A Dynamic View of Strategy Presented by: Anne, Kosit, Blake.
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Transcript of A Dynamic View of Strategy Presented by: Anne, Kosit, Blake.
A Dynamic View of Strategy
Presented by:
Anne, Kosit, Blake
Activity
What would you do if you were……
Strategy
The Big Three!Who? – who are the customers?
What? – What are the products and/or services?
How? – How will the company go about their business?
Nespresso
The Initial Nespresso strategy was not working!
The Nespresso subsidiary was faced with choosing a new strategy for the product.
Who?
What?
How?
What is Nespresso?
http://youtube.com/watch?v=DfyeXrdZZ1o
Edward Jones
Securities
Competitors Include – Merrill Lynch, Smith Barney, Paine Webber
Differentiated their strategy to compete
Additional Examples
Edward JonesWho – Customers are individual investors who
live in areas with a sense of communityWhat – Long term and low risk investmentsHow – Focus on the end customer, never
manufacture a product but instead offer products from reputable sources
Edward Jones differentiates itself by its strategy
Uniqueness is Transitory
A position’s uniqueness will not last forever.
New strategic positions will be emerging continually.
Example: Xerox
Continually Emerging New Positions
Dominant competitors
- establish unique strategic positions in their respective industries.
Traditional competitors
- imitate their predecessors in an attempt to wrest market share from them.
Strategic innovators
- create a new market and run away with huge chunks of the market.
Continually Emerging New Positions
Industry Dominant Competition Traditional CompetitorStrategic Innovation
U.S. airline American Delta, United, Northwest Southwest
Car rental Hertz Avis , Europcar, National Enterprise Rent-A-Car
U.S. television broadcasting
NBC CBS, ABC CNN
U.K. banking Natwest Lloyds, Barclays First Direct
Earth- moving equipment
Caterpillar International Harvester, John Deere, J.I. Case
Komatsu
Steel U.S. Steel Bethlehem, Inland, National Nucor
U.K. supermarket Sainsbury’s Tesco, Asda, Waitrose Flanagan’s
Coffee General Foods (Maxwell House)
Procter & Gamble (Folger’s), nestle (Nescafe), Sara Lee (Douwe Eqberts)
Starbucks
U.K. insurance Norwich Union Prudental, Royal Sun Alliance Direct Line
Photocopier Xerox IBM, Kodak, Ricoh Canon
U.K. airline British Airways Virgin Atlantic, British Midlands, other European carriers
EasyJet
Securities Merrill Lynch Smith Barney, Dean Witter, Paine Webber Edward Jones
Computer IBM NCR, Control Data Microsoft
Table 10.2 Undermining Established Strategic Positions
Canon’s market share in the copier business jumped from
0% to 35% in about 2 years.
Grow from a chain of 11 stores and sales of $1.3 million in 1987 to
280 stores and sales of $163.5 million in 5 years.
Preparing for the Unknown
Option One: Become the Innovation
Option Two: Exploit someone else’s innovation
Being Ready
Why many companies failed?Lacking competencies Being a late adopterTrapped in customary way of competing Not effectively manage the organization
How to prepare for innovation?
Monitoring system to identify turning point
- Focus on Strategy > $$$
- Company’s performances, i.e.
employees’ morale, customer
satisfaction, and distributor feedback
How to prepare for innovation?
Prevent cultural and structural inertia- A culture welcoming change and learning
- Paul Cook (founder of Raychem)
“to make the company' own products
obsolete everyday”.
How to prepare for innovation?
Develop process allowing experimenting with new ideas
- Experimentation help reveal potential of success of new innovation
- “let chaos reign” ( Intel’s Andrew Grove)
How to prepare for innovation?
Prepare for required competencies- Internal Building the appropriate
competencies and skills
- External look at outside to notice
a significant change
How to prepare for innovation?
Manage the transition
- Decide to adopt the new position
- Keep balance between the “old”
and the “new”
Dynamic Strategy
Find UniqueStrategic position
Complete in this position
By becoming better than others
Make transitionFrom old position
To new
Search for newStrategic Positions
Manage old and new Positions simultaneously
Jump into the new business
Essay questions
1. If you were IBM, how should you respond the Dell entrance in the early 1980s?
2. What is a correlation between a dynamic strategy and distinctive strategy?
3. Identify and describe the 3 big questions that a company choosing a new strategy must answer?
Thank You
It’s fun time