Introduction to The Strategy Diamond

The Strategy Diamond is a useful tool if you wish to quickly formulate a starter strategy or summarise an exciting strategic plan to communicate out. Let’s learn a bit more on the framework…

What is The Strategy Diamond?

The Strategy Diamond (not to be confused with Porter’s Diamond) is a way to summarise and check a strategy. It can be used as a one pager on a strategic plan or as a checklist to review the assumptions around a strategy.

The Strategy Diamond contains five parts:

• Arenas
• Vehicles
• Differentiators
• Staging
• Economic Logic

What does each part of The Strategy Diamond represent?

The five parts are designed to summarise a complete strategy.

Arenas

Arenas look at areas that the company will be active within, such as markets or demographics. It’s designed to be a list of the different focus areas that the strategy is aiming for in order to be successful. This includes items such as:

• Geographical markets
• Demographic targets
• Channels
• Product categories
• Industries

Vehicles

Vehicles is the component of the diamond that looks at how a company will get to the destination. What are the key strategic activities required in order to progress further? This includes items such as:

• Join ventures
• Partnerships
• Licences
• Internal development
• M&A activity

Differentiators

The Differentiators part lists out how you’ll make a clear difference, what will be giving you the edge in order to overtake the competition. Consider elements from the Strategy Clock or Porter’s Generic Strategies at this point. This includes items such as:

• Brand
• Price point
• Product or service differentiation
• Speed
• Competitive landscape

Staging

Staging, sometimes referred to as Sequencing, looks at the order and speed at which you do the tasks within the strategic plan. This includes items such as:

• Order of key events
• Speed or suggested timescales

Economic Logic

The Economic Logic establishes how you will make a good return for the business, and what steps are needed to ensure a healthy margin. It is often heavily linked to the Differentiators segment of the diamond, and includes items such as:

• Scalability
• Cost of processes / delivery
• Commercial models
• Price points

What are the advantages of The Strategy Diamond?

The Strategy Diamond has a number of advantages:

• It’s a simple, clear summary to communicate a strategy
• It can be used as a checklist to validate a strategic plan
• It’s easy to understand and simple to use
• It can be used to formulate a strategic plan

What are the disadvantages of The Strategy Diamond?

There are a few disadvantages of tool:

• It’s not designed to hold comprehensive information, so will always need other tools with data
• When used purely for formulation, it doesn’t factor in the external environment

How do you make the most out of The Strategy Diamond?

It’s a great tool if you want to do a quick strategy formulation to begin discussion or you wish to summarise a strategic plan for everyone to discuss.

Who invented The Strategy Diamond?

The Strategy Diamond was created by Donald Hambrick and James Fredrickson in a paper called "Are you sure you have a strategy?", published in 2001.

What’s the difference between The Strategy Diamond and Porter’s Diamond?

Porter’s Diamond is a model designed to understand competitive advantage, whereas The Strategy Diamond is a model designed to formulate or summarise a strategic plan.