There is a common mistake we all do sometimes, and it’s to confuse capabilities and assets when developing an strategy.
Assets (brands, facilities, patterns, customer connections, cash…) cannot be center of the strategy of a company. If the assets should be the primary component of a strategy, then any successful company just have to re-invest their assets on the same strategy and continue being successful.
The problem is that assets tend to depreciate (patterns expire, machinery loses value…).
A capability, by contrast is yours, it can’t be stolen or easily bought by a competitor. A capability does not depreciate if you are using it and you are improving it, quite the opposite, it tends to growth and be stronger.
The more basic example that comes to my mind always is use of the patterns. A pattern, as asset expires and its contribution to the company depreciates. On the contrary the capability the company has in terms of R&D makes that continuously is able to produce new patterns that fits on the market demand covering a niche where we can continue growing.
I do not suggest that you ignore assets, they play a major role in how to go to the market and the capacity you have to execute a plan.
Count your revenue and losses focusing on the assets you have, but focus on capabilities when you are defining the direction of your business.
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