To Decide Where to Grow Next, Pinpoint What Makes Your Company Different 30/03/2024, 1:50 PM

Corporate Strategy

To Decide Where to Grow Next,

Pinpoint What Makes Your
Company Different
by Dan McKone

March 08, 2024

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Summary. In the ever-changing world of corporate growth, the mastery of
‘strategic clarity’ has become a pivotal element for success. Companies like
Costco, Salesforce, Amazon, and Patagonia demonstrate the power of
understanding and capitalizing on unique market... more

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To Decide Where to Grow Next, Pinpoint What Makes Your Company Different 30/03/2024, 1:50 PM

As companies set their growth strategies, they could go down

many potential paths. Should a company that makes smart
fridges expand into industrial cooling? Smart, connected
doorbells? Or perhaps consider a “product as a service” model
where customers pay a subscription fee for their refrigeration
needs rather than owning the fridges outright?

The companies that seem to always know the right answer to

“what’s next?” benefit from what I call strategic clarity. The key to
strategic clarity is in pinpointing what truly differentiates a
company in its market. This isn’t just about what a company does
well. It’s about identifying what it does uniquely better than its
competitors. These defining assets, often rooted in an
organization’s culture and highly valued by customers, are
challenging for rivals to replicate.

Consider Costco, a titan in the retail sector. At first glance, its

success formula might seem straightforward: selling in bulk at
low prices. However, there’s more to it than that. Costco’s mastery
is in understanding cost leadership, a holistic approach to
operating efficiently that goes beyond merely cutting prices. Once
you understand this, it becomes clear that the decision to expand
into organic foods isn’t a departure from Costco’s strategy but a
reinforcement of it. The company recognized a growing consumer
trend and found a way to integrate it into its low-cost model. This
move allowed Costco to capture a new market segment while
staying true to its strategy.

Now, shift focus to Salesforce, a beacon in the customer

relationship management software industry. The innovative
technology that Salesforce is known for is borne out of the
company’s acute grasp that businesses yearn for closer, more

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To Decide Where to Grow Next, Pinpoint What Makes Your Company Different 30/03/2024, 1:50 PM

intuitive relationships with their customers. By continuously

evolving its offerings to meet these needs, Salesforce doesn’t just
sell software; it sells a vision of customer relationship
transformation. The company’s strategy is shaped around this
understanding, making every decision — from product
development to marketing — a reflection of its core competency.

And then there’s the behemoth, Amazon. Known for turning the
e-commerce world on its head, Amazon’s foray into cloud
computing with Amazon Web Services may have looked like an
arbitrary diversification at first. Instead, it was a calculated move
based on the company’s existing technological prowess. Amazon
took what was essentially an operational asset — its vast
technological infrastructure — and transformed it into a new
business frontier. By leveraging its inherent strengths, Amazon
created a new revenue stream while carving out a dominant
position in a burgeoning market.

As we consider these examples of strategic clarity in action, one

might wonder how to embed such a deep-seated strategic focus
into the very fabric of a company’s operations. How can
organizations not just plan strategically but live their strategies in
every decision and action? The answer can be found through the
case study of Patagonia, a brand that exemplifies the embodiment
of strategic clarity in its purest form.

Patagonia stands out not just as another example of strategic

clarity, but as a testament to the practical application of this
concept. Going beyond the broad strategic strokes painted earlier,
Patagonia exemplifies how a company can live its strategy day in

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To Decide Where to Grow Next, Pinpoint What Makes Your Company Different 30/03/2024, 1:50 PM

and day out. This is a brand that has committed every facet of its
operation to sustainability and ethical practices, from the
allocation of capital to the focus of its talent.

Patagonia’s journey illustrates the real challenge of strategic

clarity: It’s not just in making the strategic choice but in the
commitment to that choice through the focused deployment of
resources and personnel. It requires a continuous effort, where
every product developed, every supply-chain decision made, and
every marketing message broadcasted aligns with the core
mission of environmental conservation. This alignment is not
coincidental but the result of a disciplined approach to strategy
that permeates the entire organization. It shows that the path to
implementing strategic clarity is paved with the rigorous
application of resources and a steadfast focus on the strategic
directions chosen.

To translate strategic clarity into action, companies should

embrace a Patagonia-like approach: Identify your unique value
proposition, align every decision with this core identity, and
commit resources to sustain this direction. Whether it’s steering
talent towards innovation that matches your strategic goals,
aligning your supply chain with your ethical standards, or
crafting marketing messages that resonate with your core
mission, the key lies in consistent and disciplined execution. This
not only sets you apart in a crowded market but also builds a
brand that is synonymous with its values, driving growth and
greater customer loyalty.

In a competitive environment, the path to sustainable growth

transcends planning; it demands strategic self-awareness and
boldness to embrace what truly sets your company apart. Such

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To Decide Where to Grow Next, Pinpoint What Makes Your Company Different 30/03/2024, 1:50 PM

integrity, rooted in a deep understanding of your unique

strengths vis-à-vis broader market dynamics, guides tough
decision-making, and cements your place as a leader in your field.
As we’ve seen through the lenses of Costco, Salesforce, Amazon,
and most notably Patagonia, embodying strategic clarity is not
just about choosing; it’s about living those choices every day,
aligning every aspect of your operation with your core mission.
This dedication to strategic clarity, where every decision
reinforces your unique value proposition, is what differentiates
true market leaders from the rest, ensuring their success and
leadership endure.

Dan McKone is a managing director and

partner at L.E.K. Consulting and serves as
L.E.K.’s chairman of global innovation, helping
to incubate and scale new service lines for the
firm’s clients. He is coauthor of Edge Strategy:
A New Mindset for Profitable Growth (HBR
Press 2016).

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