Strategy cheat sheets

When sales rise but profit falls, reconcile the change before prescribing a fix. Start with revenue less variable and fixed costs, then split revenue into price, volume and mix.

Define the industry by customer substitution, then examine who can capture the value. List the alternatives customers can switch to and the suppliers, buyers, rivals and entrants that affect terms.

Price elasticity compares the percentage change in volume with the percentage change in price. Use it to estimate the volume trade-off, then calculate contribution with variable cost included.

Throughput is constrained by the step that cannot keep up with arrivals. Measure effective capacity during the busiest period, allowing for downtime, changeovers and failed work.

Compare projects by incremental cash flows, timing and scarce resources. When capital is limited, a project can pass its own hurdle and still lose to a better use of the same capacity.

Group customers by first purchase period or acquisition route. Compare the share returning at the same elapsed time so that new customers have equal opportunity to reorder.

A distributor can be rewarded for placing stock, for selling through to an end buyer or for servicing the account. Choose a measure that matches the behaviour you need and can audit.

Write the decision and outcome first. Assign comparable units to alternatives, choose a measurement window and analyse people in their assigned group. Track harms such as refunds alongside the primary outcome.

Define the population and the list or process you use to reach it. Report who was excluded, who did not respond and how the missing groups could change your decision.

Select tasks where the assistant can be compared with the current process. Measure resolution quality, error cost, reviewer time and coverage. Keep escalation available for ambiguous cases.

A scenario combines assumptions that could move together. Sensitivity analysis changes one input at a time to see which assumptions matter most. Use both to choose a commitment you can revisit.

Lead with the choice, its objective and the evidence that distinguishes the options. Specify what you need the board to approve and the condition that would bring the decision back.