2. “Don’t let strategy become planning”, Roger L. Martin
http://blogs.hbr.org/cs/2013/02/dont_let_strategy_become_plann.html
3. What is business strategy?
How to compete in a distinct business
or industry
Company profitability results from two distinct causes:
Source: professor Michael E. Porter
8. A clear strategic positionning:
IKEA targets young furniture buyers
who want style at low cost
Source: “What is strategy?”, professor Michael E. Porter
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
14. Strategy is about making
specific choices to win in
the marketplace
Source: “Playing to win: How strategy really works”
A.G. Lafley, Roger L. Martin (2013)
15. Where and How to compete
“The two choices to make in strategy”
Roger L. Martin
http://www.youtube.com/watch?v=TCL
W2y2VPQE&feature=player_detailpage
Source: “Playing to win: How strategy really works”
A.G. Lafley, Roger L. Martin (2013)
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. Young, low and middle income buyers
Contemporary furniture
Worldwide
Wholly owned stores
Product design and distribution
Low price
Reliable quality
Well-designed, functional furniture
Fun, non-threatening, easy shopping experience
Instant fulfillment
Extra services: in-store child care, extended hours, etc.
22. Generic strategies
Type of competitive advantage
Cost Differentiation
Wide
Scope
Narrow
Source: professor Michael E. Porter
23. Some key evaluation criteria
Are the elements of your strategy internally
consistent?
Does your strategy exploit your key resources and
capabilities?
Do you have enough resources to pursue this
strategy?
Is your strategy implementable?
Will your envisioned differentiation be sustainable?
Source: “What is strategy?” Marc Sniukas
24. A new strategy is, in the language of
science, a hypothesis, and its
implementation an experiment
Source: “Good strategy / Bad strategy: The difference and why it
matters”, Richard P. Rumelt (2011)
25. Competitive advantage
The 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. 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 profiles
Source: “Are you sure you have a strategy?” Donald C. Hambrick,
James W. Fredrickson (2001)
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 them
Source: IKEA
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. Industry analysis
Porter’s Five
Forces
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
attractiveness
Source: professor Michael E. Porter
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. 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. 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. Customer analysis
To truly know shoppers and end users
To know consumers better than any competitor does
To uncover unarticulate needs
To see opportunities before they are obvious to others
Etnographic study of consumers
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. SWOT analysis
Internal analysis
Weaknesses Strengths
Threats Opportunities
External analysis
Source: professor Michael E. Porter
36. What is strategy?
Strategy defines the company’s distinctive
approach to competing
- Creating a unique value proposition
- Doing things differently to deliver
superior value
- Choices
Source: professor Michael E. Porter
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. Value Proposition Canvas &
Business Model Canvas
- Creating a unique value proposition
Blue Ocean
Strategy
39. Good strategy
In a good strategy, the value
proposition is clear and simple
(Michael E. Porter)
An effective blue ocean strategy has
three complementary qualities: focus,
divergence, and a compelling tagline
(“Blue Ocean Strategy”)
40. Bad strategy
A hallmark of true expertise and insight is
making a complex subject understandable. A
hallmark of mediocrity and bad strategy is
unnecessary complexity – a flurry of fluff
masking the absence of substance
Bad strategy is vacuous and superficial, has
internal contradictions, and doesn’t define or
address the problem. Bad strategy generates a
feeling of dull annoyance when you have to
listen to it or read it
Source: “Good strategy / Bad strategy: The difference and why it
matters”, Richard P. Rumelt (2011)
41. There simply is no one perfect strategy
that will last for all time. There are
multiple ways to win in any almost
any industry. That’s why building up
strategic thinking capability within
organizations is so vital
Source: “Playing to win: How strategy really works”
A.G. Lafley, Roger L. Martin (2013)