The second ingredient of a superior strategic position resides in finding answers to the questions who, what, and how. Who should we target as customers? What products and services should we offer them? How should we do this in an efficient way?
The questions of "who" and the "what" are essentially strategic; the answers to these questions will define the game the company will play. And this must be decided only after careful consideration of the underlying economics of the business and the company's competences. It should not be made ad hoc.
The question of "how" is also strategic as most managers perceive it to be. What they may not perceive, however, is that it is next to impossible to decide on "how" without first answering the questions of ''who" and ''what." Deciding on "how" involves making choices on numerous issues, such as how to configure the value chain, what technology to adopt, what activities to handle inhouse and what to subcontract, what specific functional policies (purchasing, manufacturing, marketing, accounting, and so on) to adopt, how to organize internally, and so on. Although these decisions are obviously important ones, strategy is much more than this! Strategy is all about combining these activities into a system that creates the requisite fit between what the environment needs and what the company does. Thus, it is not just the development of individual strategic activities that is important, but also the combination of these activities into a reinforcing system.