What Is Strategy? It’s a Lot Simpler Than You Think

[@Willbudi]

Strategy is a plan to create value. 1. Not focus on profit 2. About looking forward to planning for the future 3. Building value for customers, employers, and suppliers 4. Value = difference between willingness to pay (customer) and willingness to sell (supplier) 5. How do I raise willingness to pay? Product Quality, Product Complement, Network Effects 6. How do I lower the willingness to sell? Provide better working experience as a trade-off For e.g. Best Buy, increase WTP by offering customers with faster delivery directly from BB neighborhood stores, utilizing BB stores as warehouse

[@PGERARD63]

Where does all the value ends?

[@jwp363]

Koller, Goedhart, Wessels - VALUATION -outline a number of ways to measure and manage value that you might fine useful Wiil.

[@ysk-pf2gx]

very clear, thanks

[@peacebakare]

This is a super complement of "A Plan is Not a Strategy" by Prof. Roger, that I just watched. I have learned so much about Strategy within 20mins I feel like I have some powers at my disposal right now. Looks like I'll like to have a MBA for structured and consolidated knowledge.

[@srinic9319]

I was just about to post this 😅 a plan is not a strategy but a strategy is a plan - 😭

[@peacebakare]

@Huy Phạm Quốc Really? So sorry about that. How can I help?

[@durgaprasadvadlamoodi1271]

i agree, i just watched and explained very well.

[@Anurag_Saxena]

@Huy Phạm Quốc me too. So I watched this video again and concluded that strategy is a "plan to create value". First Prof. Roger sounded incorrect to me. Then I re-watched Prof Roger and found his case study of Southwest explaining his points crystal clear.

[@michaelwilliams2337]

Prof Martin's video is excellent and probably the only strategy video which really says what strategy is all about in under 10 mins. Felix Oberholzer-Gee's video breezes over the ferocity of competitive forces.

[@NuostabuspasaulissuJuste]

Labai įdomus video, tikrai pritaikysiu šias idėjas savo versle! Ačiū už pasidalinimą.

[@adriendeotto7971]

Anyone who tries to grasp what strategy is should start with this video. A big thank you to Felix Oberholzer-Gee and the HBR channel for sharing such high-quality content and insights 🙏

[@teezfeelz-1716]

Hi Adrienne, I found the piece a little confusing especially around willingness to sell. What Am I missing. Can you explain to me like you would a 10year old.

[@jwp363]

Thank you.

[@4thdealers]

What's amazing about the Value stick, is how well that graphics the Supply and demand curves you see in Econ 101.

[@burhani3071]

Best content for a long time on youtube! Thank you for that HBR and Prof. Oberholzer-Gee.

[@Kakanato]

Felix, you have just increased your value by increasing the willingness to pay and decreasing the willingness to sell! Awesome real life example!

[@carol7roberts]

Excellently and succinctly explained. Please put Mr. Oberholzer-Gee in more videos! Also, excellent visuals here!! Bravo!!!🏆

[@jwp363]

Thank you Carol

[@innovationconnected6762]

Love the video but have a different opinion on one point: What customer value is. I see it from a customer's point of view: If I pay $100 for something, how much value will I realize over and above that inital investment? Buying something is a sunk cost, the value is in what I get out of the investment. What Prof Felix described to me (value stick) is really a price stick, the range in which a seller and buyer can potentially agree on a price.

[@meshangovender]

Profound content. What a gift to be able to explain something so complex so simply. A true MBA in 10 mins

[@abubalo]

I am impressed by HBR consistency to release great video after great video👏

[@SiddharthSingh07]

Amazing job creating this content - Core concepts simplified under 10 mins Hoping to see more content in this format.

[@extedax]

Excellent content! If you're looking for a 10min MBA, this the closest you could get to it.

[@sergiomujica973]

Exactly! I completely agree. It reminded me of some of my MBA classes.

[@junnatha]

Also #personalMBA by Josh Kauffman. Combine with HBR and Economist guides. For more in business today, learn Economics, Computer science CS50, web3, Mathematical thinking, lateral thinking, design thinking, systems thinking..... And lessons from your specialization specific books/pods/courses/journals...

[@KAUEFERRARI-ue1ct]

Great explanation! Strategy often seems like something complicated, but the way you simplified the concept makes total sense. In the end, it’s about making clear decisions based on the resources and goals we have, not overcomplicating the process. This video really helps demystify the idea that strategy is something unattainable!

[@Ms.T]

The anticipation of starting my dream job in a couple of weeks thrust me into this journey... I started with optimization of the Game theory in in my career, then I stumbled on "Planning is not a Strategy" to wit; a strategy is a plan that is based on logic that is simple & can be tweaked(with a pre-established tweaking mechanism) when it is not working... Full circle moment... 🎉

[@jwp363]

For me, strategy is HOW - the story line in a few words: planning is planning.

[@robinzhang6205]

Hi ROFESSOR OBERHOLZER-GEE,I'm just in "Business Strategy" class online, good to see you here

[@phyllissong]

That coffee example really resonated with me! I totally understand that willingness to pay is subjective and changes depending on the situation. It's a great way to think about value creation for customers. 😊☕

[@Anurag_Saxena]

First, i watched prof Roger's video on strategy. Then, I watched this video twice and concluded that strategy is a "plan to create value" and Prof. Roger sounded incorrect to me. Then I re-watched Prof Roger and found his case study of Southwest explaining his points crystal clear. In plans, even deviations from goals are anticipated and there's plans in advance to fix them. In strategy, one isn't sure what sort of deviations come ahead and there's no plans in advance to fix them. One needs to twist and turn the strategy as and when the deviations arise.

[@jwp363]

My view is that the tactics might need adjusting but the b asis strathey will probabaly remain the same if it is any good.

[@avo-w1s]

its a plan to create value. the beginning phase to achieve a benefit (a measurable outcome). determining optimal customer willingness to pay/price. determining willingness to sell for employees/compensation. the middle between the opposing position reflects company success.

[@AllofGodsWord]

Great video and points made. The only thing I would change is the word choices of "willingness to sell". Most of the examples didn't align well; their "willingness to sell" didn't decrease in a logical sense, at least not with the visual being used. Perhaps flip it to "Reluctance to Sell". If the reluctance to sell decreases (goes down) and the willingness to buy increases (goes up), basically stretching out the line more, this signifies an increase in value. Similarly, if reluctance to sell increases (goes up) and willingness to buy decreases (goes down), basically compressing the line, this signifies a decrease in value.

[@DodaGarcia]

That's fantastic! One question I have is: in the example of decreasing willingness to sell by improving the job conditions, where does the financial investment get factored in? Because while not a one-to-one comparison to just increasing pay, it's still not free to implement.

[@abirahmed1292]

Can we see this in real world" Wow, that question and answer really made the difference for me, you created a real value guys. Thanks

[@drannoc100]

One’s think the more employees are engaged, the more they’ll be “willing to sell.” This phrase/concept of “willingness to sell go ‘down’” seems really about “enlarging” the portion/likelihood of willingness to sell instead of the actual level of willingness to sell. - Correct me if I am wrong.

[@matthew4031]

That was one of the most value pack videos I’ve ever watched

[@dougr550]

A big part of strategy is a set of ideas that you are going to organize around to deliver value. Not surprisingly strategy is applied at many different levels, from the operating model and the way you organize, to individual initiatives. Project management vs Agile would be an example of two different strategies to solve at times the same problem. The problem with the very best strategies is that very few people seem to understand them ;)

[@someonenamedbob]

I"m curios what do you mean by agile?

[@dougr550]

@@someonenamedbob Agile is a software development philosophy for addressing the uncertainty that exists in terms of what to do and how to do it when building software. This philosophy has also been adapted for use in other settings, but is at its heart rooted in Lean management.

[@someonenamedbob]

@@dougr550 Oh that I've heard about it before, don't know much about it though.

[@atogweoghieaga2205]

This is unbelievable. No one has ever strategy this way!

[@lucemiserlohn]

"Strategy is a plan to create value" Thank you for showing right at the beginning that you misunderstand what strategy is, so I don't have to waste 8 more minutes of my life. Strategy is defining a goal, an outcome, a desired state that is to be achieved; planning is detailing the steps on how to achieve that. When strategy deals with the "what", planning deals with the "how". Don't confuse these!

[@Ceasus]

My thoughts exactly. Just yesterday I watched another video from HBR where a different university professor had another definition (that time, a more correct definition) of what strategy is. It seems like even after so many years, HBR cannot figure out who is right and who isn't?

[@bayou__]

I Love It, Unique selling Point. Customers believe the want to pay.

[@user-HRARTIST]

Fantastic explanation!!!!! Many thanks!!!!!

[@pradeepbhatnagar4848]

Excellent vdo lecture bt as a professional directing HRD efforts to goals nd Strategies of the organisation is quite important such as understanding nd claritying business goals of the organisation, understanding nd clarifying strategies planned by the organization to achieve goals, Clarifying the social objectives of the organization, contributing to the strategies to b adopted by the organization to achieve goals, shaping HR philosophy to suit the goals nd Strategies, providing inputs relating to people whenever strategic shifts r made, Developing HR plans to suite diversification nd other important decisions, Identifying sick,loss making or poor performance units or departments or sections ,nd conducting diagnostic exercises, working with the top mgmt.of these units or departments to improve their performance through human process interventions nd assisting top management in organizational revivals or renewals etc.in brief.Vry. inspiring lecture.Its a very Vast field and in my opinion it is a strong bonding chain correlated with each other in nut shell.Useful nd Informative Lecture.Thanx,👍

[@glomanibravolopez]

A PLAN to create VALUE. Love it!

[@MohamadShurrab]

Excellent! Strategy is a Plan to Creat Value. This is where I differ with Professor Roger piece on Strategic Planning where he completely disconnects both.

[@socratesbleu]

I want to take his class. I understood half of what he said but was engaged the whole way

[@swezin7125]

I learn a lot within 20 mins and thank you so much.

[@PhirunKao]

It's the best 10 mins about strategy!

[@franckkabran3637]

The concept of value creation by decreasing willingness to sell through improvement of work environment is just genuine 👌🏾

[@koresam9351]

So in the war, to kill other or enemies is the strategy? Where is value?

[@cara804]

i love this is in direct difference to strategy is not a plan via HBR...

[@annemaxwell9975]

This commentary is far superior to the explanation offered by the other professor with whose language I took issue with. I still say Strategy is the why and the vital plan to achieve it's likely success or to optimise the desired outcome is the what, which, where, when, who and how.

[@iangrant3615]

This is interesting, although I'd suggest if you need to explain willingness to buy/willingness to sell, it highlights that those terms are not clear or intuitive enough to be effective. The explanation was effective and made an impact, but the original terms remain ambiguous.

[@martinbaumgartner8417]

Really good, thanks. And now I'm into getting your book too... I had to google to be sure you are swiss... lovely accent!

[@sahanglp3i-271]

Thanks to Harvard Business Review for the amazing videos ...

[@stevenmalolo938]

I love how you broke it down so we can understand. Love the content!

[@gyanprakashgupta4629]

Amazing...could not have learnt more within 10 minutes

[@nhungphuong2461]

This is high-value content! So impress. Thank Prof.

[@mrbonbonist]

Just finished his book on strategy.Totally recommend it.

[@philippededeken4881]

He's ignorant about the topic. What a waste of time.

[@mrbonbonist]

@@philippededeken4881 your comment is a waste of time.

[@sendyardi5190]

In this video, Felix Oberholzer-Gee explains that strategy is a plan to create value and that a company's financial success is the result of its strategy, not the starting point. He describes value as the difference between willingness to pay and willingness to sell, which is split between customers, employees, and the company. The ways to increase willingness to pay are through product/service quality, complements, and network effects. The two ways to attract talent are to pay more or make the job better. Although both methods create value, paying more shifts value from the company to the employees, while making the job better lowers willingness to sell.

[@Dakid015]

Good summary! Thanks!

[@pujadeshani2419]

Excellent explanation. Go straight to my brain. Thank you...............................🙏🙏🙏🙏

[@manojphatak763]

OMG. That is the best damn explanation of strategy and value I have EVER heard !!!

[@kumbukanikachingwe9919]

Thanks very much Havard, watching these videos really helps alot. It's kinda like we are on campus, i had to watch these episode 5 times to really get hold of WTP and WTS. Thanks.

[@melissaprice1424]

The reason why this seems so simple is because it is simplistic. Willingness to sell is impacted by many more things than satisfaction with the job - as any contact with contemporary economics should tell you. Such as cost of living pressures, to give the most obvious example, and straight out desperation, as well as personality and ethical considerations. Government policy to influence willingness to sell etc. You'd have to do better than this to sell a Harvard course to me. Like the relationship between an employee's willingness to sell their labour and their willingness to part with their money (say, to pay for an economics course) and the "value" perceived in the whole process.

[@rishu3080]

You are just awesome in your explanation!!!

[@pau8727]

Maybe I'd missed, but where is the influence of rest of the expenses apart from labour cost in the suggested model?

[@harvardbusinessreview]

Observant question. To keep the video under 10 minutes we focused on 2 out of the 3 value levers (customers and employees) but sidestepped suppliers (though they do get mentioned in the Best Buy example near the end). But you are right that they're a part of the model, along with other costs. Felix covers those in more detail in his book in the description, or you can start here where it's also well covered: hbr.org/2021/05/eliminate-strategic-overload. Thanks for watching!

[@monkichi1112005]

simply explanation and easy to understand

[@samartharya5668]

Beautiful video. Stick diagram makes it lot easier to understand. Example of Best Buy suits well too. Would love to read more.

[@PaulMielcarz]

Strategy is systematic plan. Plan is goal transformation. Goal is right aim. Aim is directed decision. Strategia jest systematycznym planem. Plan jest transformacją celu. Cel jest prawym zamiarem. Zamiar jest skierowaną decyzją.

[@hunterelanor]

Any plans to do a video on trading the Asian markets? I'm curious about global opportunities.

[@HS-wd5mp]

Absolutely stunning! Thank you so much.

[@joaonogueirasantos8211]

Amazing content. It's like being at Harvard Business School! This quality teaching should be accessible to everyone in the world! Thank Prof. Felix!

[@AbinashKumar-r4z]

What about the cost of making the Job a better Job? That will also redistribute the value -- from company to employees. We will need to calculate the difference between 'what if we pay extra to the employees' vs 'what will I spend to create a better working environment or culture'

[@idrissakfalen8290]

The explanation is perfect. Understanding strategy starts with these foundations. I would just like to add something because I think welliness to sell doesn’t rely solely on compensation, it varies from a company to another. This could be entirely true if it’s a consulting firm where up to 60% of the revenue is spent on compensation but for other firms, like manufacturing firms, you just can’t apply the same logic cause the part of main costs are way higher than compensation and the perspective to create value decreasing wellinness to pay is comme merely different.

[@vinatram9930]

you have a point.

[@blurayism]

Simple & clear explanation😀

[@lotannaobika6153]

This is a superb content

[@annerEbert]

I often watch your videos, Michael!

[@carolcharles743]

Your videos are very informative and easy to understand. Thank you for making trading accessible to everyone.

[@Flat2theFace]

Great breakdown, thank you!

[@alexisazria1169]

This is an excellent explanation. Thank you.

[@SalawuIbrahim]

This is amazing! I feel a lot smarter on the topic of strategy. I'm also aware enough that I need to learn so much more to be able to take advantage of this body of knowledge I just acquired. Thank you Felix!

[@rdeen1]

Thanks for this excellent presentation. However, I am confused about the WTS idea. Is it about the supplier or the employees? In the presentation, he talks about working on compensation to reduce the WTS. Initially, I thought that WTS is the minimum price at which a seller is willing to sell a product or service.

[@johnklee3843]

This is a great video!! Pricing 101

[@clementgavi7290]

In another video, published in June 2022, Roger Martin, said ‘A Plan is Not a Strategy’. It was the even title of the video. And here, you define strategy as a plan to create value.

[@thelammas8283]

Agree. We overcomplicate things. How do we increase the absolute amount of sales substantially, without reducing gross profit, or wrecking the company?

[@robinyeomengcer2917]

As they say, if you fail to plan, you plan to fail. Thus Strategy may not necessarily be a plan but certainly involves some form of planning. Example: Airbnb's strategy was disrupting the hospitality industry (e.g. hotels) by creating an online platform to enable hospitality to be enjoyed by travellers from a home (instead of a hotel). For Airbnb's strategy to succeed, for instance, Airbnb will need to plan on how to develop the online platform that is user friendly to suppliers (home owners) and the end customers (travellers).

[@romp39]

Product/Customer experience and employee experience are the two foundational factors. Sounds simple but as the layers of management there is more and more Vaseline on the lens when it comes to observing and measuring the quality of these experiences.

[@ahmadaizatrahmat7675]

Any suggestion or idea for strategy for a not for profit organization?

[@bluewhaleinforest8029]

After hour fan ❤

[@joaquinjackson7510]

Very good explanation! Thank you

[@ProblematicFarsi]

thank you. what is name of the song? 3:14

[@alphonsusraj8510]

As its core strategy is a plan of action designed to achieve some specific goals. It involves making decisions to allocate resources and navigate tasks and challenges in order to reach desired outcomes.

[@herrysantoso2523]

Very good sharing!. It is simple and powerful! thanks

[@PraveenKumar-ed3xt]

Tons of value loaded video, It can't be simpler than this, so clear, with examples 🙏

[@miguelsalazar1602]

Wow! The content of this video is really good. I wish there we're more professors and intelectuales that could talk about business like this, without the jargon and mambo jumbo that most business teachers use.

[@BayuHendra-wb2zx]

Thanks tricks and strategies for success, always good luck

[@hk4848]

To put it in layman terms a plan is when you plan to sell something to a market a strategy is when you decide how will you make your Products and services different from, the rest of the competition which makes consumer consider your Products and services.

[@josephinebardot8403]

Thank you a lot for this video. This is very interesting and informative. Keep posting like those amazing videos, this is awesome.

[@albertomontes3390]

in this video, it says strategy is a plan, and in other video, it says strategy is not a plan. very usefull...

[@jwp363]

Felix, let me disagree, a strategy is not a plan. Strategy is about how-to achieve something - the story if you like. And a plan is about the what, where, and when - more like the chapters of a book.

[@victorowino8588]

How to achieve something equals a plan

[@dinethrathsara3246]

Plan is more like steps to achieve something​@@victorowino8588

[@telebiopic]

‘Plan to create value’ is not just a Plan in the traditional sense of the word.

[@wmazim910]

@@telebiopic That's why the concept of strategic planning exists.

[@SDW3-6-9]

Prof. Michael Porter, also says that Your Strategy is NOT a plan. He defines it as "Your uniquely differentiated value proposition and position " It's WHY you exist. Plan is the WHAT and HOW ?

[@cesar_ai_eng]

So value is the result of immaterial and subjective appreciations of customers and employees

[@moisestatis5418]

Great video, liked it so much. Thank you! Look forward to find more like this.

[@motsekiletsela876]

But making a job a ‘better job’ surely there is costs associated with that, therefore it will ultimately mean redistributing value? Or am I missing something?

[@NoCentsFilms]

I’m an author and do not see how this model of strategy helps me in the arts. Publishing looks at the pay/sell paradigm. But as the author, I’m out of that decision loop even though the majority of publishers today rely on the artist’s own efforts to drive sales. So I need a model of strategy that will help me navigate the randomness-filled arts economy and turn my name and/or books into customer magnets. To apply a strategy to all the “branding” and “book launch” advice and options flying around. Particularly since I have one book a year coming out with respected publishers in 2023 + 2024, with another under contract.

[@sonduongbui]

Thank you! I like how straightforwardly you educate.

[@somosagricultura]

Interesting topic. It's great to learn about strategy because it's easy to get wrong about this concept.

[@matthewhodgkins6438]

“Profitability” or “Value creation” seems like a more accurate title for this video than strategy.

[@danolal7729]

Strategy is not the same as a plan, but you do need a plan to implement a strategy.

[@ianwalton7132]

I had to chuckle at this to be honest. One of the key points here is to try and pay employees less.....so that the 'company' makes more money. Well those people ARE the company! They create MOST of the value. Investors also help to create value but let's not forget that an employee is also an investor. They invest their time, talent and energy. Why should they be squeezed in order to benefit traditional investors i.e. shareholders? This is faulty thinking in my opinion. The goal should be to share financial rewards evenly across all value creators. Not skewed to shareholders.

[@Zaied.mahmoud]

Amazing perspective!

[@ChengeerLee]

Brilliant. And you are an amazing educator. Great work, kudos to the production team. Top notch work!

[@johngreat]

Great talk. One question. How does this apply for an NGO though?

[@salmanhabib5587]

He is a magician...simply wow.

[@applereci2338]

BRAVO - but how did you make this presentation?