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Strategic Positioning & Strategic Renewal, by G8: Michella Stephen…
Strategic Positioning
&
Strategic Renewal
Generic Business Strategies
ways of how companies create "
competitive advantage
"
Narrow target market
Focused low cost
definition
Scale economies may not matter
Avoid customer segments or channels that are too costly to serve
Serving all customers undermines low cost model
exp: hamburger chain
Checkers or Rallies focus on drive-thru sales
, they're losing some eat-in customers, but they avoid the real estate and operational cost of catering to these customers, and
have lower costs overall by focusing on the drive-thru business.
Focused differentiation
exp: Prada, Ralph Lauren, Lamborghini cars, Rolex watches, or Louboutin shoes.
definition
Targeted at a
narrower market segment
and
limited distribution channels
, in order to promote exclusivity around the product and making them
more valuable to customers
Broad target market
Cost
Cost Leadership
exp: in US, Walmart
definition
Emphasizes on
controlling costs
to generate economic value added and profits.
-Similar Product -Lower Cost
how to apply it
Study the business and prioritize
where most of the cost being incurred.
Once it has been identified, we can find the way of
how the firm's resources, capabilities, or activities systems can reduce these costs
.
Cost drivers:
Scale / Scope economies, Input costs, Production techniques, Product design, Capacity utilization, Organizational or managerial inefficiency
Value
Differentiation Advantage
exp: in US, Nordstrom
definition
-premium price -unique product
Emphasizes on
value creation
for customers and
produces higher EVA and profits
How to apply it
Identifying
customers’ value drivers
from
Market research & company insights
, because value is that unlike cost, it does not come in one currency.
figuring out how to
deliver the value from firm's Activities, resources, capabilities
Value drivers:
Product features, Customer service, Customization, Complements
Expert's Interviews
Catalytic
Focused on the value of products in narrow target market (Focused differentiation)
avoids feature wars, because there is always someone who's going to have a better feature.
provide an overall offering, instead of selling someone else's lack of a feature or specific features.
Country Financial
(Focused low cost) : Focused on Narrow target market (middle-income households), and cost advantage
value added: advice
Avant
(Differentiation advantage) Strategies: focused on transparency and clarity of product, ease of use, real time in nature, service and customer orientation, regulatory environment and scheme.
Strategic Renewal
strategic misalignment
environmental change
internal decline
ex: nokia and blackberry
Dynamic capabilities
capabilities that enable a company to change resources or capability
ex: capabilities for conducting acquisition, alliances,new product development,bussiness development or organizational transformation
3 P framework
Processes
well-developed activities and routines
Positions
resources owned or available
Paths
opportunities,strategic options
ex:Fujifilm
excutive expert experience
large company
harder to make changes
small startups
flexible in making changes
Dual strategy
competitive advantage
pursue cost leadership
pursue differentiation advantage.
example
swedish car company
an aircraft manufacturer and introduced its first car
1960s had developed a very distinctive car design that was instantly recognizable
1989,has hard time to get a profit from the traditional model
general motor acquired its 50% stock and change its strategy from differentiation to reduce cost
lesson
GM fail to retain SAAB company key features
difficult
try to create more differentiation will inflate the cost
try to cost control will undermine the differentiation
definition
a strategy that simultaneously does both, increases customer value to some extent and reduces cost at the same time,
Method
manage cost-differentiation tradeoffs significant managerial innovation
managerial innovation needed to be clear
DIfferentiation:customer can customize their computer
cost control:because dell only produce the laptop according the request its make the company to avoid purchasing unnecessary product
DIfferentiation: total quality management
cost control: TQM make the company to avoid to spend unnecessary cost in the rework,repair and identifying source problem
Manager's Journey
Effective Strategic Leader
make five or ten strategic decision to make over
making a few critical decision at the right time
Require Judgement
Most time
Focus
Prioritize the most important
Put aside the inherent kind of human fallacy of being short sighted
Weighing short-term benefit
Lot of advice
Big Dream
Big problem to resolving
Big Picture
Humility
Critical your own skills
Find things to enjoy
Lot of lack
Tactical Plan
Focus on the word strategic thinking that strategy is something with the tactical
Trying to hoist themselve up by their own bootstrap and end up with that big dream
Most difficult good strategic
Passionate
Really understand yourself as a leader
Education
Opportunity to talk with people
non analogues companies
Example
MBA Program
non analogues industries
Primary things
Data
Sort of metric to meassure experiment
Technology
Improving the margins
Good manager
strategic direction
Capital raising
Vision
Massive amunt of discipline
Good Strategic Leader
Strengths and Weaknesses
Encouraging open discussion
Know yourself
by G8: Michella Stephen Caroline Albert
