Strategy is a coherent response to a specific challenge, built from three linked parts that Richard Rumelt calls the "kernel": an honest diagnosis of the core obstacle, a guiding policy for dealing with it, and a set of coherent actions that follow from that policy. It names the hardest part of the problem and commits to a way through it, rather than listing everything an organization would like to achieve.
Because a real strategy chooses, it also excludes: resources and attention concentrate on the actions that matter and are withheld from those that do not. In a private-equity context the same idea appears as the investment thesis — the owner's hypothesis for why an asset will be worth more at exit — so when a portfolio company's strategy and the deal thesis are not the same document, value tends to leak in the gap between them.
