The Strategy Diamond offers a clear, multi-dimensional approach to strategy formulation. The model, developed by Donald C. Hambrick and James W. Fredrickson, proposes five key elements: Arenas, Vehicles, Differentiators, Staging, and Economic Logic.
Arenas define where the organisation will be active, encompassing markets, products, technologies, and geographic areas. Vehicles represent how the organisation will get there, including internal development, joint ventures, licensing, and acquisitions. Differentiators identify what will make the organisation unique in its chosen arena, such as image, customisation, price, or product reliability.
Staging involves the sequencing of actions, determined by resources, urgency, and credibility. Economic Logic outlines how the organisation will obtain returns, considering factors like low cost through scale advantages or premium prices due to unmatchable service.
The Strategy Diamond encourages an integrated, comprehensive view of strategy, highlighting the need for all elements to align and support each other. It underscores the importance of considering both where and how an organisation will compete, how it will differentiate itself, when and in what order actions will occur, and how returns will be achieved.
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