What is external strategic consistency?
External consistency relates to the alignment between the firm’s strategy and the environment that it is operating. Firms with high external consistency are aligned with the environment – they are meeting the expectations of the market. In comparison, firms with weak external consistency are miss-aligned with the environment – their strategy is out of alignment with external demands.
Dimensions of fit with the external market
Features demanded by customers
The first dimension of external consistency is how well the products that the firm is selling meet the needs and demands of customers. Poor alignment may involve a company attempting to sell a product with features that the customer doesn’t want, or missing features that the customer does desire.
Trends in the market environment
Another component of external consistency is how well the company is responding to environmental changes. If the firm is able to identify and capitalize on new opportunities this would indicate a high degree of external consistency.
The opposite is true if the firm is not responsive to changing market demands. For example, while sustainability concerns were not a primary concern several decades ago, they are an increasing concern among buyers. Firms that are better aligned with this change are better-placed to capitalize on the changing customer preferences.
Your offerings are competitive with competitors
Another component of the external environment is competitor offerings. Having offerings that are competitive relative to other firms is a final component of external consistency.
Final thoughts: Don't forget internal consistency
While having an offering that meets external demands is clearly a key component of firm success, it is also important that the resources within the firms are aligned with one another. It is important that firms recognize the importance of both external consistency – how well you are relative to the environment, as well as internal consistency – how well the resources of the firms are aligned with one another and the overall strategy.