Strategy wheel

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What Is a Strategy Wheel?

Figure 1: Strategy wheel (Buijs and Valkenburg, 1996)

A strategy wheel is a visual representation and a quick tool to review a company’s strengths (see figure 1). A strategy wheel presents the company’s competencies on the axes, and the scores of the competencies on those axes. By using the diagram, you obtain a quick understanding of the company’s strategic strengths. Often it is useful to construct strategy wheels of a company’s direct competitors.

A product innovation process starts with a clear understanding of the current situation of a company. The need for a new product arises from an understanding of a company’s strategic strengths and weaknesses, and the opportunities in the market. A thorough analysis of the current situation of a company yields an understanding of the company’s strategic strengths (for example: technical know-how, product portfolio, development (capability), financial position, export know-how, marketing, organisation and personnel, management).

The strategy wheel is sometimes used to compare other things than a company’s strategic position. For example, design concepts can be analysed and reviewed using the strategy wheel. The axes represent design requirements on which the design concepts are evaluated. The strategy wheel then yields a visual representation of the scores of the different design concepts on the design requirements. Also, there are various adaptations of the strategy wheel (for example the ‘EcoDesign Strategy Wheel’, in this section).

When Do You Use a Strategy Wheel?

A strategy wheel is usually applied in the beginning of a new product development process in order to present the strategic strengths of a company.

How to Use a Strategy Wheel?

Howto-strategy-wheel.png

Starting Point

The results of an internal analysis form the starting point for the use of the strategy wheel: a clear understanding of the company’s strategic strengths in relation to its direct competitors.

Expected Outcome

The outcome of the use of the strategy wheel is a visual representation and a better understanding of the company’s strategic strengths.

Possible Procedure

  1. Determine the company characteristics that you want to evaluate. Examples are: financial strength, in-house technology, knowledge (Research and Development).
  2. Determine a value for each of the characteristics. These values are determined by comparing the company with its direct competitors.
  3. Create a diagram, a strategy wheel of the scores on the characteristics.
  4. Optionally, put down the values of the competitors’ scores on the same characteristics in the same diagram, or in a similar diagram.
  5. Analyse the diagram, the strategy wheel, to assess the company’s strengths and weaknesses (in comparison with its direct competitors).

References and Further Reading

  • Buijs, J. and Valkenburg, R. (2005, 3rd ed.) Integrale Product Ontwikkeling, Utrecht: Lemma


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