You may be familiar with business-level and corporate-level strategy. Business-level strategy is strategy at the level of a business unit or a smaller organization and it is mostly concerned with creating a single clear direction for that unit or organization.
Corporate-level strategy concerns strategy of large multi-unit organizations. It is typically about managing a portfolio of businesses, creating synergies between them and about mergers and acquisitions.
While these levels of strategy are important, there is a third, and increasingly quintessential level at which strategy is needed in today’s volatile, uncertain, complex and uncertain (VUCA) world: offering-level strategy.
An offering is a product or service offered to a specific market. You may also call it a product-market combination, a value proposition, or simply a product or service. I prefer the term offering because it is a simple term covering exactly what is meant, especially the idea that you offer some product or service to the market.
There are at least
six reasons why strategy needs to take place primarily at the offering-level. They are:
- Your organization consists by and because of its offerings. You create value through your products and services. As such, they are your main reason of existence.
- You sell and compete with offerings. You only have customers and competitors at the level of offerings. That is what they buy and compete for.
- You make your money through your offerings. Your offerings is what is being paid for, not what your organization looks like or wants to achieve.
- Different offerings require different strategies. Even though you may have overarching business-level and corporate-level strategies, any offering needs its own particular strategy.
- Offering-level strategy is flexible. In today’s fast-changing environment, you need to adapt to changes all the time. Strategy at the offering-level allows you to manage your organization as a fluid portfolio of offerings.
- Only at the offering-level can you make strategy concrete enough to execute. At any higher-level, strategy is about averages and generic ideas—which are notably hard to execute.
Moving from business-level and corporate-level to offering-level strategy as primary level of strategy is quite a change in paradigm. We are used to thinking that strategy is about overarching ideas and generic directions for the organization.
Descending to the level of offerings may seem way too detailed and operational. And it may look especially unstrategic. But that is exactly what the core of offering-level strategy is: acknowledging that the heart of business is creating offerings for customers that create unique value for them that is different from the competition.
