Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Session 02 - Strategy & Delta Model (Edited)

6,379 views

Published on

Published in: Education
  • Be the first to comment

Session 02 - Strategy & Delta Model (Edited)

  1. 1. http://paradygnamics.wordpress.com CENTRO DE INNOVACIÓN 1 TECNOLÓGICO DE MONTERREY
  2. 2. www.gda.itesm.mx/innovar CERTIFICADO EN INNOVACIÓN G2 - ENERO-MAYO 2009 INNOVACIÓN DE MODELOS DE NEGOCIO SESSION 02 The Delta Model – Setting the strategic Direction for achieving competitive advantage FACULTY TEAM Ing. Jorge Valdez Simancas Ing. Angel Tonatiuh Flores (atflores@itesm.mx) pandza@itesm.mx Daniel Pandza, M.A. Tel 01-(33) 3669 3000 ext. 2266 Centro de Innovación
  3. 3. Basic Assumptions: Strategy is About: 1. Searching for New Sources of Competitive Advantage, 2. Being Unique, 3. Creating Wealth: Reduce Risk, Investment and Time, 4. Inventing New Rules and New Games Strategy is About Discovery of Wealth Source: C.K. Prahalad
  4. 4. Competitive Advantage over Time Competitive Advantage Gap – Distance from closest competitors –New, better features GAP –Lower prices –Superior customer service Moore (2002) Living on the Fault Line. Harper Business Press Returns CAP Time Competitive Advantage Period – Barriers to entry –Market share dominance –Blocking patent –Switching costs –Brand loyalty
  5. 5. GAP/CAP matrix Where are Your Offers on this Grid? high Differentiation GAP low low CAP high Sustainability
  6. 6. Competitive Advantage, Resource Based View, Delta Model Source: www.valuebasedmanagement.com
  7. 7. DELTA MODEL The model on the right represents the Hax´s point of view regarding the development and implementation of the corporate strategy. 1. Strategic positioning 2. Define Mission 3. Competitive positioning & assessment of the industry structure 4. Select strategic agenda (i.e. value discipline) 5. Repeat iterations as the competitive environment changes
  8. 8. A Dynamic View of Strategy Markides (1999) reinforces the importance of viewing the stra- tegic manage- ment agenda as a dynamic pro- cess that is di- rected for con- tinously explo- ring New Emer- ging competitive Positions! Markides (1999). A Dynamic View of Strategy. IEEE Engineering Management Review. Winter 1999. URL: http://ieeexplore.ieee.org/iel5/46/17508/00808247.pdf?arnumber=808247
  9. 9. The Delta Model | Three Distinct Strategic Options Option 1: Best Product Best Product Product Economics Value chain of the product Intrinsic value (Standard) Faceless customers Mass distribution channels - First to market - Dominant Design Rivalry
  10. 10. The Delta Model | Three Distinct Strategic Options Option 1: Best Product Costos bajos: • Southwest • Nucor MEJOR PRODUCTO Competencia basada en economía del producto Diferenciación: • Sony Wega • Rolls Royce
  11. 11. The Supplier-Customer Relationship: Traditional and New Economy Structures
  12. 12. ESTRATEGIAS NATURALES Y DE MIGRACION Altamente Interactividad y eficiencia de costo III IV diferenciado Mercadotecnia Mercadotecnia de frecuencia 1a1 (Cuentas Claves) Valuación de los clientes I II Mercadotecnia Mercados meta masiva nichos Expander el set de necesidades Uniforme Altamente Uniforme diferenciado Necesidades del cliente
  13. 13. MAPA ESTRATEGICO Necesidades de los consumidores Altamente III IV Usuario Final Diferenciado Consumidores Flexibilidad Valoracion de los en las consumidores comunicaciones I II H-P Competencias Uniforme Flexibilidad de Produccion, Logistica y servicios
  14. 14. Implicit Assumptions 1. Value is Created by the Firm 2. Value is Exchanged between the Firm and a Customer 3. Value is embedded in Products and Services 4. Innovation is about technologies/products/processes 5. Customers have a choice- to buy or not to buy; Managers’ job is to persuade them to buy
  15. 15. Customer Heterogeneity 1. All Customers are not alike in their: • Levels of Sophistication • How they want to dialogue • Tolerance for problems • View of switching costs • Propensity for Personalization • Role as Individuals in a Social Network 2. Personal Experiences (Value) around identical physical products can vary significantly. • Consumers specify the price (auctions)
  16. 16. Typical Response: Good News & Bad News Product Variety means: Richness of Features But not necessarily and Functions Experience Variety Technologies used for We have to Think of creating Product Variety Technologies as can be used to Create Experience Enablers Experience Variety.
  17. 17. Eventos de compra independientes Necesidades satisfechas Clientes contactados
  18. 18. The Delta Model | Three Distinct Strategic Options Option 2: Total Customer Solutions Total Customer Solutions - Customer Economics - Strong customer bonding (relationship) - Solving a wide range of customer needs - Alternative, non traditional and direct channels. - Share of wallet. - Cutting finer - Improve Customer Cost position, incomes and profits.
  19. 19. Eventos de compra condicionales Necesidades satisfechas Clientes contactados
  20. 20. Soluciones completas para los clientes Hay tres maneras de lograr la solución total al cliente:  Redefinir la experiencia con el cliente. Alterar la relación con los clientes desde el punto de adquisición hasta el final de la vida del producto o servicio.  Saturn  Disney  Amplitud horizontal. Proveer un conjunto completo de productos y servicios acerca de las necesidades del cliente.  Amazon  Wal Mart.  Home Depot  Integración en el cliente. Esto es una forma de outsourcing facilitando actividades que antes las hacia el cliente.  Dell  Transferir trabajo del cliente a la empresa o de la empresa al cliente. Aquí se transfiere trabajo al cliente a cambio de una reducción de costos.  Autoservicio en las gasolineras
  21. 21. Knowledge Capital Dynamics Working with the customer to jointly craft business opportunities that Partnering would not have been possible without a deep mutual understanding / trust Shaping/ configuring an array of Business benefits and features services to Solutions provide the value creating functionality required by a customer Selecting/ proposing an “augmented” Product Solutions product/ service in response to an expressed customer need One time sale of a product/ service Transactions
  22. 22. The Delta Model | Three Distinct Strategic Options Option 3: Dominant System
  23. 23. Sistema dominante • La opción estratégica de “Sistema dominante” tiene el mayor Valor agregado posible. • En vez de enfocarse estrechamente en el producto o en el cliente, la compañía considera a todos los jugadores principales en el sistema que contribuyen a la creación de valor económico. • Hay tres condiciones necesarias para crear un sistema dominante: – Efecto network. – Feedback positivo – Efecto de aprendizaje • La compañía está particularmente preocupada en el desarrollo, atracción y conservación de los llamados “complementos”. • Un complemento no es un competidor sino un proveedor de productos y servicios que mejora directa o indirectamente nuestra oferta.
  24. 24. Sistema dominante Hay tres formas de lograr un sistema dominante: 1. Estándar propietario. Tiene un network extenso de complementadores dedicados a trabajar para nuestros productos. 2. Intermediación dominante. Una empresa posicionada como intercambio dominante provee una interface entre compradores y vendedores, o entre las partes que desean intercambiar informaciónón o bienes. Cuando este tipo de negocios logran una masa critica es muy difícil desplazarlos. 3. Acceso restringido. Los competidores son bloqueados de llegar a los clientes porque el canal tiene capacidad limitada para manejar múltiples proveedores.
  25. 25. The Delta Model | Three Distinct Strategic Options SUMMARY Competencia basada en SISTEMA economía del sistema: • “Complementor look in” . DOMINANTE • “Competitor look out”, • Estándar de Tecnología propietario. SOLUCIONES TOTALES PARA LOS CLIENTES Competencia basada en MEJOR economía del cliente: PRODUCTO Reducción de costos de servir Competencia basada en a clientes o incremento de economía del producto.: ventas / utilidades. Costos bajos o diferenciación.
  26. 26. The Delta Model Options for Strategic Positioning Dominant Exchange System Lock-In Exclusive Channels Proprietary Standard Horizontal Breadth Low Cost Total Customer Best Product Solutions Customer Redefining the Diferentiation Integration Customer Relationship
  27. 27. Expanding Your Mindset: Summary for Strategic Decision Making 1|2 STRATEGIC FOCUS RELEVANT BENCHMARKING Complementors Network Extended Customers Competitors Product Enterprise INNOVATION VALUE PROPOSITION Open Architecture - Product & Service Portfolio Complementors as Key Extended by Complementors Internal Joint with Standardized Customized Product Customers Products product bundle Development
  28. 28. Expanding Your Mindset: Summary for Strategic Decision Making 2|2 SUPPLY CHAIN CHANNELS System - Extended & Massive | Direct Complementors Generic Targeted Extended Suppliers, Internal Mass the Firm, The Customers Direct THE ROLE OF IT DEGREE OF CUSTOMER BONDING Total Network Support Highest! Competitor Lock-Out Very Small Potentially Customer & Internal Depending on Supplier Support high customer Product Support lock-in Characteristics
  29. 29. Valor agregado Incremento de valor agregado Diseño Asegurar al Bloquear a la Estándar Dominante cliente competencia propietario Complementos Retroalimentación Distribuidores/ Proveedores positiva Producto Producto Look in Po u t r d co Po u t r d co Clientes C ne lie t s C ne lie t s Clientes  Ventaja de ser el primero:   Distribución del espacio en  Desarrollo de redes de complementos de 3as Aprendizaje del cliente. partes para incrementar el atractivo del el anaquel.  Atributos.  Producto Customizado producto.  Marcas.  Servicio.  Activos Colaterales.  Posición de apalancamiento como líder en  Innovaciones implacables.  Precio.  participación de mercado en la atracción de Marcas complementos.  Patentes.  Estructura de precios.  Los clientes buscan los productos que tenga el mayor numero de complementos.  Algunas veces los clientes pueden ser el complemento, como en el caso de intercambios.
  30. 30. Complementos Producto Clientes Competencia basada en economía del sistema: Aseguramiento de complementos, bloqueo de la competencia, estándar propietario. SISTEMA DOMINANTE Intercambio Dominante Estándar Propietario Acceso Restringido Integración en los clientes Costos bajos Amplitud Horizontal Diferenciación Redefinición de la SOLUCIONES TOTALES PARA experiencia del EL CLIENTE MEJOR PRODUCTO cliente Competencia basada en economía Competencia basada en economía del producto: del cliente: Po u t r d co Po u t r d co Costos bajos o Reducir costos de clientes o diferenciación incrementar su rentabilidad C ne lie t s C ne lie t s
  31. 31. THE CHALLENGES TO TRANSFORM THE ORGANIZATION FROM BEST PRODUCT TO TOTAL CUSTOMER SOLUTIONS
  32. 32. 1. Fight the product-centric mindset  The Best Product Positioning is not necessarily the most profitable or best way to serve your customer.
  33. 33. 2. The transformation is not straightforward  The alternative to a Best Product positioning are not always easy to define or to accept . (The case of Codelco and the International Copper Assoc.)
  34. 34. 3. You have to redefine the game you are playing.  It is not that your products are unimportant; it is not that you should ignore the efficiency of product delivery - it is simply that often this is not enough. (The case of CSN.) Transforming the focus of the CSN Organization From Support Units To Strategic Marketing Units • Steel (e.g. processor, • Automotive • Civil construction rerollers, etc.) • Export • House appliances • Mining • Packaging • Energy • Ports
  35. 35. 4. The Challenge: “Commodities only exist in the minds of the inept.”  Product differentiation, as technology gets more mature, is very hard to achieve. If your product becomes a commodity, you are deprived from superior financial performance, from serving your customer splendidly, and from having fun. (You violate the three tenets.)  Do not sell products; sell customer solutions: customization, learning, and services bundled with products as a unique customer offering. (The Case of National Starch).  Use all the corporate capabilities supported by key complementors. This is a corporate strategy. (The case of Siemens USA.)
  36. 36. Competitive Driving Forces Product Differentiation Product Premium Technology Products Specialty Products Specification Products Source: Castrol
  37. 37. Competitive Driving Forces Product Differentiation “The technology is mature … less opportunity to differentiate” Future Before Source: Castrol
  38. 38. Competitive Driving Forces Service Differentiation Significantly Services Differentiated Occasionally Differentiated Responsive Minimum Required to Maintain Businesses Source: Castrol
  39. 39. Competitive Driving Forces Service Differentiation “Customers are demanding more than just products” Before Future Source: Castrol
  40. 40. 5. De-commoditize your customer. 1. Start with segmentation:  segment your markets,  your customers,  your customers’ customers, and  customers’ attitudes (productivity, cost, and price consciousness). (The case of Castrol.) 2. Do not treat every customer equally.  You could not and should not provide everyone the same degree of attention. 3. Select your customers. 4. Do not let your customers select you.
  41. 41. Market Segmentation: BEFORE Cement Glass Sugar Mining Pulp & Paper Wood Textile Food & Beverage Source: Castrol
  42. 42. Market Segmentation: AFTER These customers are conscious of total costs and new production yields higher sales Productivity Conscious Customers Source: Castrol
  43. 43. Market Segmentation: AFTER Cost Conscious Customers These customers are conscious of total costs but new production does not necessarily yield higher sales or economies of scale Source: Castrol
  44. 44. Market Segmentation: AFTER These customers are not necessarily conscious of total Price costs and generally conscious customers buy on price/unit Source: Castrol
  45. 45. 6. Rethink the customer engagement process.  You are not selling products by the ton, or by the gallon, or by the drum.  You are selling documented improvements in your customer costs and productivity.  Use an executive team as part of the customer management process. “Sales are too important to be left to the sales force.”  (The case of Castrol.)
  46. 46. What is Castrol Logic? A customized lubrication solution involving products and services that results in documented: Cost Reductions & Productivity Improvements
  47. 47. Customer Experience How do we deliver cost savings? Client Engagement Process Initial Information Exchange Continuous Improvement Documentation Management Survey Implementation Proposal Source: Castrol
  48. 48. 7. Prevent the customer from commoditizing you.  Your customers might feel they benefit from standardizing the product offering of their suppliers, and move the bargaining power in their favor. The problem is “You get what you pay for.”  (The case of Eastman Chemicals Coating Business.)
  49. 49. Case: The Paint and Coating Industry Paint and Coating Manufacturers Tier 1- Preferred strategic solution seekers Tier 2- Large price seekers Tier 3- Least attractive Eastman Chemicals End Users price seekers Tier 4- Local • Solvents • Architectural manufacturers • Resins • Automotive Tier 5- Specific targeted • Additives • Industrial maintenance companies • Colorants • Building products • Appliances Distributors • Metal office furniture Tier 1- Full alignment with EC Tier2- Large power bargainers Tier 3- Fragmented local agents Tier 4- Specialty distributors
  50. 50. 8. Channels are essential, they “own” the customers.  Ownership or control of the channels is critical to the pursuit of a Total Customer Solutions strategy.  Generic channels are only effective for the “average customer. They are unsatisfactory for the very poor and the very rich. (The case of Hindustan Lever and Unilever de México.)  If you cannot own the channels, use a “pull” strategy. (The case of Unilever Bestfoods Food Service.)
  51. 51. The Food Service Industry push Unilever Bestfoods Food Service Distributors Operators Final Consumer pull • Corporate broad line Tier 1- 100 chains (e.g. Sysco) Tier 2/3- 1500 chains • Specialized Tier 4/5- Thousands of distributors independents • Other national,regional and local distributors
  52. 52. 9. Use technology wisely: This is a very hard task.  Joint development with our customers is an effective mechanism to get customer lock-in.  Product technology is not enough, add service technical support.  Effective IT infrastructure is imperative: e-Business allows the implementation of the integrated value chain, e-Commerce allows access to massive fragmented customers.  Technology-based system lock-in is very hard to achieve, if you can do it is a dream. (The case of Advanced Micro Devices.)
  53. 53. 10. Beware of the organizational structure implications  You have to change dramatically the way you manage, assign responsibilities, reward people, monitor the business progress, and most important, the way you “sell”. (The case of Motorola Semi-Conductors.)
  54. 54. THE DELTA PROJECT: DISCOVERING NEW SOURCES OF PROFITABILITY IN A NETWORKED ECONOMY Arnoldo C. Hax and Dean Wilde Palgrave, 2001 http://www.palgrave.com http://www.amazon.co.uk

×