The Strategy Diamond was introduced by Don Hambrick and Jim Fredrickson in 2001. This model give the executives the possibility of have an holistic vision of the strategy instead of in isolation. It is similar to a checklist because of it is made by a series of questions. Answering these questions you will have a correct strategy. Questions are divided into five blocks that are called Elements of Strategy.
The Five Elements of Strategy are :
- Arenas – “Where will we be active and with how much emphasis?”: Which core technologies? Which geographic areas? Which market segments? Which product categories? Which value-creation stages?
- Vehicles – “How will we get there?” Acquisitions? Joint ventures? Internal development? Licensing/franchising?
- Differentiation – “How will we win?” Customization? Image? Price? Product reliability?
- Staging – “What will be our speed and sequence of moves?” Speed of expansion? Speed of initiatives?
- Economic Logic – “How will we obtain our returns?” Lowest costs through scale advantages? Lowest costs through scope and replication advantages? Premium prices due to unmatchable service? Premium prices due to proprietary product features?