Five Tests of a Good Corporate Strategy 

1. A Unique  Value Proposition Compared to Other Organizations

A distinctive mix of products or services to a defined set of customers. The company’s strategy must enable it to deliver a different value proposition, or set of  benefits, from those offered by competitors.   You want to answer the question:  What value do they bring to the customer?

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2.  A Different, Tailored Value Chain

To establish a sustainable competitive advantage, a company must perform different  activities or processes than rivals or perform similar activities or processes in different ways .  You want to answer the question: What Does a company do to add additional features or services to add value?

3.  Clear Trade-Offs

A sustainable strategy must involve “trade-offs.” The company must forgo some product features, services, or activities in order to be unique .  You want to answer the questions:  what does a company choose to do or not do compared to competitors?

4.  Activities that Fit Together & Reinforce Each Other

An effective strategy involves  fit across different activities in the value chain, so that the company’s activities are mutually reinforcing. The way a company’s product is designed, for example, can reinforce the efficiency of how it provides after –sale service.  You want to answer the question: What other activities tie to other activities that lead to synergy or help each other?

 5.  Continuity over time

A sound strategy involves continuity of direction. A clear strategy makes change more rapid and effective .    You want to answer the question:  What does the company have or do that allows it to continue its success?

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