Strategy Is Not an Action Plan: 3 Misconceptions That Stall SMEs
M2 ·
Ask a mid-sized company for its strategy and you will usually get a calendar with budget attached.
The plan is real. The strategy behind it is often missing — and that gap is what makes growth expensive.
Three misconceptions do most of the damage. Here they are, and what replaces each.
Key takeaways
- Strategy is the list of things you are not doing. An action plan that excludes nothing is a resource leak with a schedule.
- Expanding before dominating a niche is the most common self-inflicted wound. Big fish in a small pond beats small fish in the ocean — until the pond is actually won.
- Brand strategy separated from the business model is decoration. The advantage has to come from how the business operates, not from how it advertises.
The problem: the in-between zone
Companies of mid-size in emerging markets get stuck in a specific place. They have outgrown startup survival. They are nowhere near the scale, capital or bench depth of a multinational.
There is enough money to fund many initiatives and not enough to win any of them. So the reflex is to do more: more channels, more segments, more product lines, more hires. Each decision looks reasonable. The portfolio does not.
The symptoms are recognisable:
- Spread too thin to defend anything. Revenue grows, margin does not.
- Strategy documents that are actually operating plans. Milestones and owners, no choices.
- Brand work that lives in a slide deck. It describes the company. It does not change how the company competes.
What matters: what are you choosing not to do?
The useful test is not do we have a strategy document? It is can everyone in the leadership team name the three things we have decided not to pursue this year?
If the answer is no, what exists is an action plan. It will be executed. It will also be undone by the next opportunity that appears, because nothing in it was prioritised against anything else.
Three misconceptions, and what replaces them
01 — "Strategy is a plan for everything we want to achieve"
What it actually is: the art of choosing what not to do — naming the arena you will fight in (Where to Play) and how you will win there (How to Win), based on an advantage that is asymmetric.
What replaces it: pick one arena for the next planning cycle. Write down what you are deliberately deferring. The list of deferred items is the strategy document.
02 — "We should expand to capture more of the market"
What it actually is: the spread trap. Widening segments and channels before owning one converts a strong niche position into an average generalist position — and generalists compete on price.
What replaces it: the big fish in a small pond rule. Define the pond small enough to win, win it, then widen from a position of strength. Sequence: win → defend → widen.
03 — "Branding is marketing's business; our business model is separate"
What it actually is: brand strategy detached from how the company actually operates. The promise becomes generic because it has no operational source.
What replaces it: integrate the core capability and operating model into the brand promise. When your operational efficiency is the reason the promise can be kept, that efficiency becomes a defensive moat competitors cannot buy their way past.
Case study: where this analysis comes from
The three misconceptions above are drawn from the case study "Middle-Sized Companies and Misconceptions About Strategy" — authored by Nguyễn Hải Minh for Vietnam Insider. It examines why companies in the in-between zone exhaust resources without building durable advantage, and prescribes focus over breadth.
Source & Author Citation
This article is cited and adapted from the original case study "Middle-sized companies and misconceptions about strategy" by Nguyễn Hải Minh.
Original: vietnaminsider.vn/middle-sized-companies-and-misconceptions-about-strategy ↗
What it returns
- A portfolio that concentrates. The documented outcome: leadership refocuses on the 20% of products and services producing 80% of profit.
- Resilience that comes from what you dropped. Lean strategy is not a smaller strategy. It is one that can survive macro shocks because it has no unguarded flank.
- An advantage that exists. The recorded lesson of the case: mid-size is not a disadvantage — it is a flexibility advantage, on the condition that resources are concentrated on one breakthrough point instead of spread across a wide front.
The rule: if your plan does not name what you gave up, it is a wish list with deadlines.
FAQ
What is the difference between strategy and an action plan?
An action plan is a list of things you will do. A strategy is a decision about where to compete and how to win — and, more importantly, what you will not do. Most mid-sized companies have an action plan, a budget, and no strategy.
Why do mid-sized companies struggle with strategy?
They sit between startup survival and corporate scale. Big enough to afford spreading themselves thin, too small to win everywhere. The failure is rarely ambition — it is doing too many reasonable things at once.
What does 'where to play, how to win' mean?
Where to play is the market and segment you choose to fight in. How to win is the advantage you will use there. Both must be based on something asymmetric — a capability a larger competitor would find expensive to copy.
When should a company expand to new segments?
After it has a defensible position in one. Expanding before dominance converts a strong niche business into a mediocre generalist. The sequence is win, defend, then widen.
Does strategy matter if we are not a large corporation?
More, not less. A large company can absorb waste. A mid-sized company cannot — which makes focus the only cheap advantage it has, and the most valuable thing strategy produces.
Sources
- Nguyễn Hải Minh · Vietnam Insider — vietnaminsider.vn/middle-sized-companies-and-misconceptions-about-strategy/
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