How to define a company's digital strategy

A digital strategy is not about choosing channels, tools or campaigns. It is about understanding your business, deciding what you want to achieve and establishing what you need to build, in what order and with which resources.

Your company may have a good website, publish content regularly, invest in SEO and receive performance reports every month.

There may be professionals at work, tools running and a budget allocated to digital marketing.

Yet something fundamental may still be missing: a shared answer to three questions.

What do we want to achieve? Why do we need to achieve it? What should we do first?

When these answers are unclear, digital activities tend to develop separately.

The website gets redesigned because it looks dated. Social media accounts are opened because competitors are there. Advertising is funded to attract visitors. New tools are introduced because they promise better results.

Each decision may seem reasonable on its own.

But are they all contributing to the same objective? Do they address our customers’ needs? Can we maintain what we are building? Do we know which results we expect and how we will evaluate them?

That is where digital strategy begins.

Not with choosing a technology, but with understanding the business and the decisions that will allow digital resources to strengthen it.

Because having a digital presence is not the same as having digital direction.

And doing more does not necessarily mean making progress.

1. What a digital strategy is and what it is for

A digital strategy is a coherent set of decisions that connects a company’s objectives with the digital capabilities, assets and opportunities it needs to achieve them.

Its purpose is to establish a direction.

It helps you understand where the business stands, what value it offers, whom it matters to, what it needs to improve and how it can use technology to create, deliver and capture value.

It is not limited to attracting visitors or increasing sales.

It may also seek greater operational efficiency, better customer relationships, less dependence on sales channels, better organisation of company knowledge or new capabilities.

For example, a hotel may need more direct bookings. A restaurant may want to reduce the administrative work associated with reservations. An activity provider may be looking for a more efficient way to manage service availability.

All three have digital needs, but they require different decisions.

The solution cannot automatically start with building a new website, buying advertising or installing a tool.

First, we need to understand which problem we want to solve and which results would justify the investment.

Strategy is not the same as better execution

This distinction is fundamental.

In his article What Is Strategy?, Michael E. Porter explains that improving the efficiency of a company’s activities is necessary, but does not in itself amount to having a strategy.

Strategy involves choosing a position, developing activities consistent with it and accepting certain trade-offs. [1]

We can apply this principle to the digital environment.

A faster website is a technical improvement. A better-performing campaign is a commercial improvement. An automated process may be an operational improvement.

All can be valuable.

But none answers, on its own, the question of which direction the business should take.

Strategy helps us decide which improvements we need, how they relate to one another and what priority they deserve.

Execution seeks to do things well. Strategy establishes which things are worth doing and why.

Digital strategy, digital marketing and digital transformation

These concepts are related, but their scopes differ.

Digital strategy connects business direction with digital opportunities, capabilities and systems.

Digital marketing strategy focuses on how to use digital media and assets to develop the market, communicate the value proposition, generate demand and build commercial relationships.

Digital transformation may involve deeper changes to processes, organisation, technology, culture and the business model.

A company does not need to undertake a complete transformation to benefit from a sound digital strategy.

Sometimes, the right decision is simply to improve a few existing assets and connect them better.

What matters is that the activities address an identified business need.

2. The seven decisions that underpin a digital strategy

There is no universal combination of channels, tools or technologies that works for every company.

A family business, an industrial company and a hotel chain have different capabilities, customers and needs.

However, we can organise strategic work around seven fundamental decisions.

They are neither entirely independent stages nor a process that must be followed rigidly.

They form a system: what we discover about the market may change our value proposition, our objectives may require new capabilities and business constraints may force us to revisit priorities.

The aim is to make those decisions consistent with one another.

Decision 1. Understand the business and its actual situation

When I analyse a business, I do not start with its website.

I start by understanding the company in front of me.

What it offers, how it earns revenue, what it does particularly well, which resources it has available, what its limitations are and which situation it wants to improve.

Often, a company already holds considerable value: accumulated experience, reputation, specialist knowledge, business relationships or a particular way of delivering its services.

Strategy must recognise that value before identifying what is missing.

We also need to understand its position in its market.

Knowing what the company does well is not enough. We must investigate whether that value matters to its customers and how it compares with the available alternatives.

This involves analysing demand, competition, positioning and the conditions that influence purchasing decisions.

A strategy should not begin by assuming what the solution is. It should begin by investigating what the problem is.

To do this, it helps to separate observed facts, reasonable interpretations and questions that still need answers.

Only then can we build decisions on a sufficiently solid foundation.

Decision 2. Define the positioning and value proposition

A company needs to understand why it should be chosen over other alternatives.

This is not about finding an attractive advertising slogan.

It is about identifying a difference that matters, is understandable and is supported by the reality of the business.

Positioning defines the place we want to occupy in our market.

The value proposition explains what we offer, whom it matters to, what benefit it enables and why our solution deserves consideration.

A value proposition does not become strong by claiming that we are better.

It becomes strong when it explains a difference that matters and can be demonstrated.

Here, an essential relationship between strategy and communication emerges:

Claim → Evidence → Experience.

If we promise a personalised service, we must know what that means, show how we deliver it and ensure that the experience fulfils the promise.

If we talk about specialisation, we must be able to substantiate it.

And if we discover that the actual service does not yet support our proposition, we may need to improve the business before investing in communicating it.

A new website can make a difference more visible.

It cannot, on its own, create a difference that does not exist.

Decision 3. Understand whom we want to serve and how they decide

Not every customer is an equally good fit for a company.

Some gain more value from our proposition. Others need services we cannot deliver properly or have expectations incompatible with how we work.

Defining the ideal customer helps us recognise which people or companies it makes sense to build a relationship with.

We then need to understand how they make decisions.

What triggers their search, what they need to achieve, which alternatives they consider, which objections arise and which information helps them move forward with confidence.

For this, we use tools such as buyer personas and customer journey analysis.

But we must avoid turning them into profiles of imaginary characters.

A demographic description is not enough to guide a strategy.

What matters is turning conversations, data and sales experience into knowledge that supports decisions.

Research may even reveal that our initial value proposition needs adjusting.

Understanding the customer and defining the positioning are decisions that enrich one another.

To explore this work further, read the guide “Ideal customer and buyer persona: differences, examples and how to define them”.

Decision 4. Set objectives and criteria for evaluating success

“We want to sell more” is a legitimate aspiration.

But it is not enough to guide a digital strategy.

We need to understand what we want to improve, in which part of the business and under which conditions.

A company could increase sales while reducing profitability.

It could also receive many more sales enquiries without having the capacity to handle them.

That is why we must connect digital objectives with the outcomes that actually matter.

Once the objective is defined, we need indicators to track its development.

These might include direct bookings, net revenue by channel, acquisition costs, qualified enquiries or behaviour within the booking process.

Website visits and social media followers can also provide information.

But their growth does not automatically demonstrate that the business is making progress.

A metric is useful when it relates to an objective and helps us interpret what is happening.

Google Analytics, for example, uses the concept of a key event to identify interactions that are particularly important to a business’s success. [3]

This does not mean that everything can be measured through a web analytics tool alone.

Some decisions will need commercial, operational or financial information from other systems.

The aim is not to measure everything. It is to have the information needed to evaluate and correct our decisions.

Decision 5. Design digital assets as a system

A company may have a website, social profiles, content, forms, booking tools, campaigns and databases.

But having all these pieces does not mean they work together.

An advert may attract people to a page that does not answer their questions.

A website may explain a service properly but make it difficult to purchase.

A form may collect enquiries that nobody records or analyses.

And an artificial intelligence tool may work with different information from that used by the sales team.

Each element may work technically while the whole creates friction.

Strategy must identify the role of each asset and how it relates to the others.

An asset may attract a particular type of demand, explain the value proposition, resolve an objection, facilitate a purchase, organise information or sustain a relationship.

It may also serve an operational, informational, legal or trust-building role without producing direct sales.

What matters is understanding its contribution. When that asset is content, its usefulness to people should guide what we publish. [4]

Strategy should help us recognise what to preserve, what to correct, what to connect and what to build.

The organisation of information is also becoming increasingly important.

A business needs its services, terms, prices and features to be understood correctly by people and by the authorised digital systems using that information.

This may require well-structured content, current data, consistent processes and reference documentation.

It does not guarantee that a search engine or AI agent will recommend our services.

But it helps us build assets that are easier to understand, maintain and prepare for different uses.

Decision 6. Set priorities and accept trade-offs

A useful strategy is not an endless list of things that would be interesting to do.

It means deciding which ones deserve our resources.

And, especially, which ones we should not do yet.

This is one of the hardest decisions.

There are always new opportunities: a social network, a campaign, a tool, a technology or an idea that looks promising.

But every initiative requires time, budget, knowledge and maintenance.

And those resources are limited.

Prioritising means understanding each action’s expected impact, cost, dependencies, available evidence and our capacity to sustain it.

We may need to clarify the value proposition before rewriting the website.

We may have to fix a form before investing in advertising.

Or we may discover that a relatively small operational improvement can create more value than developing an entirely new sales channel.

The order depends on the reality of the business.

In Good Strategy/Bad Strategy, Richard Rumelt stresses the importance of recognising real challenges and concentrating efforts on coherent actions to overcome them. [2]

This idea is especially valuable for small and medium-sized companies.

Strategy protects our resources from being spread too thin.

We do not always need to do more.

Often, we need a better understanding of what to do first.

Decision 7. Define capacity, responsibilities and review

A strategy may be perfectly reasonable on paper yet unworkable in practice.

It may require skills we do not have, an excessive budget or time the team cannot commit.

That is why operational capacity must be part of the decisions from the start.

We need to identify who will be responsible for each area, which skills are available, what we need to hire and which resources maintaining the assets will require.

We must also establish how changes will be approved and which information will be used to evaluate results.

Strategy should not depend solely on the memory of the person who designed it.

It must be documented sufficiently for those involved to understand, apply and review it.

This is especially important when suppliers, collaborators or artificial intelligence tools are involved.

Technology can help us analyse information, automate certain tasks and work more consistently.

But we need to establish which sources are valid, which decisions are approved, which information may be used and who supervises the results.

Finally, strategy must remain open to learning.

That does not mean changing direction whenever a new tool appears.

It means testing our decisions against reality and correcting them when the evidence justifies it.

A strategy must provide continuity without preventing evolution.

3. Practical example: building a hotel’s digital strategy

Let us see how these decisions relate in a specific business situation.

Imagine an independent hotel in the Pyrenees with a good reputation, repeat guests and an established offering.

The hotel receives bookings through different channels, but management wants to increase direct bookings and reduce some of its commercial dependence on intermediary platforms.

Its first idea is to invest in a new website and develop advertising campaigns.

That might seem a good starting point.

However, we do not yet know whether those investments will solve the problem.

This example is entirely illustrative. It does not represent an actual audit or results achieved for a PhiStudio client.

Step 1. Investigate before deciding

We would begin by reviewing the business, its sales channels and its digital assets.

We need to understand how customers currently find the hotel, what each channel costs, which bookings it generates and how the booking process works.

We would also investigate the hotel’s value proposition and how it presents itself against other establishments.

We might discover different situations.

Perhaps the website attracts interested visitors, but its booking system makes completing a reservation difficult.

Perhaps customers see no reason to book directly.

Or the hotel may convert visitors to its website well, but lack sufficient demand of its own.

Each diagnosis would lead to a different strategy.

That is why, before recommending a solution, we must identify what is happening.

Step 2. Define the strategic problem

Suppose the research confirms that the hotel offers a distinctive experience recognised by its guests, but this difference barely appears in its digital communication.

We also find friction in the direct booking journey and few mechanisms for maintaining relationships with regular guests.

We can now define the problem more precisely:

The hotel has an offering its customers value, but its digital assets are not making sufficient use of that value to develop a direct commercial relationship.

This formulation is much more useful than saying it needs a new website.

It describes a situation and lets us start building criteria for action.

Step 3. Establish a direction

The strategic decision could be to develop a profitable direct channel progressively, supported by a clearer value proposition, a simple booking experience and an ongoing relationship with guests.

Notice that we have not yet decided to buy advertising, open a social media account or rebuild the website.

We have established which capability we want to develop.

Tools and assets should be chosen according to that direction.

Step 4. Order the priorities

Based on the diagnosis, we could establish a sequence of work.

The final order would depend on the hotel’s data and constraints.

The first and second priorities might be developed simultaneously. Or we might discover that direct demand is already sufficient and that the main problem lies exclusively in completing bookings.

Strategy should not turn a provisional sequence into a rigid obligation.

It should show the dependencies that justify each decision.

Step 5. Decide what not to do yet

In this scenario, we could postpone increasing advertising investment until we have checked that the booking journey works properly.

We could also temporarily rule out new channels that would require disproportionate effort.

These trade-offs serve a purpose.

They concentrate resources on what can unblock the main problem.

They are not decisions against growth.

They are decisions intended to make the investment required to achieve it more sustainable.

Step 6. Define how we will evaluate the outcome

We need to establish a starting position and observe how it develops.

Checking that website visits increase would not be enough.

We should examine whether direct bookings improve, how much revenue they generate, which costs they involve and how their profitability develops.

We should also consider factors such as the season, price changes and available occupancy to avoid automatically attributing every variation to digital activities.

If the results contradict our hypotheses, we will revisit the decisions.

If we find a sustainable improvement, we can consider further investments.

What we have achieved

We have not yet run a campaign or developed a new website.

Yet we already have something valuable.

We know which problem we want to solve, which direction we will follow, what we need to improve first, which investments we can postpone and which information we will use to evaluate progress.

That is the initial result of strategic work.

Execution comes afterwards.

And now every intervention will have a clear reason.

4. How to define your own company’s digital strategy

You do not need a specialist department to start. You need to define the decision you want to improve and test it against the reality of the business.

Define the problem before choosing the solution

“We need a new website” proposes a solution. “Our customers do not understand the difference between our services” describes something we can investigate.

“Post more on social media” is an activity. “Develop a more stable relationship with our regular customers” expresses a business need.

That difference guides the diagnostic questions.

Compare what you believe with what you know

Listen to the people who serve customers, prepare quotes or handle issues. Review the commercial, financial and digital information available. Investigate market alternatives and the needs your customers express.

Separate observed facts, hypotheses and open questions. If you do not know what causes the problem, investigating it may be the first priority.

Turn the diagnosis into decisions

A diagnosis becomes strategy when it enables you to choose an intervention and explain why that one rather than another.

Suppose your website receives visits but few suitable enquiries. Before investing in more traffic, you need to find out whether the right people are arriving, whether they understand the offering and whether they can contact you easily.

If the evidence shows that the problem is how you explain the service, the decision may be to improve that page first and postpone advertising. Progress will be signalled by enquiries that fit your offering better, rather than more visits.

For every priority, this must be clear: what we know, what we will change, what we are postponing and how we will check the outcome.

Check that you can execute it

Identify owners, skills, investment and maintenance. If the plan requires you to renew the website, create content, implement tools and open several channels simultaneously, you may need to adjust its scope and pace.

A realistic strategy recognises the conditions needed to move forward.

5. Digital strategy and the marketing plan: how they relate

Although often used as synonyms, they serve different purposes.

Strategy establishes the direction, main decisions and criteria that should guide digital development.

The marketing plan turns decisions relating to the market, acquisition, communication and commercial relationships into specific initiatives.

We can see this through the hotel example.

Strategic decision

Progressively develop a profitable direct booking channel, supported by a distinctive value proposition, a suitable booking experience and a stronger relationship with guests.

Marketing plan

Determine which audiences we want to reach, which messages we will use, which content we need, which channels can help generate demand and how we will evaluate initiatives.

Execution

Fix pages, develop content, configure tools, activate campaigns or implement approved improvements.

The plan specifies which actions will take place, who will be responsible, which resources they will need, when they will happen and which indicators will allow them to be monitored.

Execution puts those decisions into practice.

Not every action arising from a digital strategy belongs to marketing.

For example, improving an operational booking system, integrating internal tools or reorganising business information may require a specific technical or operational plan.

That is why we must avoid making the marketing plan the sole instrument for executing the entire digital strategy.

Strategy establishes which capabilities the business needs to develop. Plans organise how they will be developed. Execution builds and improves those capabilities.

If we create a plan without strategic direction, we risk organising activities that do not address a sufficiently understood need.

But if we define a strategy and never translate it into responsibilities, resources and actions, the work remains an intention.

Both dimensions are necessary.

6. What a useful digital strategy should produce

So far, we have discussed analysis and decisions.

But another important question remains: what does the company actually have in its hands after defining its strategy?

The answer should be more than a presentation of conclusions.

A strategy needs to become explicit, shared and usable knowledge.

It should allow the business owner, their collaborators and the professionals involved in digital development to understand what has been decided, why and under which conditions.

Not every company needs the same number of documents or the same depth.

However, the result should retain certain fundamental elements.

A diagnosis describing the starting situation.

A clear definition of the business, its positioning and its customers.

A set of objectives, priorities and decision-making criteria.

A map of the necessary assets and capabilities.

And a shared reference to guide execution, evaluate results and review the strategy.

Strategy as connected knowledge

At PhiStudio, we have developed our Digital Strategy methodology around twelve connected documents. The depth of each is adjusted to the business and the agreed scope.

We do not regard them as twelve independent reports.

Each explores one dimension of the business and provides information the others need.

The purpose is to turn scattered knowledge into a strategic foundation that can be used to make decisions, communicate, build assets and work with collaborators.

We can organise them into four broad groups.

Understand the reality of the business

1. In-depth Audit and Diagnosis

Analyses existing assets, digital presence, positioning and competition.

Helps identify strengths, gaps and opportunities, distinguishing conclusions supported by information from issues that still need investigation.

2. Strategic Immersion and Synthesis

Draws out the knowledge of key people through interviews and analysis of business sources.

Organises their experience, objectives, ambitions, constraints and criteria so that the strategy represents the company’s reality rather than only an external interpretation.

3. Business Model

Describes how the company creates, delivers and captures value.

Connects customers, offering, revenue, capabilities, limits and economic logic, making it possible to assess whether a proposition or investment fits how the business operates.

Define identity and direction

4. Positioning and Value Proposition

Establishes whom the company matters to, which place it wants to occupy in its market and which differences it can defend with arguments and evidence.

5. Strategic Manifesto

Sets out the purpose, principles, commitments and trade-offs that should guide business decisions.

Enables new opportunities to be assessed without losing consistency with its identity.

6. Buyer Personas and Journey

Organises knowledge about the profiles that buy, decide or influence purchases.

Helps understand their needs, objections and decision points so that the offering and experience can be adapted.

Turn direction into communication and operational criteria

7. Master Storytelling

Builds the business’s central narrative from its history, purpose, value proposition and customers.

Establishes a consistent narrative foundation for presentations, pages and content.

8. Tone, Voice and Visual Guide

Defines criteria for expressing the business’s identity through language, tone and visual decisions.

Supports the work of writers, designers and AI tools without necessarily replacing a complete brand identity project.

9. Strategic Playbook

Turns principles and decisions into a guide for action.

Helps resolve recurring situations, assess alternatives and apply strategic criteria in everyday work.

Plan assets and sustain evolution

10. Marketing Plan

Connects objectives, audiences, channels, initiatives and metrics.

Establishes which marketing activities make sense and how they should be organised, without confusing planning with the subsequent production and management of campaigns.

11. Asset Map, Priorities, Roadmap and Measurement

Identifies existing assets, those that need improvement and those worth developing.

Establishes priorities, dependencies, a roadmap and criteria for observing results.

12. Governed AI Context

Organises documentation, sources, approved decisions and limits on information use.

Provides people and artificial intelligence tools with a consistent reference foundation, including consultation criteria, permissions and supervision.

Why they must be connected

Imagine that research reveals an important difference between the customers we aimed to attract and those who actually find the greatest value in our services.

That discovery could change the positioning.

It could also require changes to the value proposition, storytelling, website architecture, commercial priorities and the criteria we use when working with AI.

If each document stands alone, maintaining consistency becomes complicated.

When there is a clear relationship between decisions, we can identify what needs reviewing and avoid different teams working with contradictory versions of the strategy.

The value does not lie in accumulating documentation.

It lies in building a knowledge base that preserves judgement, makes it shareable and allows it to be updated when business realities change.

7. A digital strategy should also prepare the business to evolve

For a long time, digital strategy has mainly been associated with gaining visibility, attracting users to a website and converting visits into customers.

These functions remain important.

But the way people and companies use digital information is evolving.

Search engines are introducing new ways to present answers, and artificial intelligence tools can participate in research, comparison and work processes.

Some organisations are also introducing agents able to consult information and perform tasks within authorised systems.

This does not mean that we should abandon current channels or rebuild our strategies around every new technology.

It means that we must distinguish lasting business objectives from the tools we use to achieve them.

A restaurant will still need to communicate its offering, prices and terms correctly.

A hotel will still need to manage availability, explain its services and provide a reliable booking experience.

A company will still need to understand its customers and develop sustainable commercial relationships.

What may change is how that information is consulted, which systems participate in the decision and which tools are involved in purchasing or service delivery.

Build assets that retain their value

A digital strategy should help the business maintain and evolve its knowledge, content and capabilities.

For example, clear, consistent and current service information can be useful both to website visitors and to digital systems capable of interpreting it.

Structured documentation can also support internal work with AI tools.

But we must not confuse preparation with a guarantee.

Publishing structured information does not ensure that an external platform will show our company, and using artificial intelligence does not automatically make a process more efficient.

We need to evaluate the possibilities, limitations, costs and risks of each technology.

We must also ensure that personal data use rests on an appropriate legal basis and respects applicable obligations. [5]

Strategy is not about pursuing every innovation.

It is about developing capabilities and assets that continue to create value for the business, even when the tools used to manage them change.

8. How to recognise whether your company has a real digital strategy

A strategy proves useful when it helps you evaluate an opportunity without relying on improvisation. If someone proposes rebuilding the website, launching a campaign or introducing an AI tool tomorrow, check three things:

• Consistency: does it contribute to an objective and strengthen your proposition?
• Priority: which resources does it require, and which other initiative does it displace?
• Learning: how will you know whether it worked, and when will you review the decision?

A good strategy does not turn every novelty into an obligation or remain unchanged in the face of new evidence.

If you know what is worth doing and can explain why, you already have criteria for direction.

9. Clarity before investing in execution

Your company probably already has knowledge, experience, relationships and assets to build on. Strategy helps recognise that value, identify what prevents you from using it and decide what should change first.

It does not eliminate uncertainty or guarantee results. It leaves a shared foundation for allocating resources, guiding collaborators and reviewing decisions as you learn.

A good strategy does not end when we approve a document. It begins to prove its value when it helps us make the next decision.