The sketch of strategy

The sketch of strategy

The sketch of strategy


  • According to Drucker, Strategy is a pattern of activities that seek to achieve the objectives of the organization and adapt its scope, resources and operations to environmental changes in the long term.
  • In other words, strategy includes the following elements.
  • Strategy is more of a long term issue, ie a change in strategy involves a change in the following elements which may not be achieved in the short term.



Examples from companies

Core activities

Ranging from

  • Inbound logistics
  • Operations
  • Outbound logistics
  • Marketing and sales
  • After sales service
  • Procurement
  • HR
  • Technology
  • Firm infrastructure
  • Gucci – Technology (Design); Production (Operation); Marketing and sales – rely on high end physical stores.
  • Airbnb – maintain strong hosts networks

Core resources

Ranging from

  • Brands
  • Supply chain
  • Customer base
  • Management
  • Intangible assets such as broadcasting rights
  • Coca-Cola – Brands
  • Toyota – Supply chain with Just In Time (JIT) inventory management
  • Alibaba – Online marketplace
  • Tesla – Battery production
  • Uber – Surge pricing technology to adjust prices based on changes in demand

Value propositions

  • Define good, bad and neutral experience
  • Try to differentiate from other products or services
  • Apple – States smartphones should be more than a collection of features
  • Uber – Tab the app and get a ride. This effectively differentiates from traditional taxi (need phone calls to dispatchers of where you need to be. Payment in cash)
  • Zara – Fast trend following fashion items
  • Wikipedia – Provide knowledge to other people

Customer relationships

Ranging from:

  • Personal Assistance – Using emails or point of sale by having a real customer representative.
  • Dedicated Personal Assistance – Banking service and luxury stores.
  • Self-Service – Ikea: customers need to collect and assemble furniture themselves.
  • Automated Services – Meituan: provide automatic ranking for different types of services.
  • Communities – GoDaddy: for technical problems in servers, submit a ticket in communities and technical staff will help.
  • Co-Creation – YouTube: invite customers to publish contents for public use.
  • Tesla – To acquire customers through test drive and other customers events and retain customers through maintenance
  • Ikea – To retain customers by offering family card to allow members to enjoy discounted products
  • Airbnb – To provide home insurance to hosts to encourage them to provide their homes to other travellers


Ranging from:

  • Physical stores
  • Online such as social media
  • Amazon – online sales
  • Luxuries – Physical stores
  • Apple – Combination of physical stores and online sales

Customer segments

Ranging from:

  • Celebrities
  • Fashionistas
  • Generation Z
  • Millennials
  • Business to Business (B2B) or Business to Consumer (B2C)
  • Airbnb – Price conscious travellers and hosts
  • Alibaba – B2C and B2B online buyers
  • Ikea – Students and young families
  • Tesla – Early adopters of new technology
  • Uber – Customers who do not want to own a car or drive themselves

Cost and revenue structure

Ranging from:

  • Low cost and low price
  • High cost and high price

Different products or services offered

  • Joseph Cheaney & Sons (shoes) – UK quality; hand made and high price.
  • PRIMARK – Low price fast fashion Irish retailer.
  • Tesla – Direct sales of car models and licensing agreements with Toyota and Mercedes for Electric Power Train Designs
  • Wikipedia – Community donations
  • Uber – Commissions from each ride

Key stakeholders

  • Customers
  • Local suppliers
  • Governments
  • Investors
  • Influencers (bloggers)
  • Management team
  • Gucci – Giving Gucci products to bloggers (influencers)
  • Airbnb – Legal institutions. Paris banned Airbnb
  • Alibaba – Work with Alipay to allow customers to make payments online.
  • Wikipedia – Community members for quality control over contents

Examples of business models:

The following business modes could be used together. For example, McDonald uses both franchise mode together with the bundling mode.


Business models


Examples of companies


Subscription model

Usually pay a monthly fee for recurring service.

  • Baidu Cloud;
  • Kugoo Music


Bundling model

Sell two or more items together at a lower price than a single item.

  • McDonald offering value meals


Free + Premium model

Free access to basic service with additional fees to be paid if other services to be used.

  • Wind (A financial analysis software)
  • Financial Times (FT)


Razor Blades model

High margin items followed by low margin items.

  • iPhone + Apps from apple store


Product to service model

Customers do not need to buy the asset but to simply pay for the service to achieve what they want.

  • Uber
  • Mobike (Meituanbike)


Leasing model

Businesses buy big ticket items and lease them to others.

  • Enterprise Rent-A-Car (Similar to;
  • U-Haul (Moving equipment and storage rental company in the US)


Crowdsourcing model

Receive information from different users from the internet.

  • YouTube
  • Tiktok


One-for-one model

Businesses donate an item to a charitable source for every item received or purchased.

  • TOMS (shoes and accessories) - for every pair of shoes sold, TOMS would provide a new pair to a person in need.


Franchise model

Franchisor allows franchisee to use the idea to start its business. Franchisor receives prepaid income and share its revenue.

  • McDonald
  • Subway


Producer model

Businesses produce the final product with its components being produced by other companies.

  • Apple
  • Dell


No frills model

Focus on basic items with low price.

  • H&M – Staff are mainly responsible for refill racks and shelves but not meant to help customers in their shopping experience.
  • McDonald’s – Standardized restaurants with cheap price which is unlike high end restaurants where customers have to be served.
  • China United Airlines – Budget airline with low ticket price

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Categories: : Strategic Business Leader (SBL)