific.

So, instead of “people,” your playing field is in your target customers’ minds.

To gain a natural strategic advantage, you need to choose a target customer that sees things in a way that makes you their preferred choice. Or to continue the sports metaphor, choose a playing field where the rules favor you.

For example, if your product has feature X, then choose a playing field where X is highly valued. Or if you have to do Y to deliver your service, then avoid a playing field where you get penalty points for doing Y.

This may sound like typical target customer or buyer persona exercises, but those don’t usually help much. Things like people’s job titles, company sizes, or hobbies rarely affect whether they’ll naturally want to buy from you or not. (However, those things help you with other decisions, such as where to do marketing.)

Consider what shapes their perspective to the problems you can solve and the goals you can help them achieve. That includes things like what they expect, what they’ve tried before, and what alternatives they’re aware of.

For example, one service company struggled to grow for years because they looked like a generic option. The clients they got were happy. But because their process seemed like a more complex version of what every similar company offered, they usually lost potential clients to more established providers. After going through how they delivered their services, it was clear that they had several differentiators that they had never seen as meaningful. They hadn’t identified (or even looked for) a playing field (target customer) where those differences would give them a strategic advantage. So, they had never built their marketing or operations to highlight those differences. When they did, they became one of the best-differentiated companies in their industry.

That’s not an unusual case. Even in highly competitive industries where everyone offers essentially the same products and services, I’ve yet to come across a company where we couldn’t find/develop a significant strategic advantage for them — one they can easily use in practice.

Additional note: The process for identifying the ideal target customer often reveals additional untapped markets where you’d naturally have a strategic advantage. Expanding into those is profitable far more consistently than typical market expansion because of the advantage.

How to identify/develop a strategic advantage

The first part of developing a winning business strategy is choosing the playing field where you have a natural advantage.

The other part is understanding what it actually takes to capitalize on that advantage in practice. If you can’t articulate how to do it, you can’t do it consistently.

You can do this in two stages. That makes it a much faster process and guarantees practical impact, whereas most strategy exercises never make much of a difference to profit.

First clarify what are the most impactful things you could communicate, so your target customers want to buy. Roughly put, that means two things:

• Show they can get something that motivates them to buy.
• Show how your offer is different compared to their alternatives in a way they care about.

Once you know exactly what to communicate to have the most impact, a full strategy isn’t far away. The messaging itself does much of what a good strategy should do (“makes it easy for you to make decisions in a way that leads to consistent growth”).

For example, we built one company’s messaging around how much time companies could save by switching to our software. However, validating that the software worked as promised would take the customer a lot of time, which didn’t exactly align with the promise, “save time.” So, when we built the messaging around saving time, it was easy to prioritize developing a new, faster way for people to test the software. We didn’t need a formal business strategy to be able to make the product development decision. Also, by making the testing experience quicker than expected, it made the marketing message more believable because it was about saving time, too.

The fastest way to gain a strategic advantage

The key is to start from the practical side. It nearly guarantees that you see a significant measurable increase in profit while most strategies are hard to put into practice and even harder to measure.

Figure out what exactly you could communicate (with marketing and otherwise) to make the most sales. That means choosing the playing field (target customer) that gives you a natural advantage and identifying what you need to actually do to capitalize on that advantage.

In other words, develop your Stand Out Message, and you’ll know what to focus on in marketing to make a real impact. It also guarantees that your marketing is cohesive and memorable across campaigns and platforms.

In most cases, it takes 2-3 weeks (4-5 hours of your time during calls/meetings). We can refine it into a full strategy with a bit more time.

You can read more about how you can get your own Stand Out Message here.