Financial Logic

Financial Logic

Financial Logic — also referred to as Economic Logic — is one of the six dimensions of the BRI Strategy Framework. It is the combination of all the strategy choices, beliefs, and assumptions that drive the financial side of a strategy hypothesis: the business model, unit economics, market sizing, pricing, cost structure, and the path to a self-sustaining return. It is where a strategy's attractiveness is pressure-tested against the numbers — and against the uncertainty in them.

Where it fits — and where to go deeper

Financial Logic maps to the Viability lens of the DFV evaluation and houses the narrow "business model" concept (how production units are sold and value is captured), built up from unit economics and market sizing. For the full treatment, see the Strategy Framework pillar at /supporting/strategy-framework. Related Terminology Index entries: Business Model; Unit Economics; Market Sizing; Viability; Staging.

Sources

  • Donald C. Hambrick & James W. Fredrickson, "Are You Sure You Have a Strategy?" Academy of Management Executive, 15(4) (2001) — the "economic logic" element the dimension extends.
  • BRI Associates, Strategy & Innovation Methodology — Financial Logic (Economic Logic) as a dimension of the six-dimension Strategy Framework (/supporting/strategy-framework).
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