The third and final ingredient of a superior strategic position is to develop the necessary competencies and the appropriate organizational environment (or context) that will support the choices made. By organizational environment, I mean four basic things: the organization's culture, its incentives, its structure, and its people.
This means that to create a superior strategy, a company must think beyond markets, products, and customers. It must also decide what competencies to develop and what organizational context to create so as to facilitate the implementation of its strategy. But even after deciding on competencies or culture, structure, and incentives, the firm is still not done with strategy. As in the case of deciding on "how," the real challenge is to develop the individual pieces and then put them together in such a way that they support and complement each other on one hand while they collectively support and promote the chosen strategy on the other. The task is not only to create the appropriate individual parts of the system but to put them together in such a way as to create a strong and reinforcing system.