So, what really is a strategy? By definition, a strategy is the way by which you are planning to obtain your goals. In a competitive environment, your goal is that the consumer will prefer you to your competition.

That is why the strategy is, in fact, the way by which you plan to achieve an advantage over your rivals – in the eyes of your consumers. Almost always, preference can be achieved only by differentiation, by either doing something other than what your competitors are doing or by doing things in a markedly dissimilar manner. By being different you supply some of the consumers in some of the buying/consuming opportunities with a good reason to want you more (and if you are a great strategist indeed – to want you only).

There are three types of differentiations and only one of them constitutes a strategy (or strategic differentiation). The transient differentiation is often achieved by promotional activities, such as a big sale. The circumstantial differentiation consists of things like a historical monopoly, or some kind of personal connection between the consumer and someone in the firm, or a convenient store location etc'. However, the differentiation we want to focus on is the strategic differentiation, such that provides a long lasting, circumstance-crossing advantage.