The Strategy Diamond is a framework developed by Donald Hambrick and James Fredrickson that helps organizations analyze and understand their strategy by examining five key elements, represented as facets of a diamond. The Strategy Diamond provides a holistic view of strategy and helps align different aspects of the organization’s strategy to create coherence and effectiveness.

The five facets of the Strategy Diamond are…

1. Arenas
   • Arenas represent where the organization chooses to compete, including markets, industries, customer segments, and geographic regions. This facet focuses on defining the scope of the organization’s activities and identifying the specific areas where it seeks to create value and achieve its strategic objectives.
2. Vehicles
   • Vehicles refer to how the organization plans to compete in its chosen arenas. This facet encompasses the different approaches, business models, and strategies the organization employs to achieve its goals. Vehicles may include product offerings, distribution channels, strategic partnerships, acquisitions, or other means of competing effectively in the marketplace.
3. Differentiators
   • Differentiators represent the unique value propositions and competitive advantages that set the organization apart from competitors. This facet focuses on identifying the key attributes, capabilities, or strengths that differentiate the organization’s products, services, or offerings and create value for customers. Differentiators may include product features, quality, branding, innovation, customer service, or other factors that drive competitive advantage.
4. Staging
   • Staging refers to the sequence and timing of the organization’s strategic actions and initiatives. This facet focuses on how the organization plans to stage its investments, expansions, product launches, or other strategic moves over time to achieve its long-term objectives. Staging involves prioritizing and phasing strategic activities based on considerations such as market dynamics, resource availability, and strategic priorities.
5. Economic Logic
   • Economic Logic represents the underlying rationale and logic behind the organization’s strategy, particularly in terms of how it creates value and generates returns for stakeholders. This facet focuses on the organization’s profit formula, revenue model, cost structure, and overall financial logic. It examines how the organization plans to capture value from its strategic activities and generate sustainable profitability over the long term.

The Strategy Diamond framework encourages organizations to consider and align these five elements of strategy to create a cohesive and effective strategic plan. By examining each facet of the diamond and ensuring coherence and alignment across all elements, organizations can develop robust and actionable strategies that drive sustainable competitive advantage and long-term success.