Purpose
Explain why great companies succeed not just by doing things well, but by making disciplined choices about what not to do. Strategy is the system of decisions that defines how a company competes, while positioning defines the space it occupies in the customer’s mind.
Core Principle
Great Companies Win Through Clear Strategic Choices and Distinct Market Positioning
Strategy is not complexity — it is clarity.
Positioning is not marketing — it is identity.
Great companies understand their strengths, define their focus, and consistently align their actions with their chosen direction.
What This Driver Means
Strategy is the integrated set of decisions about:
what the company is trying to achieve
which customers it serves
which needs it satisfies
what capabilities it will build
what it will ignore or avoid
Positioning is how:
customers perceive the company
the company differentiates itself
the company communicates its promise
Both determine how the business competes.
The Four Components of Effective Strategy
1. Clear Value Proposition
What unique benefit do we provide, and to whom?
Great companies define:
Strategy begins with clarity of value.
2. Strategic Focus
Choosing what not to do.
Great companies avoid:
chasing every customer
entering every adjacent market
pursuing every opportunity
excessive product complexity
Focus concentrates resources and strengthens differentiation.
3. Coherent Activity System
Aligning actions across the organization.
Effective strategy means:
operations support the value proposition
culture reflects the strategic goals
product decisions reinforce differentiation
distribution matches customer needs
All activities reinforce one another.
4. Long-Term Orientation
Positioning the company for durable success.
This includes:
resisting short-term temptations
prioritizing customer trust
investing in capabilities
maintaining standards
avoiding fads
Great companies play the long game.
The Four Components of Strong Positioning
1. Simplicity
The company stands for one clear, memorable idea.
Examples:
2. Differentiation
The company occupies a unique space competitors cannot copy easily.
Examples:
Southwest: low-cost, no-frills, single aircraft type
Chick-fil-A: quality + hospitality
3. Consistency
The message matches the experience.
Examples:
4. Relevance
The position matters to customers and solves a real need.
Examples:
Why Strategy Matters
Strong strategy:
guides resource allocation
focuses innovation
prevents distraction
strengthens competitive advantage
increases execution speed
improves consistency
supports long-term profitability
A clear strategy reduces noise and increases organizational clarity.
Why Positioning Matters
Strong positioning:
shapes customer expectations
improves marketing efficiency
increases pricing power
strengthens loyalty
enhances brand equity
improves product-market fit
Positioning is the story customers tell themselves about the product.
Examples of Strategy & Positioning Excellence
Costco — Do Less, Do It Better
Low margin, high trust, limited SKUs, membership model.
Southwest Airlines — Simplicity + Cost Leadership
Single aircraft type, direct routes, quick turnarounds.
Chick-fil-A — Quality + Experience Focus
Limited menu, exceptional service, operational consistency.
These companies outperform because they built disciplined strategies and stuck to them.
Why This Driver Matters
Strategy and positioning determine:
where the company competes
how it competes
what capabilities it builds
what customers it targets
how it differentiates
how it allocates resources
Without strategy, a company drifts.
Without positioning, it blends in.
Why This Comes After Moats & Competitive Advantage
Moats protect competitive strength.
Strategy directs competitive strength.
The progression continues:
Insight
Product
Business model
Unit economics
Distribution
Operations
Culture
Moats
Strategy & Positioning ← this gives direction to all previous drivers.
Strategy ensures the company grows intentionally, not accidentally.
