Bs what is strategy


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Introducción al concepto de estrategia empresarial.

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Bs what is strategy

  1. 1. Business Strategy What is strategy? April 2013
  2. 2. “Don’t let strategy become planning”, Roger L. Martin
  3. 3. What is business strategy?How to compete in a distinct businessor industryCompany profitability results from two distinct causes:Source: professor Michael E. Porter
  4. 4. “What is strategy?”Michael E. Porter
  5. 5. “What it takes for a company to have agood strategy?”Roger L. Martin
  6. 6. What isstrategy?
  7. 7. The creation of aunique andvaluable position
  8. 8. A clear strategic positionning: IKEA targets young furniture buyers who want style at low costSource: “What is strategy?”, professor Michael E. Porter
  9. 9. Making choices incompeting
  10. 10. A clear target segment Standardization and self-service vs. Customization and service In-house design rather than rely solely on third- party manufacturers …Source: “What is strategy?”, professor Michael E. Porter
  11. 11. A different set ofactivities that fittogether
  12. 12. Source: “What is strategy?”, professor Michael E. Porter
  13. 13. Strategy is FOCUS
  14. 14. Strategy is about makingspecific choices to win inthe marketplaceSource: “Playing to win: How strategy really works”A.G. Lafley, Roger L. Martin (2013)
  15. 15. Where and How to compete“The two choices to make in strategy”Roger L. Martin “Playing to win: How strategy really works”A.G. Lafley, Roger L. Martin (2013)
  16. 16. Strategic options
  17. 17. Domains of choice Which product categories? Which market segments? Which geographic areas? Which channels? Which core technologies? Which value-creation stages?Image?Customization?Price?Styling?Product reliability?Service?
  18. 18. Young, low and middle income buyers Contemporary furniture Worldwide Wholly owned stores Product design and distributionLow priceReliable qualityWell-designed, functional furnitureFun, non-threatening, easy shopping experienceInstant fulfillmentExtra services: in-store child care, extended hours, etc.
  19. 19. Origins of competitive positionsSource: professor Michael E. Porter
  20. 20. IKEA seeks to meet all the home furnishing needsof its target customers, not just a subset of them
  21. 21. Types of competitive advantageSource: professor Michael E. Porter
  22. 22. Generic strategies Type of competitive advantage Cost Differentiation WideScope NarrowSource: professor Michael E. Porter
  23. 23. Some key evaluation criteriaAre the elements of your strategy internallyconsistent?Does your strategy exploit your key resources andcapabilities?Do you have enough resources to pursue thisstrategy?Is your strategy implementable?Will your envisioned differentiation be sustainable?Source: “What is strategy?” Marc Sniukas
  24. 24. A new strategy is, in the language ofscience, a hypothesis, and itsimplementation an experimentSource: “Good strategy / Bad strategy: The difference and why itmatters”, Richard P. Rumelt (2011)
  25. 25. Competitive advantageThe specific way a firm utilizes its advantages to create superior value for a consumer or a customer(in a way that is distinct from the firm’s competitors) and in turn, superior returns to the firm • Core competences • Critical resources Signal advantage Experimentation advantage Organization advantage Systems advantage Ecosocial advantage
  26. 26. The strategy formation process Industry analysis, customer trends, competitor analysis, environment forecast, internal assessment What capabilities must we have? What is our winning aspiration? What management systems? Fundamental Specific Structure, process, purpose, targets A central, integrated, rewards, people, values externally oriented concept activities, symbols of how the business will functional policies achieve its objectives and profilesSource: “Are you sure you have a strategy?” Donald C. Hambrick,James W. Fredrickson (2001)
  27. 27. Our vision and business idea At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford themSource: IKEA
  28. 28. Strategy vs. Strategic Plan Definition of the Guiding policy for Set of coherent challenge dealing with the actions designed challenge to carry out the guiding policy
  29. 29. Industry analysisPorter’s FiveForces Threat of new entrants Value creation and appropiation Bargaining power of Competition within the Bargaining power of suppliers industry customers / buyers Structural Threat of substitute products attractivenessSource: professor Michael E. Porter
  30. 30. General environment PESTLE analysis Policital Economic Sociological Source: “Good strategy / Bad strategy: The Technological difference and why it matters”, Richard P. Rumelt (2011) Legal Environmental
  31. 31. Competitor analysis• To learn• To benchmark• To identify strategic groups• To early detect new players• To position• To predict action/reaction What do they do? Where? Why? How?...
  32. 32. Typical furniture store Showrooms diplays samples of the merchandise (only a fraction of the choices available) Sales staff to “help” customers Furniture delivered within 6-8 weeks …
  33. 33. Customer analysisTo truly know shoppers and end usersTo know consumers better than any competitor doesTo uncover unarticulate needsTo see opportunities before they are obvious to others Etnographic study of consumers
  34. 34. Young, low and middle income buyers First-time furniture buyers Not wealthy Happy to trade off service for cost Likely to have children (but no nanny)Working long hours
  35. 35. SWOT analysis Internal analysis Weaknesses Strengths Threats Opportunities External analysisSource: professor Michael E. Porter
  36. 36. What is strategy?Strategy defines the company’s distinctiveapproach to competing - Creating a unique value proposition - Doing things differently to deliver superior value - ChoicesSource: professor Michael E. Porter
  37. 37. • Stylish and quality furniture at low • In-house design cost • Modular, ready-to-assemble, easy• Broad range of furniture and to ship furniture designs household items • Self-selection by the customer• Easy shopping experience • All products displayed in stores • Large on-site inventories • Extensive customer information • Suburban locations • Long hours of operation • On-site, low-cost, restaurant • Child care • Self-delivery by most customers Source: professor Michael E. Porter
  38. 38. Value Proposition Canvas &Business Model Canvas - Creating a unique value propositionBlue OceanStrategy
  39. 39. Good strategyIn a good strategy, the valueproposition is clear and simple(Michael E. Porter)An effective blue ocean strategy hasthree complementary qualities: focus,divergence, and a compelling tagline(“Blue Ocean Strategy”)
  40. 40. Bad strategyA hallmark of true expertise and insight ismaking a complex subject understandable. Ahallmark of mediocrity and bad strategy isunnecessary complexity – a flurry of fluffmasking the absence of substanceBad strategy is vacuous and superficial, hasinternal contradictions, and doesn’t define oraddress the problem. Bad strategy generates afeeling of dull annoyance when you have tolisten to it or read itSource: “Good strategy / Bad strategy: The difference and why itmatters”, Richard P. Rumelt (2011)
  41. 41. There simply is no one perfect strategythat will last for all time. There aremultiple ways to win in any almostany industry. That’s why building upstrategic thinking capability withinorganizations is so vitalSource: “Playing to win: How strategy really works”A.G. Lafley, Roger L. Martin (2013)
  42. 42. Think STRATEGICALLY
  43. 43. “Strategy is all aboutpractice”, Roger L. Martin
  44. 44. Jorge Lópezjlopez@barrabes.comTwitter: