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A Dynamic View of Strategy

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.

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A Dynamic View of Strategy

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  1. A Dynamic View of Strategy Presented by: Anne, Kosit, Blake

  2. Activity • What would you do if you were……

  3. 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?

  4. Nespresso • The Initial Nespresso strategy was not working! • The Nespresso subsidiary was faced with choosing a new strategy for the product. • Who? • What? • How?

  5. What is Nespresso? • http://youtube.com/watch?v=DfyeXrdZZ1o

  6. Edward Jones • Securities • Competitors Include – Merrill Lynch, Smith Barney, Paine Webber • Differentiated their strategy to compete

  7. Additional Examples • Edward Jones • Who – Customers are individual investors who live in areas with a sense of community • What – Long term and low risk investments • How – Focus on the end customer, never manufacture a product but instead offer products from reputable sources Edward Jones differentiates itself by its strategy

  8. Uniqueness is Transitory A position’s uniqueness will not last forever. New strategic positions will be emerging continually. Example: Xerox

  9. 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.

  10. Continually Emerging New Positions Table 10.2 Undermining Established Strategic Positions 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. Canon’s market share in the copier business jumped from 0% to 35% in about 2 years.

  11. Preparing for the Unknown Option One: Become the Innovation Option Two: Exploit someone else’s innovation

  12. Being Ready Why many companies failed? • Lacking competencies • Being a late adopter • Trapped in customary way of competing • Not effectively manage the organization

  13. 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

  14. 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”.

  15. 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)

  16. 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

  17. How to prepare for innovation? • Manage the transition - Decide to adopt the new position - Keep balance between the “old” and the “new”

  18. Dynamic Strategy Jump into the new business Find Unique Strategic position Complete in this position By becoming better than others Search for new Strategic Positions Make transition From old position To new Manage old and new Positions simultaneously

  19. Essay questions If you were IBM, how should you respond the Dell entrance in the early 1980s? What is a correlation between a dynamic strategy and distinctive strategy? Identify and describe the 3 big questions that a company choosing a new strategy must answer?

  20. Thank You It’s fun time

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