A key ingredient to success is to have a clear, realizable, impactful business strategy. But what is a business strategy?

I developed my view for part of my book, Strategic Market Management (updated edition coming soon), and I deduced that four dimensions define it. The first concerns where you should compete, and the remaining three concern how you should compete.

The first dimension concerns the product-market investment strategy, the scope of the business and the dynamics and resource priorities within that scope. Which products should be offered, and which segments should be targeted? Which should get aggressive investment to enter or grow, which should get minimal investment, and which should be milked, exited or avoided? Where should growth come from? Options include bringing existing products to new markets (market expansion), bringing new products to existing markets (product expansion), or entering new product markets (diversification).

The second dimension concerns the customer value proposition, which needs to be relevant and meaningful to the customer, reflected in the positioning of the product or service, sustainable over time and differentiated from competitors. In can involve elements such as providing good value (Wal-Mart), excellence on an attribute such as getting clothes clean (Tide), quality (Lexus), product line breadth (Amazon), innovative offerings (3M), personality that connects (Harley-Davidson), organizational values (saleforce.com), or a shared interest (Pampers and baby care).

The third dimension concerns strategic assets or competencies that provide a sustainable competitive advantage. A strategic competency is what a business unit does exceptionally well—such as a customer relationship program, manufacturing or promotion—that has strategic importance to that business. It is usually based on knowledge or a process. A strategic asset is a resource, such as a brand name or installed customer base that is strong relative to competitors. Strategy formulation must consider the cost and feasibility of generating or maintaining assets or competencies.

The fourth dimension concerns a supportive set of functional strategies or programs and the executional elements needed to deliver on the value proposition. Creative excellence in conceptualizing and implementing these strategies will be critical to success. They could be around offering development, new product introduction, customer relationships, brand building, communication, social technology, distribution, coordinating global markets, quality, logistics and more.

The concept of a business strategy is central to most businesses, but, strangely, there is no accepted definition. As a result, the process and its output can be all over the map.