WHAT IS THE PENTA MODEL? https://lnkd.in/gg22Vq5V

1. Where and
How to build
a Competitive
Advantage?

2. Segmentation
Customer
Convenience
Integration
Alternatives
& Expansion
Emergents
A2 Market Edges
B1 Proximity
Where To
Focus?
⍺
D1 Substitutes D2 Expansion
C2 Adjacents
C
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E1 Trend M
arkets
F2 Product
Differentiation
G1 Customer
Intimacy
How To
Compete?
I1 Proprietary
Ecosystem
I2 Unique
Enablers
H2 Dom
inant
Exchange
H
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F
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J1 Disruptive
Innovation
Best Product
Customer
Bonding
Transaction
Control
Unique
Advantage
Innovative
Value
Where To Focus?
How To Compete?

3. Where to Focus
for building a
Competitive
Advantage?
The 10 choices.

4. Segmentation
A1 Mid-Market
Focus on a niche
market segment of
specific customer
needs that are
underserved.
Option 1:
Choices about Where To Focus?

5. Focus on either
a few high-end
customer needs, or
on the commodity
needs of the many.
Option 2:
Segmentation
A2 Market Edges
Choices about Where To Focus?

6. Focus on whoever
needs easy and
quick access to
your products, or
to your locations.
Option 3:
Customer
Convenience
B1 Proximity
Choices about Where To Focus?

7. Focus on the sales
channel, to reach
more customers via
proxies, or to bypass
customer proxies.
Option 4:
Customer
Convenience
B2 Sales Chain
Choices about Where To Focus?

8. Extend business
upstream or
downstream, for
better integration
and new customers.
Option 5:
Integration
C1 Value Stream
Choices about Where To Focus?

9. Focus on other needs
of your current
customers and get
a bigger share
of their wallet.
Option 6:
Integration
C2 Adjacents
Choices about Where To Focus?

10. Focus on needs of
new customers that
can be satisfied by
adapted versions of
your products.
Option 7:
Alternatives
& Expansion
D1 Substitutes
Choices about Where To Focus?

11. Focus on needs of
customers in new
territories with same
needs as those of
current customers.
Option 8:
Alternatives
& Expansion
D2 Expansion
Choices about Where To Focus?

12. Focus on overserved
needs of marginal
customers requiring
more simplicity
and affordability.
Option 9:
Emergents
E1 Trend Markets
Choices about Where To Focus?

13. Focus on needs
of non-customers
that they were
unaware of before
you addressed them.
Option 10:
Emergents
E2 New Markets
Choices about Where To Focus?

14. Now, look again:
Segmentation
Customer
Convenience
Integration
Alternatives
& Expansion
Emergents
Problems
To Solve
⍺
A2 Market Edges
Vanity, Top-tier Market
Problem: Exceptional class belonging
Commodity, Long-tail Market
Problem: Afordability to buy
B1 Proximity
Physical Proximity
Virtual Proximity
Problem: Quick & easy buyer’s access
D1 Substitutes
Industry Cross-Adoption
Problem: Imperfect legacy solutions
Customer Jobs Replacement
Problem: Obsoleting legacy buyer needs
D2 Expansion
Globally-Local Markets
Problem: Foreign buyer needs intimacy
Global Sales Channel Expansion
Problem: Foreign buyer needs
C2 Adjacents
Complementary Customer Jobs
Problem: Related buyer needs
Counter-Disruption Engine 2
Problem: Defend against disruption
C1 Value Stream
Upstream Integration
Downstream Integration
Problem: VS cost reduction
B2 Sales Chain
Sales Chain Refocus
Problem: Deproxying buyer relations
Franchise Network
Problem: Proxy-focused scaling
A1 Mid-Market
Specialty & Affinity Segmentation
B2B or B2C
Problem: Niche buyer needs
E2 New Markets
New Customer Jobs
Problem: New needs innovation
BOS Marginal Buyers
Problem: Mostly unsolved needs
E1 Trend Markets
Over-served Customer Jobs
Problem: Unsophisticated buyer needs
Technology Early Adopters
Problem: Novelty quest needs
10 Strategic Choices categories:
Where to focus?

15. How to Compete
for building a
Competitive
Advantage?
The 10 choices.

16. Gain an unrivaled
cost advantage
based on operational
excellence and
flexible supply chain.
Option 1:
F1 Cost
Leadership
Best Product
Choices about How To Compete?

17. Build a significant
advantage based
on differentiating
product attributes
and features.
Option 2:
F2 Product
Differentiation
Best Product
Choices about How To Compete?

18. Gain a significant
advantage by
providing a
differentiating
customer experience.
Option 3:
Choices about How To Compete?
G1 Customer
Intimacy
Customer
Bonding

19. Build a significant
advantage through
added value services
or one-stop-shop
horizontal breadth.
Option 4
Choices about How To Compete?
G2 Added
Value
Customer
Bonding

20. Develop a unique
advantage by raising
competitive barriers,
or by gaining privileged
access to customers.
Option 5
Choices about How To Compete?
H1 Exclusiv
Channel
Transaction
Control

21. Build a dominant
platform to reach
a critical-mass of
transactions between
buyers and sellers.
Option 6
Choices about How To Compete?
H2 Dominant
Exchange Transaction
Control

22. Build an ecosystem
of value-adding
complementors to
your success product
set as standard.
Option 7
Choices about How To Compete?
I1 Proprietary
Ecosystem
Unique
Advantage

23. Build a new value
proposition upon
your differentiating
capabilities or your
VRIN* resources.
Option 8
Choices about How To Compete?
I2 Unique
Enablers
Unique
Advantage
* Valuable, Rare, Inimitable, Non-substituable

24. Use technology to
provide a simpler,
ubiquitous, more
affordable alternative
to an existing product.
Option 9
Choices about How To Compete?
J1 Disruptive
Innovation
Innovative
Value

25. Build a higher-value
but lower-cost
value proposition with
competitive factors
never used before.
Option 10
Choices about How To Compete?
J2 Conceptual
Innovation
Innovative
Value

26. Now, look again:
How To Compete?
10 Strategic Choices cathegories:
Solutions
to Deliver
Best Product
Customer
Bonding
Transaction
Control
Unique
Advantage
Innovative
Value
F2 Differentiation
Quality & Functionality Enhancement
Solutions: Develop product differentiation
Sustaining Innovations
Solutions: Product innovative enhancements
G1 Customer Intimacy
Optimized Customer Experience
Solutions: Optimize customer CX curve
Advanced Customization
Solutions: Serve the market-of-one
I1 Proprietary Ecosystem
De-facto or Industry Standard
Solution: Turn product’s success into a standard
Value-Adding Complementors
Solution: Develop a network of complementors
I2 Unique Enablers
Building on Unique Capabilities
Solution: Turn unique capabilities into new products
Building on VRIN Resources
Solution: Use the VRIN resources for new products
H2 Dominant Exchange
Multi-sided Platform
Solution: Control the value exchange
Transaction Brokerage
Solution: Become the customer proxy
H1 Exclusive Channel
Entry-Barrier Constraints
Solution: Block competitor’s access
Exclusivity or Licensing
Solution: Gain exclusive access
G2 Value-Adding
One-Stop-Shop
Solution: Develop a horizontal portfolio
Services to Products Add-on
Solutions: Add-ons to enhance products
F1 Cost Leadership
Operational Excellence
Solutions: Lower internal costs
Lower External Costs
Solutions: Lower external costs
J2 Conceptual Innovation
Capture New Customer Jobs
Solution: Conceptually new products
Break Value-Cost Trade-Off
Solution: 4-way framework for new products
J1 Disruptive Innovation
Functional Simplification
Solution: Incumbent products made accessible
Lower Specifications Solution
Solution: Lighter versions of existing products

27. This library of choices types
is mostly used as
a Cognitive Reference Model
for defining the
Strategic Choices of our Strategy.
We get something like this:
F1 F2 G1 G2 H1 H2 I1 I2 J1 J2
A1
A2
B1
B2
C1
C2
D1
D2
E1
E2
B2G2
D1H1
B1I2
Solutions-to-Deliver
Problems-to-Solve
Strategic
Choices
Types
Strategic
Positioning
Mix

28. The Penta Model
of
Strategic Choices