The Evaluation of Business Strategy

The Evaluation of Business Strategy

Richard Rumelt. 1980. (View Paper → )

It is impossible to demonstrate conclusively that a particular business strategy is optimal or even to guarantee that it will work. One can, nevertheless, test it for critical flaws….

Rumelt suggests a strategy should fit with at least one of these criteria:

• Consistency: The strategy must not present mutually inconsistent goals and policies.
• Consonance: The strategy must represent an adaptive response to the external environment and to the critical changes occurring within it.
• Advantage: The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected area of activity.
• Feasibility: The strategy must neither overtax available resources nor create unsolvable subproblems.

If not, treat it with skepticism.