Good Strategy Bad Strategy 10: Focus (Richard Rumelt)

In order to analyse another company's strategy, Prof Rumelt says you need a rich knowledge of facts and well developed skills in logic, deduction and induction. 

Don't just believe everything you read in the magazines and newspapers. Do your own research, ask the critical questions identify patterns. 

Don't forget to look at the competition as well. What are they doing similarly? What are they doing differently?

He says to "look at each policy of the company and noticing those that are different from the norm in the industry. You then try to figure out the common target of such distinctive policies. What are they coordinated on accomplishing?"

What's the result the company will produce if they execute these policies correctly? What kind of customer benefits from this policy? What costs do these policies impose on the company? And what are the comparative benefits? Why would they be comfortable taking on these costs?

Once you reach a conclusion, ask further questions to test your theory against the evidence. 

The author explains that focus has two meanings in this context. First, it speaks to the coordination of policies that create an advantage for the company. Second, it speaks to the application of that advantage to the right target. He suggests we read Michael Porter's book, Competitive Strategy, if we want to gain a deeper understanding. 

The parting shot from the author is that, at the core, strategy is about focus. Instead of pursuing multiple goals at once, learn to concentrate your resources so you can achieve major breakthroughs in a few select targets.