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Strategy:
Smarter Conquers Better
By
Dr. Michael McDermott
mcdermottm1@nku.edu
But business success is
simply about being
better. Isn’t it?
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

2
The “Being Better” Argument
• In order to succeed, it’s true you do need to
possess at least one advantage:
• Better
• Cheaper
• Faster
• Richer
• Stronger
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

3
The “Being Better” Argument
• But simply ‘being better’ provides only shortlived success
• The ‘better’ is based only on operations

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

4
Three Questions
1. What biblical story do you most associate with an
underdog defying expectations to beat a more impressive
opponent?
2. Who is the greatest boxer of all time, and indeed
considered the greatest sportsman of the 20th century?
3. Who are considered the greatest ever football (i.e. soccer)
team?
4. Greatest band of all time?

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

5
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

6
What explains their success?

Their success was based
upon Genuine Strategy

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

7
Example 1: David vs Goliath
David
• Youthful
• Inexperienced in hand-tohand conflict
• Physically weak
• No protection

1/16/2014

Goliath
• Mature
• Experienced in hand-tohand conflict
• Physically strong
• Heavily protected

© Michael McDermott, 2014;
mcdermottm1@nku.edu

8
Example 1: David vs Goliath
• If David is to win, he
only had one
option…and his insight
enabled him to identify
that fact
• Goliath – classic case of
‘brawn and no brain’

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

9
Lessons from David vs Goliath

Smarter can
beat better
• Good strategy comes
from fresh insight into
strengths and
weaknesses, and
opportunities and
threats
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

10
Facing ‘Goliath’
• So developing a strategy to topple the
‘invincible’ is not easy
• Do you try and copy the best – but the core
competence of the best is always hard to
imitate
• Or do you have to invent a superior solution?
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

11
Example 2: Ali vs Foreman

World Heavyweight Championship Fight, Zaire, October 1974

1/16/2014

The Challenger
32 years of age

© Michael McDermott, 2014;
mcdermottm1@nku.edu

The Defending World Champion
25 years of age
12
Ali vs Foreman:

Comparison Based Upon the ‘Better’ argument
Ali

Foreman

• Former World Champion
• Past success was based on
being ‘better’
• Past his peak in terms of
being ‘better’
• 32 years of age
• Making a comeback after
years without competitive
fights

• Defending World Champion
• Present success was based
on being better
• At his peak
• 25 years of age
• Getting better with each
fight

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

13
Who is Going to Win?

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

14
What’s Missing?

We have not identified a crucial
difference!
Only one boxer had a genuine
strategy
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

15
Ali vs Foreman:

Comparison of Strategy

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

16
Ali vs Foreman
•
•
•
•
•

Two boxers
One, the defending world champion
The other, the former, older champion
One Common goal
Two Different Strategies
– Ali – Good Strategy
– Foreman – Bad Strategy

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

17
Ali vs Foreman
Ali Practiced Good Strategy
• diagnosed his critical problem
• He could no longer “float like a
butterfly, sting like a bee” over
15 rounds against a younger
opponent

George relied on Bad Strategy
• The 3D Effect

• So he developed an action
plan to overcome his critical
weakness
• “Rope-a-dope”
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

18
Rope a Dope
Ali Wins by a
Knockout in
Round 8.
Foreman had
run out of
steam.
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

19
Ali Interview
• http://youtu.be/AY3yIIxXvy4

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

20
Two Vital Lessons from
Ali vs Foreman
1.

Even the very best
are eventually
overtaken;
2.

If they are to
continue winning,
they need genuine
strategy

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

21
Lessons from “Rope-a-dope”
• Exhaust your rival’s
resources through
suckering them into
constant expenditure of
ineffective yet
debilitating effort

1/16/2014

• When you look at the
market for some
products, do we see
that the market leader
is employing the “ropea-dope”?

© Michael McDermott, 2014;
mcdermottm1@nku.edu

22
Example 3:

Barcelona’s Dominance of World Soccer

• The present Barcelona side, Spanish and
European champions, are considered the greatest
team of all time;
• It features Lionel Messi (born 24 June 1987), the
World Footballer of the Year (2009, 2010)
• Spain, current European and World Champions, is
heavily dependent upon Barca players
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

23
Example 3:

Barcelona and Spain’s Dominance of World Soccer

This example shows that this success is
based upon a genuine strategy that
was developed 40 years ago

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

24
Example 3:
Barcelona and The Dutch Legacy
• In the early 1970s, Barcelona was managed by
Dutch coach, Rinus Michels
• He bought the player Johan Cruyff – ‘the Messi’
of his generation
• Cruyff managed Barcelona in the late 1980s-mid
1990s
• One of his key players was Josep Guardiola,
manager of Barcelona since 2008
• Today the present Barca team are hailed as the
greatest ever side
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

25
Example 3:
Barcelona and The Dutch Legacy
• In 1970 Brazil beat Italy 4-1 in the soccer
World Cup final in Mexico
• The Brazilian team was considered invincible
• The next World Cup was in Germany in 1974
• But how could anyone beat Brazil?

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

26
Example 3:
The Dutch Influence on Soccer
• Rinus Michels, the coach of the Dutch national
team, concluded that no one could match
Brazil
• So a radical new approach was required
• He invented ‘total football’
• At the heart of this new system was the player
Johan Cruyff

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

27
Total Football Defined
• In Total Football, a player who moves out of
his position is replaced by another from his
team, thus retaining the team's intended
organisational structure. In this fluid system,
no outfield player is fixed in a nominal role;
anyone can be successively an attacker, a
midfielder and a defender. The only player
fixed in a nominal position is the goalkeeper.
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

28
The Immediate Outcome
• In 1974 Holland beat Brazil but were beaten in
the final 2-1 by the host country Germany
• In 1978 Holland was again beaten in the final
by the host nation Argentina

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

29
Barcelona F.C:
The Lasting Legacy
• Michels introduced ‘total football’ to
Barcelona
• The commitment to ‘total football’ continued
under Cruyff
• Cruyff recognized the exceptional ability
required to implement ‘total football’
• He thus established in 1978 “La Masia”, the
youth academy to train young players in the
system from an early age
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

30
Barcelona F.C:
The Lasting Legacy
• One of the first graduate from ‘‘La Masia” was
Guardiola, exceptional player and manager;
• Today’s current midfield of Xavi, Iniesta and
Fabregas are all graduates of “La Masia”;
• Messi is also a product of the youth academy
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

31
Barcelona F.C: The Lasting Legacy
Barcelona F.C.
• When Barca won the
European Champions
League in 2009, 8 of the 11
players were graduates
from the youth system

1/16/2014

Spanish National Side
• When Spain won the 2010
World Cup the 22 man
squad included 8 Barca
players and 6 were in the
starting 11 for the final

© Michael McDermott, 2014;
mcdermottm1@nku.edu

32
The Lasting Legacy:
From Total Football to Tiki-taka
Tiki-taka has been variously described as
• "a style of play based on making your way to the back of the net
through short passing and movement"
• a "short passing style in which the ball is worked carefully through
various channels, and
• a "short passing, patience and possession".
•

The style involves roaming movement and positional interchange
amongst midfielders, moving the ball in intricate patterns, and
sharp, one or two-touch passing.

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

33
The Lasting Legacy:
From Total Football to Tiki-taka
• One of the weaknesses of Spanish sides and the
national team was that their players were often
much smaller and less physical than players from
other nations (e.g. Northern Europe, Africa);
• Tiki-taka focuses on movement, possession and
skill
• Some of the best players for Barcelona and Spain
are physically small
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

34
Barcelona and Competitive
Advantage
Differentiation
• Barcelona competes
through innovation – it has
developed a unique style or
brand of football

Low Costs
• The youth academy enables
Barcelona to produce the
world’s best players at low
costs;
• This reduces the club’s need
to spend in excess of $50m
per player

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

35
Barcelona and Competitive
Advantage
Competition:
• competitors have so far failed
to overcome the Barcelona
system;
• This is despite the fact that
arch-rivals, Real Madrid have:
• acquired the world’s most
expensive player ($132m);
• the world’s highest paid soccer
manager (about $20m)
1/16/2014

Customers:
• Barcelona is the world’s
most popular club as its
style is uniquely
entertaining;
• It has 20m ‘likes’ on
facebook, narrowly beating
Real Madrid

© Michael McDermott, 2014;
mcdermottm1@nku.edu

36
Barca Has Clear Core Competencies
• “Core competencies
• It can be leveraged
are the most significant
widely
value creating skills
• It’s hard for rivals to
within your corporation
imitate
and key areas of
• It’s of great value to
expertise which are
customers
distinctive to your
company and critical to
the company's long
term growth”.
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

37
Multiple Lessons from Barca and its
Genuine Strategy
1. It arose from a foreign idea (i.e developed in Holland)
2. It involved honest internal analysis and identification
of weakness;
3. Indeed the essence of the new strategy is to render
weaknesses that cannot be overcome obsolete;
4. It has received constant commitment over 40 years –
even in ‘difficult’ times;
5. It is now delivering the best ever results as the
original business model (i.e. total football) evolved to
‘ticki-tacka’;
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

38
Multiple Lessons from Barca and its
Genuine Strategy
6. It is centered upon differentiation (i.e.
innovation);
7. The commitment to innovation compelled a
focus upon New Product Development (i.e.
the youth academy)

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

39
Multiple Lessons from Barca and its
Genuine Strategy
8. New superstar brands (i.e. players) are
developed at low cost and sourced locally
and internationally;
9. Costly acquisitions are seldom required
– and even when they are they are graduates of La
Masia who were allowed to join other clubs
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

40
Multiple Lessons from Barca and its
Genuine Strategy
10.Even when Barca is briefly overtaken by a
‘better’ team, it is without equal strategically,
so the strategy is a constant that ultimately
prevails
11.Barca may not always win, but its strategy
always delivers exceptional value to its
growing number of customers globally
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

41
Barca vs Real Madrid
Barca

Real Madrid

Genuine strategy
Commitment to core values
Consistency
Succession planning
Relies primarily upon
organic growth (i.e.
development of players and
managers)
• Continuity is key

• Genuine Strategy – or all
about goals;
• Lacking core values
• Inconsistency
• Absence of succession
planning
• Relies primarily upon external
growth (i.e. acquisitions of
players and managers)
• Change is key

•
•
•
•
•

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

42
Apple:
the corporate Equivalent to Barca
• Apple has a genuine strategy;
• At one time it struggled badly yet remained
totally consistent to its strategy;
• It seized opportunity (i.e. the iPod) and has
refined its original strategy with each
successive product and/or service

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

43
Apple:
the corporate Equivalent to Barca
• Apple can/should expect to be overtaken
briefly in some areas;
• But by applying its genuine strategy it can
expect to once again come out tops

1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

44
Conclusions
1. Strategy is not defining growth objectives
2. Strategy is about problem-solving
3. Strategy demands identification of the key
problem
4. Strategy develops a well-conceived action plan
to address the problem
1/16/2014

© Michael McDermott, 2014;
mcdermottm1@nku.edu

45

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A rumelt perspective strategy and smarter conquers better some non-business examples

  • 1. Strategy: Smarter Conquers Better By Dr. Michael McDermott mcdermottm1@nku.edu
  • 2. But business success is simply about being better. Isn’t it? 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 2
  • 3. The “Being Better” Argument • In order to succeed, it’s true you do need to possess at least one advantage: • Better • Cheaper • Faster • Richer • Stronger 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 3
  • 4. The “Being Better” Argument • But simply ‘being better’ provides only shortlived success • The ‘better’ is based only on operations 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 4
  • 5. Three Questions 1. What biblical story do you most associate with an underdog defying expectations to beat a more impressive opponent? 2. Who is the greatest boxer of all time, and indeed considered the greatest sportsman of the 20th century? 3. Who are considered the greatest ever football (i.e. soccer) team? 4. Greatest band of all time? 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 5
  • 6. 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 6
  • 7. What explains their success? Their success was based upon Genuine Strategy 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 7
  • 8. Example 1: David vs Goliath David • Youthful • Inexperienced in hand-tohand conflict • Physically weak • No protection 1/16/2014 Goliath • Mature • Experienced in hand-tohand conflict • Physically strong • Heavily protected © Michael McDermott, 2014; mcdermottm1@nku.edu 8
  • 9. Example 1: David vs Goliath • If David is to win, he only had one option…and his insight enabled him to identify that fact • Goliath – classic case of ‘brawn and no brain’ 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 9
  • 10. Lessons from David vs Goliath Smarter can beat better • Good strategy comes from fresh insight into strengths and weaknesses, and opportunities and threats 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 10
  • 11. Facing ‘Goliath’ • So developing a strategy to topple the ‘invincible’ is not easy • Do you try and copy the best – but the core competence of the best is always hard to imitate • Or do you have to invent a superior solution? 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 11
  • 12. Example 2: Ali vs Foreman World Heavyweight Championship Fight, Zaire, October 1974 1/16/2014 The Challenger 32 years of age © Michael McDermott, 2014; mcdermottm1@nku.edu The Defending World Champion 25 years of age 12
  • 13. Ali vs Foreman: Comparison Based Upon the ‘Better’ argument Ali Foreman • Former World Champion • Past success was based on being ‘better’ • Past his peak in terms of being ‘better’ • 32 years of age • Making a comeback after years without competitive fights • Defending World Champion • Present success was based on being better • At his peak • 25 years of age • Getting better with each fight 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 13
  • 14. Who is Going to Win? 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 14
  • 15. What’s Missing? We have not identified a crucial difference! Only one boxer had a genuine strategy 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 15
  • 16. Ali vs Foreman: Comparison of Strategy 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 16
  • 17. Ali vs Foreman • • • • • Two boxers One, the defending world champion The other, the former, older champion One Common goal Two Different Strategies – Ali – Good Strategy – Foreman – Bad Strategy 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 17
  • 18. Ali vs Foreman Ali Practiced Good Strategy • diagnosed his critical problem • He could no longer “float like a butterfly, sting like a bee” over 15 rounds against a younger opponent George relied on Bad Strategy • The 3D Effect • So he developed an action plan to overcome his critical weakness • “Rope-a-dope” 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 18
  • 19. Rope a Dope Ali Wins by a Knockout in Round 8. Foreman had run out of steam. 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 19
  • 20. Ali Interview • http://youtu.be/AY3yIIxXvy4 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 20
  • 21. Two Vital Lessons from Ali vs Foreman 1. Even the very best are eventually overtaken; 2. If they are to continue winning, they need genuine strategy 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 21
  • 22. Lessons from “Rope-a-dope” • Exhaust your rival’s resources through suckering them into constant expenditure of ineffective yet debilitating effort 1/16/2014 • When you look at the market for some products, do we see that the market leader is employing the “ropea-dope”? © Michael McDermott, 2014; mcdermottm1@nku.edu 22
  • 23. Example 3: Barcelona’s Dominance of World Soccer • The present Barcelona side, Spanish and European champions, are considered the greatest team of all time; • It features Lionel Messi (born 24 June 1987), the World Footballer of the Year (2009, 2010) • Spain, current European and World Champions, is heavily dependent upon Barca players 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 23
  • 24. Example 3: Barcelona and Spain’s Dominance of World Soccer This example shows that this success is based upon a genuine strategy that was developed 40 years ago 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 24
  • 25. Example 3: Barcelona and The Dutch Legacy • In the early 1970s, Barcelona was managed by Dutch coach, Rinus Michels • He bought the player Johan Cruyff – ‘the Messi’ of his generation • Cruyff managed Barcelona in the late 1980s-mid 1990s • One of his key players was Josep Guardiola, manager of Barcelona since 2008 • Today the present Barca team are hailed as the greatest ever side 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 25
  • 26. Example 3: Barcelona and The Dutch Legacy • In 1970 Brazil beat Italy 4-1 in the soccer World Cup final in Mexico • The Brazilian team was considered invincible • The next World Cup was in Germany in 1974 • But how could anyone beat Brazil? 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 26
  • 27. Example 3: The Dutch Influence on Soccer • Rinus Michels, the coach of the Dutch national team, concluded that no one could match Brazil • So a radical new approach was required • He invented ‘total football’ • At the heart of this new system was the player Johan Cruyff 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 27
  • 28. Total Football Defined • In Total Football, a player who moves out of his position is replaced by another from his team, thus retaining the team's intended organisational structure. In this fluid system, no outfield player is fixed in a nominal role; anyone can be successively an attacker, a midfielder and a defender. The only player fixed in a nominal position is the goalkeeper. 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 28
  • 29. The Immediate Outcome • In 1974 Holland beat Brazil but were beaten in the final 2-1 by the host country Germany • In 1978 Holland was again beaten in the final by the host nation Argentina 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 29
  • 30. Barcelona F.C: The Lasting Legacy • Michels introduced ‘total football’ to Barcelona • The commitment to ‘total football’ continued under Cruyff • Cruyff recognized the exceptional ability required to implement ‘total football’ • He thus established in 1978 “La Masia”, the youth academy to train young players in the system from an early age 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 30
  • 31. Barcelona F.C: The Lasting Legacy • One of the first graduate from ‘‘La Masia” was Guardiola, exceptional player and manager; • Today’s current midfield of Xavi, Iniesta and Fabregas are all graduates of “La Masia”; • Messi is also a product of the youth academy 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 31
  • 32. Barcelona F.C: The Lasting Legacy Barcelona F.C. • When Barca won the European Champions League in 2009, 8 of the 11 players were graduates from the youth system 1/16/2014 Spanish National Side • When Spain won the 2010 World Cup the 22 man squad included 8 Barca players and 6 were in the starting 11 for the final © Michael McDermott, 2014; mcdermottm1@nku.edu 32
  • 33. The Lasting Legacy: From Total Football to Tiki-taka Tiki-taka has been variously described as • "a style of play based on making your way to the back of the net through short passing and movement" • a "short passing style in which the ball is worked carefully through various channels, and • a "short passing, patience and possession". • The style involves roaming movement and positional interchange amongst midfielders, moving the ball in intricate patterns, and sharp, one or two-touch passing. 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 33
  • 34. The Lasting Legacy: From Total Football to Tiki-taka • One of the weaknesses of Spanish sides and the national team was that their players were often much smaller and less physical than players from other nations (e.g. Northern Europe, Africa); • Tiki-taka focuses on movement, possession and skill • Some of the best players for Barcelona and Spain are physically small 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 34
  • 35. Barcelona and Competitive Advantage Differentiation • Barcelona competes through innovation – it has developed a unique style or brand of football Low Costs • The youth academy enables Barcelona to produce the world’s best players at low costs; • This reduces the club’s need to spend in excess of $50m per player 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 35
  • 36. Barcelona and Competitive Advantage Competition: • competitors have so far failed to overcome the Barcelona system; • This is despite the fact that arch-rivals, Real Madrid have: • acquired the world’s most expensive player ($132m); • the world’s highest paid soccer manager (about $20m) 1/16/2014 Customers: • Barcelona is the world’s most popular club as its style is uniquely entertaining; • It has 20m ‘likes’ on facebook, narrowly beating Real Madrid © Michael McDermott, 2014; mcdermottm1@nku.edu 36
  • 37. Barca Has Clear Core Competencies • “Core competencies • It can be leveraged are the most significant widely value creating skills • It’s hard for rivals to within your corporation imitate and key areas of • It’s of great value to expertise which are customers distinctive to your company and critical to the company's long term growth”. 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 37
  • 38. Multiple Lessons from Barca and its Genuine Strategy 1. It arose from a foreign idea (i.e developed in Holland) 2. It involved honest internal analysis and identification of weakness; 3. Indeed the essence of the new strategy is to render weaknesses that cannot be overcome obsolete; 4. It has received constant commitment over 40 years – even in ‘difficult’ times; 5. It is now delivering the best ever results as the original business model (i.e. total football) evolved to ‘ticki-tacka’; 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 38
  • 39. Multiple Lessons from Barca and its Genuine Strategy 6. It is centered upon differentiation (i.e. innovation); 7. The commitment to innovation compelled a focus upon New Product Development (i.e. the youth academy) 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 39
  • 40. Multiple Lessons from Barca and its Genuine Strategy 8. New superstar brands (i.e. players) are developed at low cost and sourced locally and internationally; 9. Costly acquisitions are seldom required – and even when they are they are graduates of La Masia who were allowed to join other clubs 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 40
  • 41. Multiple Lessons from Barca and its Genuine Strategy 10.Even when Barca is briefly overtaken by a ‘better’ team, it is without equal strategically, so the strategy is a constant that ultimately prevails 11.Barca may not always win, but its strategy always delivers exceptional value to its growing number of customers globally 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 41
  • 42. Barca vs Real Madrid Barca Real Madrid Genuine strategy Commitment to core values Consistency Succession planning Relies primarily upon organic growth (i.e. development of players and managers) • Continuity is key • Genuine Strategy – or all about goals; • Lacking core values • Inconsistency • Absence of succession planning • Relies primarily upon external growth (i.e. acquisitions of players and managers) • Change is key • • • • • 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 42
  • 43. Apple: the corporate Equivalent to Barca • Apple has a genuine strategy; • At one time it struggled badly yet remained totally consistent to its strategy; • It seized opportunity (i.e. the iPod) and has refined its original strategy with each successive product and/or service 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 43
  • 44. Apple: the corporate Equivalent to Barca • Apple can/should expect to be overtaken briefly in some areas; • But by applying its genuine strategy it can expect to once again come out tops 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 44
  • 45. Conclusions 1. Strategy is not defining growth objectives 2. Strategy is about problem-solving 3. Strategy demands identification of the key problem 4. Strategy develops a well-conceived action plan to address the problem 1/16/2014 © Michael McDermott, 2014; mcdermottm1@nku.edu 45