Week 6

Learnt – Recognizing A Winning Business Strategy

A good business strategy must have an “intend” with asymmetric strategy, offensive strategy and defensive strategy.

Winning “offensive” strategy (“Hub and Wheel” Model of Strategy) – eg. DELL story

1. Clear Customer Target
2. Appropriate Product/Service Mix
3. Differentiated Customer Value Proposition (The “7 Ways” Model)
   · Premium Innovation
   · Value Innovation (Blue Ocean using ERRC Grid)
   · Disruptive Innovation
   · High end position, Head to Head position* and Low end position
4. Unique Business Design – through differentiation, unique technology and key choices. Alternative tools:
   · Mc Kinsey Business System
   · Porter’s Value Chain
   · Core Competency by Hamel and Prahalad
   * when there is “No differentiated Value Proposition & Unique Business Design”, clever Marketing Positioning is important! – Head to head position
5. Asymmetric Competitive Move – alternative tools:
   · SWOT Analysis
   · Game Theory
   · Competitive Move
6. Sustainable Profit
7. Industry Change
   · Industry or product life cycle
   · Scenario Planning – Early Warning Sign, Vertical Integration, Value Migration
   · Industry profitability – using Porter’s 5 forces & other forces analysis
   · Profit Pool Analysis - % Market share vs % Profit
   · Industry Value Chain – know the players and its’ profit

“Defensive” strategy – eg. Gillette story

1. Spotting Competitor
2. Scanning the Environment – alternative tools:
   · Value Chain Analysis
   · Profit Pool Analysis
   · Porter’s 5 forces and Complementors
   · Scenario Planning
   · Disruptive Innovation

Porter’s “generic strategies” can be divided into 3 parts:

1. Overall cost leadership – offer no-frills standardized product or service to mass market
2. Differentiation strategy – TQM, JIT
3. Focus strategy – particular product line, buyer or geographical market

Diversification

To increase growth, reduce risk and capture economy.
It can be carried through acquisition of related or unrelated business discipline.
It is better to grow from the Core business.

Unlearn

When faced with a strategic issue, I must relate back to understand the main issue or problem which I faced in order to use appropriately the offensive or defensive strategy.

Relearn

Applied defensive strategy by spotting on competitor using the 2007 IMS data to analyze Pfizer’s products market share versus competitors (start to work for Strategy Planning assignment).
Understand the natural growth inhibitors for a declining product and work out an action plan to remove the constraint on growth.
Analyzed and worked on the core competence of Pfizer’s products using the GfK field force ranking by sector business to improve on customer satisfaction.