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The Essential Advantage: How to Win with a Capabilities-Driven Strategy

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How to have a coherent capabilities-driven strategy

By John Gibbs - December 9, 2010

A "coherent company" is one that is resolutely focused about its "way to play", its most distinctive capabilities, and its product and service portfolio, according to this book by Paul Leinwand and Cesare Mainardi. When all three of these elements are in sync with each other and with the right external markets, the company can claim the "right to win" in the contests that matter over time.

Most companies are not fully coherent because they do not have a clearly defined capabilities-driven strategy. In response to market demands and opportunities, they start offering products and services which are not a good fit with their core capabilities, and this leads to incoherence and ultimately to reduced profitability.

The authors propose a process for an organization to make strategic choices. First, discover the available choices through market investigations; next, assess each "way to play" or market positioning option, and what capabilities are required for each to... read more

Perfect timing for an outstanding book

By Rudra Chatterjee - November 17, 2010

"Essential Advantage" follows the book "Cut Costs - Grow Stronger" but really expands the scope to demonstrate how identifying, honing and applying your business capabilities not only is the right way to cut costs, but also the best way to approach growth strategies and M&A. This book has been revelatory to my business, because it identifies that the steps I am now taking to reduce costs and restructuring the key business streams can later be expanded while contemplating growth opportunities. Theoretically, the book does have some parallels to "Competition Demystified" by Greenwald, but given the author's deep business experience, it is a more actionable and broader study of business strategy. I read the Kindle edition of the book and am excited to put these thoughts to work.

How to achieve coherence

By Sean Smith - February 20, 2011

In this thought provoking book, Paul Leinwand and Cesare Mainardi argue that the essential advantage in business is coherence, all other forms of advantage that a business can enjoy are transitory, and provide their prescription for how a business can become strategically coherent.

In order for a business to become strategically coherent three factors need to come together, according to Paul Leinwand and Cesare Mainardi.

1. A business must have a clear way to play i.e. a considered approach for creating and capturing value in a particular market, in a way that differentiates it.

2. A business must have three to six mutually reinforcing capabilities i.e. a capability is the ability to reliably deliver a specified outcome that is relevant to the business.

3. A businesses products and service must fit its capabilities and way to play.

In essence, a strategically coherent business identifies its underlying value creation mechanism... read more

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