The Four Competitive Business Drivers: Theory + Model + Strategy + Tactics

<jats:p>&lt;p&gt;Sometimes management books achieve a clear-cut distinction between &lt;b&gt;strategy&lt;/b&gt; and &lt;b&gt;tactics&lt;/b&gt;.&lt;/p&gt;&lt;p&gt;Seldom they include the &lt;b&gt;business model&lt;/b&gt; as a &lt;i&gt;third&lt;/i&gt; competitiveness driver.&lt;/p&gt;&lt;p&gt;And never so far, has the &lt;b&gt;theory of business&lt;/b&gt; been considered as a &lt;i&gt;fourth&lt;/i&gt; required performance vector, different from all other three.&lt;/p&gt;&lt;p&gt;However, &lt;b&gt;organizational optimization&lt;/b&gt; requires all four: the &lt;i&gt;why, where, what&lt;/i&gt; and &lt;i&gt;how&lt;/i&gt;.&lt;/p&gt;&lt;p&gt;The &lt;b&gt;theory of business&lt;/b&gt; (Drucker) is the &lt;i&gt;why&lt;/i&gt; the company makes sense. The reality assumptions the organization is grounded upon. What it is paid for.&lt;/p&gt;&lt;p&gt;The &lt;b&gt;business model&lt;/b&gt; (Porter) is the &lt;i&gt;what&lt;/i&gt;: the basic pillars of a firm’s organization. How it transforms client satisfaction into value for itself.&lt;/p&gt;&lt;p&gt;&lt;b&gt;Strategy&lt;/b&gt; (Joffre) is the &lt;i&gt;where&lt;/i&gt;: the choice of 1) geographical areas; 2) industries; and 3) (within them of) segments.&lt;/p&gt;&lt;p&gt;And &lt;b&gt;tactics&lt;/b&gt; is the &lt;i&gt;how&lt;/i&gt;, respecting to the nine functional areas from marketing (Kotler) to human resources; to how to advertise; how to motivate; etc.&lt;/p&gt;&lt;p&gt;Four inferences follow:&lt;/p&gt;&lt;p&gt;&lt;/p&gt;&lt;ol&gt;&lt;li&gt;All four drivers are necessary conditions, none sufficient;&lt;/li&gt;&lt;li&gt;They interrelate, some impacting on others;&lt;/li&gt;&lt;li&gt;They must fit reinforcing each other; and&lt;/li&gt;&lt;li&gt;They should be periodically reviewed (under a sequence of steps).&lt;/li&gt;&lt;/ol&gt;&lt;p&gt;This is illustrated by the book’s &lt;b&gt;detailed examples&lt;/b&gt; of e.g. Nike, Dollar Shave Club, Spotify, SpaceX, Vendôme, Sears, IBM, Apple Music, McDonald’s, Marks &amp; Spencer, Canva, SolarCity, Farfetch, etc.&lt;/p&gt;&lt;p&gt;The &lt;b&gt;fundamental message&lt;/b&gt; is that neglect of any of the four drivers brings &lt;i&gt;efficiency (doing things right – the Phronesis of Aristotle)&lt;/i&gt; at the cost of &lt;i&gt;lower effectiveness (doing the right things – the Chokhmah of Solomon).&lt;/i&gt;&lt;/p&gt;&lt;p&gt;With more and more resources producing less and less, &lt;b&gt;underperformance will follow.&lt;/b&gt;&lt;/p&gt;</jats:p>