BA 569 – Fall 2008 Alex Brenner Arjang Fartash Lan Phough Thi Nguyen

BA 569 – Fall 2008
Alex Brenner
Arjang Fartash
Lan Phough Thi Nguyen
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Who:
▪ Targeted Customers
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What:
▪ Product & Services
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How:
▪ Business conduct
▪ Activities to perform efficiently
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Sources of Success:
 The company defines, establishes & exploits:
▪ A unique & distinctive strategic position
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Sources of Business Failures:
 Does not make clear & specific choices on:
▪ The three Dimensions (3D):
Who, What, How
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In 1988 Nestle’s Espresso machine
(Nespresso) faced serious financial
challenges
Offices & Restaurant were targeted
through a distributor (Sobal Inc.)
Revenues took off after a new strategy:
 What: Coffee capsules for Nespresso –V
 Who: High-income households – R
 How: Distribute by mail – O
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In 1970 – Implemented a new strategy
Growth took off – 15% annually
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The New Strategy:
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 Who: Rural retail customers – V & R
 What: Selected & trusted products – R
 How: Family-like partnership
of brokers – I & O
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The rise of Xerox – from 1960 thru 1980’s
Xerox invented the copier technology
First mover’s advantage – I & R
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Implemented a clear & concise strategy:
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 Who: Corporate clients – V
 What: High speed/vol. copiers – V & R
 How: Lease & use direct sales-force – O
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IBM & Kodak introduced copiers w/ strategies
similar to Xerox:
 Who: High & medium end business customers – V
 What: High speed and/or lower cost copiers – V & R
 How: Direct sales force – O
IBM & Kodak failed
 Head-on strategies that were imprecise
& unable to compete with Xerox’s V-R-I-O
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Cannon adopted a unique strategy:
 Who: Small & medium businesses & consumers – V
 What: Quality copiers at competitive prices – V & R
 How: Dealer network sales – O
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Cannon’s strategy succeeded
Cannon adopted a distinct strategy & grew its
sales, and over time  I
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Industry
Dominant
Competitor
Traditional
Competitor
Strategic
Innovator
Securities
Merrill Lynch
Smith Barney,
Edward Jones
Dean Witter, Paine
Webber
Photo-copier
Xerox
IBM, Kodak, Ricoh
Cannon
Coffee
General Foods
(Maxwell House)
Procter & Gamble,
Nestle, Sara Lee
Starbucks
US Airlines
American
Delta, United,
Northwest
Southwest
Computer
IBM
NCR, Control Data
Microsoft
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Compete efficiently & meet your current
products / demand commitments – V
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Experiment w/ new Tech & Ideas – I

Create an ambidextrous organization – I &R
Cannibalize the existing strategic
position to create a new one – I & R
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Build a monitoring system – V
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Prevent cultural inertia – V & R & I
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Develop processes to enable
experimentation – V
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Be prepared to acquire new
competencies – V & R
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Manage the transition – V & I
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Compete
in the
Context
Make
Transition
to Mission
Search for
a New
Strategy
Manage
Context &
Mission
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What does strategic positioning mean?
 Who, What, How  V-R-I-O

What options exist to address disruptive
competitive threats?
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Dynamics of strategy and its four phases
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Join your IBP team
Each IBP team must provide the following:
 Identify the Dominant & Traditional companies
in your sector
 Define your IBP business strategic positioning
statement in terms of Who-What-How
 Describe each element in terms V-R-I-O
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The audience will pick the winner
The winning team will receive a prize
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