Vwbs
Vwbs
Vwbs
Stefano Li Pira
Assistant Professor
November 9th, 2018
• Competition is irrelevant.
STATIC
DYNAMIC
Environment Strategy
Dynamic strategy & traditional framework
STRATEGY
ANALYSIS
Pestle; Porter 5F;
Competitor Analysis
ORGANIZATIONAL
ARRANGEMENT
STRATEGY
The central
MISSION OBJECTIVES concept of how
we will achieve
our objectives
Dynamic strategy & traditional framework
STRATEGY
ANALYSIS
Pestle; Porter 5F;
Competitor Analysis
ARENAS
ECONOMIC
STAGING VEHICLES
ORGANIZATIONAL
ARRANGEMENT
LOGIC
STRATEGY
The central
concept of how
DIFFERENTIATIORS we will achieve
our objectives
The major elements of Strategy
BLUE OCEAN
STRATEGY
ARENAS
CORPORATE
STRATEGY
ECONOMIC
STAGING VEHICLES
LOGIC
CO-OPETITION
DIFFERENTIATIORS
The traditional paradigm
74 firms
12 firms
Competitive Competitive
advantage advantage
t t
Shift our energy and focus
• Identify sustained
competitive advantage
• Strategy: fundamentally
defensive
MATURITY
DECLINE
GROWTH
INTRODUCTION
Time
Stages of the Industry Life Cycle
Industry Sales
MATURITY
DECLINE
GROWTH
INTRODUCTION
Time
The evolution of industry structure over the Life Cycle
INTRODUCTION GROWTH MATURITY DECLINE
price per bottle refined marketing aging quality vineyard’s sophistication of diverse range of
packaging efforts prestige taste wines
Factors of competition
• 1,600 wineries Value curves: All are ‘different in the same way’
Plot your buyer utility map
• Is the current industry creating hidden pain points that limit demand
for its offerings and exclude potential buyers?
Fun & Image Tangible and intangible aesthetic look, feel, attitude, and style an offering conveys
X = pain point that blocks buyer utility; O = utility space the industry currently focuses on
Buyer utility map of wine industry
Convenience O
Risk Reduction O
Environmental
Friendliness
X = pain point that blocks buyer utility; O = utility space the industry currently focuses on
Where could we be?
[who are noncustomers]
• Soon-to-be non-customers:
• Use the product or service minimally
• Would stop using it immediately, if there was a better
alternative
• Refusing non-customers:
• Consciously thought about the product or service, but reject it
• E.g., it doesn’t meet their needs, is too expensive, or is
unethical
• Unexplored non-customers:
• Have never seriously considered using the product or service
How do we get there?
Tools
• Strategic Canvas – ERRC
Because non-customers
• considered wine ‘intimidating and pretentious’
• were more attracted to beer, spirits, cocktails, ...
Strategy canvas as action framework
Metric
price per refined marketing aging quality vineyard’s sophistication diverse range Easy-drinking Easy of Fun and
bottle packaging efforts prestige of taste of wines selection adventure
Factors of competition
REDUCE CREATE
Reduce factors that are Create new factors
overdesigned • Easy drinking: ‘up-front’ flavors
• Complexity of taste • Ease of selection: 1 white and 1
• Vineyard’s prestige red wine
• Range of wines • Fun and adventure: vibrant
colors
Summing up
Cirque du Soleil
• Which industries did they transcend?
• Which key factors did they eliminate? Why?
• Which non-customers did they attract?
The alignment of Three Strategy Proposition
Implementing a coherent system (rather than focusing on
individual elements of the value curve) is difficult.
Value Proposition
Utility - Price
Blue
Ocean
Strategy
NAPSTER ITUNES
Value Proposition + +
Profit Proposition - +
People Proposition - +
Results Could not sustain for Created a Blue
long Ocean
The Online Encyclopedia Industry
◉ Launched in 2001
ELIMINATE RAISE
Subscription fees
Diversity of topics
Distracting advertisements
Ease of finding relevant info
Copyright restrictios on re-
Real-time knowledge
use of information
REDUCE CREATE
User interaction and
participation
Data accuracy and reliability
Accessibility in one’s own
language
Strategy Canvas
Profit Proposition
Value Proposition
Utility - Price
Blue
Ocean
Strategy
• Economic & Legal barriers: the first innovator enjoy a cost advantage
or a legal protection (e.g. economies of scale, learning curve,
patents, network effects)
Is there a way to see blue ocean opportunities
in a systematic manner?
Path 1: Look across Most organizations focus on beating competition within their existing industries. Buyers
alternative industries often weigh alternative industries and make trade-offs, implicitly or explicitly. Why do
people choose for and against your industry or the alternatives?
Path 2: Look across strategic Most companies focus on outperforming their rivals within their strategic group or
groups market segment. Understand what factors determine buyers’ decision to trade up or
down from one strategic group to another.
Path 3: Look across chain Most industry has common definition of their target customers. In reality, the purchasing
of buyers and redefine the decision usually involves, directly or indirectly, a chain of buyers who have different value
buyer group preferences. Uncover hidden sources of utility from the buyer groups that the industry
traditionally ignored.
Path 4: Look across Most products and services define their industry boundaries and focus their efforts solely
complementary products on maximizing its value within the boundary. Define the total solution buyers seek to
and service offerings understand the complementary products and services that enhance or detract from the
existing offering.
Path 5: Rethink your Most organisations in a given industry competes around the same bases of its appeal -
functional-emotional either on functionality or emotion. Shift the industry’s principal appeal from one basis to
orientation of the industry another; or blend the sources of its appeal.
Path 6: Participate in Instead of projecting external trends and trying to pace actions to keep up with the
shaping external trends trends, find how a trend will change what customers value and how it might impact a
over time company’s business model.
Summing up
◉ Leverage your competitive position and
recognize that your advantage is transitory