Concept Management Review 2006, 15-20 2006 CMR Sage

The Ten Commandments of Crafting Successful Business Strategy:

a Review
Kwaku Ahenkora *

Concept Consulting , Primrose Road, London, E10 5EE

Email: kwaku@conceptrmt.co.uk

The business strategy literature is replete with prescriptions and directives with regard to successful
performance. However, most theories and checklists are seldom tested or compared with competing
theories. This study used content analysis to examine the core construct of Thompson and
Stricklands 10 commandments for crafting successful business strategies. A review of the
management literature identified strategic positioning, adaptive strategic change, competitive
advantage, competitive rivalry and behaviour and generic strategies as the core themes of the 10
commandments. While the core constructs of the 10 commandments of crafting business strategy are
embedded in the literature stream of strategic management, they emphasise the economic perspective
more than the resource-based view of performance.

Keywords: Crafting strategy, Thompson and Strickland, strategy prescriptions, competitive advantage

Introduction
Strategic management has become an expectation,
not only on the part of the company but also the
individual manager (Grundy, 2002). Over the past 50
years a considerable amount has been written about
strategy and from this a variety of definitions and
strategic perspectives have emerged. Mintzberg
(1998) identified ten views of the strategy process
and how they developed while Whittington (1993)
suggested that there are four principal or generic
approaches to strategy formulation. Several writers
have indicated that an organisation with a well-
articulated strategy can achieve sustained
competitive advantage over those organisations that
lack strategic vision (Hamel and Prahalad, 1989;
Prahalad and Bettis, 1986; Prahalad and Hamel,
1990; Westley and Mintzberg, 1989; Porter, 1980).
Although there are a potentially unlimited variety of
effective corporate strategies it has been suggested
that if executives benchmarked their strategies
aggressively as they do their operations, most would
discover that their strategies are far from first class
(Collis and Montgomery, 1998).
Thompson and Strickland (2001), therefore,
based on experience proposed the ten
commandments to serve as useful guides for
developing successful business strategies. Vorberda
(2004) has observed that the popular business
literature on strategic management is replete with
prescriptions and directives with regard to successful
strategic recipes and and yet, managers in todays
competitive environment are engaged in strategic
experiments without the guidance of appropriate
theories. This raises the question; are the core
constructs of the 10 commandments embedded in the
literature stream of strategic management research?
Most strategic management theories and checklists
are seldom tested or compared with competing
theories (Camerer, 1985). However, it has been
suggested that the continual attunement of rivalling
perspectives in strategic management should be
promoted (Mahoney, 1993).
This study, therefore, examined the soundness of
Thompson and Stricklands 10 commandments for
crafting strategy and the extent to which they are
embedded in strategic management thought.
Approach
In order to compile a research stream to establish the
core constructs of Thompson and Stricklands ten
commandments of crafting strategy, content analysis
of the management literature was made. Content
analysis, while certainly a method of analysis, is
more than that: it is a method of observation; instead
of observing peoples behaviour directly, or asking
them to respond to scales, or interviewing them, the
investigator takes the communications that people
have produced and asks questions of the
communications (Kerlinger, 1964). Key word
searches were conducted by employing broad search
statements and names, e.g. crafting strategy,
competitive advantage, core competence, resource,
Porter, Collis, Mintzberg. A digital repository was
created where full texts of articles were downloaded.

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*Author is also a lecturer, London Business College. The useful comments of Dr. Phil Goldfeder are acknowledged.
 K. Ahenkora, Concept Management Review 2006, 15-20
Collateral descriptors surrounding various key words
were examined for content and perspective. The
underlying constructs- theory and themes of the Ten
Commandments were identified through the
bibliography and citations.
The Ten Commandments : theory and themes
The theoretical underpinnings of the 10
commandments were analysed separately and the
emerging themes provided the framework for the
core constructs of the commandments.
1. Place top priority on crafting and executing
strategic moves that enhance the companys position
for the long term
Thompson and Strickland make strategic positioning
a priority in crafting successful strategies. Porter
(1996) identifies three key principles underlying
strategic positioning: strategy is the creation of a
unique and valuable position involving different set
of activities such as serving few needs of many
customers, serving broad needs of a few customers
and serving broad needs of many customers in a
narrow market. A company not only needs to be
operationally effective it also needs to have a
superior positioning strategy (Porter, 1996).
Positioning also features prominently in Mintzbergs
(1987) framework of defining strategy. According to
Fahey and Randall (2001) whether an organisation
wins today and positions itself for tomorrow depends
on how they continuously enhance the linkages or
interface between strategy (what the organisation
does in the marketplace) and organisation (what
takes place within the organisation). Johnson and
Scholes (1999) highlighted the long-term perspective
in their definition of strategy: the direction and scope
of an organisation over the long term which achieves
advantage for the organisation through its
configuration of resources within a changing
environment to meet the needs of markets and to
fulfil stakeholder expectations.
2.Be prompt in adapting to changing market
conditions, unmet customer needs, buyer wishes for
something better, emerging technological
alternatives, and new initiatives of competitors
Thompson and Strickland argues that while pursuing
a consistent strategy has its advantages, adapting
strategy to changing circumstances is normal and
necessary. The concept of adaptive strategic change
is important in strategic management thought. Now,
more than in the early development of strategy as a
field of study, changing environments are forcing
companies in almost every sector to re-examine their
strategy (Vorberda, 2004). Strategy involves creating
a fit among a companys activities and making
trade-offs in competing-choosing what not to do
(Porter 1996). Strategic fit sees managers trying to
develop strategy by identifying opportunities arising
from an understanding of the environmental forces
acting upon the organisation, and adapting resources
so as to take advantage of these (Johnson and
Scholes, 1999). Prahalad and Hamel (1990) think
that the essence of strategy lies in creating
tomorrows competitive advantages faster than
competitors mimic the ones you possess today.
Successful organisations accept the challenge and
seek to be environmentally vigilant, innovative and
flexible- organisations which are less aware and
relatively inflexible will find they are reacting to
situations they do not fully understand (Thompson
1995).
3.Invest in creating a sustainable competitive
advantage
Thompson and Strickland (2000) recommend that
having a competitive edge over rivals is the single
most dependable contributor to above average
profitability. Therefore as a general rule, a company
must play aggressive offense to build competitive
advantage and aggressive defence to protect it. There
are as many competitive strategies as there are
competitors. However, the biggest and most
important differences among competitive strategies
are whether a companys target market is broad or
narrow and whether it is pursuing a competitive
advantage linked to low costs or product
differentiation Strategic positioning attempts to
achieve sustainable competitive advantage by
preserving what is distinctive about a company: it
means performing different activities from rivals, or
performing similar activities in different ways (Porter
1996). Porter (1985) argues that competitive
advantage can accrue from cost leadership,
differentiation and focus. Real competitive advantage
also implies that companies are able to satisfy
customer needs more effectively than their
competitors (Thompson 1995).
4. Avoid strategies capable of succeeding only in the
most optimistic circumstances
This guideline seeks to alert companies to the
countermeasures of competitors and times of
unfavourable market conditions. Thompson and
Strickland are of the opinion that a good strategy
works reasonably well and produces tolerable results
even in the worst of times. Competitive battles
should be seen not as one-shot skirmishes but as a
dynamic multi-round game of moves and
countermoves- every business should strive for
multiple sources of competitive advantage and
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 K. Ahenkora, Concept Management Review 2006, 15-20
should expect the terms of competition to shift over
time (Gupta, 2001). Gupta (2001) argues that the
terms of competition shift due to change in customer
priorities and buying behaviour- recession,
availability of substitutes, changes in customers
product or process technology, and achievement of
competitive parity- even if customer priorities
remain unchanged, competitive dynamics themselves
often result in changing the relevant bases for
competitive advantage.
5. Dont underestimate the reactions and the
commitment of rival firms
Rivals tend to be most dangerous when they are
pushed into a corner and their well-being is
threatened. Causes generate effects. On occasions
companies may attempt to seize the competitive
initiative and introduce an innovatory change. An
action by one competitor which affects the relative
success of rivals provokes retaliation- one action can
therefore provoke several reactions depending on the
extent of the impact and the general nature of
competition (Thompson, 1995).
6. Consider that attacking competitive weakness
is usually more profitable and less risky than
attacking competitive strength
Thompson and Strickland propose that attacking
capable, resourceful rivals is likely to fail unless the
attacker has deep financial pockets and a solid basis
for competitive advantage. In considering the
positioning of the organisation in relation to others
with which it competes for customers or resources, it
is necessary for an organisation to establish its
relative strengths in its market through competitor
analysis (Johnson and Scholes, 1998).
7. Be judicious in cutting prices without an
established cost advantage
Thompson and Strickland are of the opinion that
only a low-cost producer can win at price cutting
over the long term. By pursuing a strategy of cost
leadership, the organisation concentrates upon
achieving the lower costs of production and
distribution so that it has the capability of setting its
prices at a lower level than its competitors (Porter,
1980). The difficulties of maintaining the lowest cost
position over time and the vulnerability to a price-led
attack have led many organisations to view cost
leadership with a degree of caution (Giligan and
Wilson, 2003).
8. Strive to open up very meaningful gaps in quality
or service or performance features when pursuing
a differentiation strategy
Thompson and Strickland maintain that tiny
differences between rivals product offerings may not
be visible or important to buyers. From this
perspective, it means that a company should be both
operationally effective and in addition it should have
a plan to perform different activities or perform
activities differently than its competitors (Porter,
1980, 1996). A company needs to minimise its
vulnerability on one hand and maximise its potential
for competitive edge on the other (Quinn & Hilmer,
1994; Porter, 1980). Differentiation can be costly if
the basis for differentiation that is chosen
subsequently proves to be inappropriate (Giligan and
Wilson, 2003).
9. Avoid stuck in the middle strategies that
represent compromise between lower costs and
greater differentiation and between broad and
narrow market appeal
A company risks being stuck in the middle if it is not
able or willing to make choices on how it should be
competitive (Porter, 1997). Being stuck in the middle
is almost a guarantee for poor performance, and
hence low profitability (Porter, 1980). Gupta (2001)
argues that for many years, strategy theory postulated
that businesses should strive to compete on the basis
of either low cost or differentiation- however, the
notion that every business must choose between
either differentiation or cost leadership simplifies
the reality facing most companies too grossly to be
of much practical value. Focus is the third of the
generic strategies identified by Porter and it involves
the organisation concentrating its efforts upon one or
more narrow market segments, rather than pursuing a
broader-based strategy. Although Porter presents
competitive strategies in this way- cost leadership,
focus and differentiation, many companies succeed
not by a blind adherence to any approach, but rather
by a combination of ideas (Giligan and Wilson,
2003). It is apparent that some leading companies
have not succeeded by being exclusively cost
leaders, differentiators or focused- many companies
are both cost leaders and differentiators (Sanders,
1987).
10. Be aware that aggressive moves to wrest market
share away from rivals often provoke retaliation
in the form of a marketing arms race or price
war- to the detriment of everyones profits
Porter (1980) suggests that firms that pursue a
particular strategy aimed at the same market or
market segment make up a strategic group and
competition in any industry is rooted in its
underlying economic structure, and is therefore more
complex than moves and counter moves of
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 K. Ahenkora, Concept Management Review 2006, 15-20
companies and their competitors. Knowing this, a
company should strive for sustained superior
performance in adding value in order to obtain
competitive advantage and therefore be profitable
(Porter, 1980; 1996). Competitive rivalry is known
to be an external value driver, and it has direct
impact on margins (Johnson and Scholes, 1999).
Core Themes
The content analysis of the 10 commandments
enabled the identification of the core themes
underpinning the guidelines (Table 1). The core
themes seem to suggest that the guidelines propose
the development of a generic strategy
(commandments 7,8,9) that delivers sustainable
competitive advantage ( commandment 3). The
strategy should position (commandment 1) the
business in the industry for the long-term and at the
same time enable it to make rapid response to
changes and opportunities in the environment-
adaptive strategic change (commandment 2).
Underpinning the strategy should be an
understanding of the competition-competitive
dynamics, competitive rivalry, competitor analysis
(commandments 4,5,6) and competitor behaviour
(commandment 10) in the industry.
While the content analysis refers to the thoughts of
several contributors, the core themes suggest that
Thompson and Stricklands guidelines lean heavily
towards the works of Porter (1980, 1985,1995) on
strategy and competitive advantage.
The themes are summarised as follows:
Commandment1, Strategic Positioning/ vision
Commandment2, Adaptive Strategic Change
Commandment3, Competitive advantage
Commandment4, Competitive dynamics
Commandment 5, Competitive rivalry
Commandment 6, Competitor analysis
Commandment 7, Generic strategy- cost leadership
Commandment 8, Generic strategy-differentiation
Commandment 9, Generic strategy- focus
Commandment10, Competitive rivalry and
behaviour
Theoretical construct
A synthesis of the core themes of the 10
commandments suggests that Thompson and
Strickland stress the importance of competitive
interactions and competitive advantage in crafting
successful business strategy. The research stream of
strategic management emphasises the importance of
the relationships among the basic elements of
organisational and competitive interactions such as
competition and market structure, organisational
capabilities and strategies and performance in
modelling competitive advantage (Caves and Porter,
1977; Porter, 1985; Fiegenbaum and Thomas 2004).
Historically, the Structure-Conduct-Performance
(SCP) paradigm in industrial organisation economics
is used as the basic competitive model (Porter, 1980).
The paradigm suggested that market structure
elements determine the level of firm performance.
The paradigm was later modified to include
strategy (firm conduct) as a key element that can
make a difference in explaining firm performance in
industries, since firms tend to have different skill sets
and distinctive competencies (Fiegenbaum and
Thomas 2004). A selective review of strategy studies
shows that Porter (1980, 1985) and Caves and Porter
(1977) used the basic paradigm to focus on how to
maximise firm profit. Firms in an industry are no
longer homogenous and have been clustered into sets
of firms that follow similar strategies- strategic
groups . Strategic management researchers have
described this clustering strategy in terms of strategic
typologies (Miller and Friesen,1978) as well as
generic strategies (Porter, 1980). Generic strategies
underpin the 10 commandments.
More recent research in strategic management
has shifted toward understanding the strategic
mechanisms that can create competitive advantage
(Porter, 1980, 1985) and to explain the firm-level
mechanisms for achieving sustainable competitive
advantage based on the framework of core
competitive capabilities (Hamel and Prahalad, 1994;
Collis and Montgomery, 2005). The research stream
of strategic management on firm performance has
categorised determinants as either organisational or
economic in nature (Andrews, 1971; Montgomery,
1994). An economic perspective emphasises the
importance of the external market factors such as
firms competitive position, market power and
industry structure (Caves and Porter, 1977; Chandler,
1990; Porter, 1985). The resource-based view posits
that competitive advantage can be sustained only if
the capabilities creating the advantage are supported
by resources that are not easily duplicated by
competitors.
The market-based and the resource-based views
of the firm provide alternative views of how to
achieve strategic fit. In one particular study, Hansen
and Wernerfelt (1989) showed that economic factors
(industry variables, market share and firm size)
represented 18.5% of variance in business returns
while organisational factors (goal emphasis and
human resources) contributed 38% of performance
variance. Fiengenbaum and Thomas (2004) have
indicated that competitive environments will
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 K. Ahenkora, Concept Management Review 2006, 15-20
K. Ahenkora, Concept Management Review 2006, 15-20
influence how capabilities develop over time and
that, in turn, these capabilities will affect
performance and competition. It has been proposed
that all determinants of firm performance should
work in harmony with each other to create total
economic value (Hart, 1995; Moore, 1996).
While the core themes of the 10 commandments
are embedded in strategic management thought, they
give very little guidance on the resource-based view
of competitive advantage or organisational
perspective of performance. Given the performance
model of organisational and economic determinants
(Hansen and Wernerfelt , 1989) the underlying
construct of Thompson and Stricklands guidelines
fall short of giving equal consideration to both
organisational capabilities and competitive
interactions/ market requirements to competitive
strategy in a dynamic environment to sustain
performance.
Conclusion
This review highlights the strategic management
theories underpinning Thompson and Stricklands 10
commandments for crafting business strategy. The
guidelines lean more on the economic perspective of
strategy than the resource-based view.
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