Saturday, October 24, 2009

Are you sure you have a strategy? (Hambrick & Fredrickson)

Framework for Strategy Design – based on 5 elements
[Arenas, vehicles, differentiators, staging & economic logic]

1. What actually constitutes strategy?
2. What are the 5 key elements of strategy?
Arenas: Be specific about where you will be active, what areas/categories you will emphasize. Strategy may be centered on one product or one category or one customer segment
[Product Categories, market segments, geographic regions, core technologies, value creation stages?? Key product or complementary one?

Vehicles: how do you intend to attain a significant business presence in your chosen Arena?
(Joint Ventures, strategic alliances, acquisitions, R&D, Product Development, Marketing, Globalization)?

Differentiators: Image, customization, price, styling, quality, reliability? What is the value proposition?

“Arena’s, Differentiators & Vehicles – constitute the “substance of strategy”.


Staging: Set priorities – what do we do first? What’s the plan of a record? What is the sequence by which we entire a specific arena? How quickly do we move? What’s our time horizon?
[Key influencing factors include: Funding, Urgency – i.e. first mover advantage? achievement of credibility]. Sometimes the pursuit of early wins is also important because it can help build momentum.

Economic Value: How will profits be generated? What’s our biz model and how does it tie in to the other 4 elements? What’s our pricing strategy?
o Economic logic analytics, results in a determination of how profit will be generated. That could happen on the front end, through aggressive pricing, or on the back end by effectively monitoring costs

Note: Strategy is not primarily about planning- it’s about intentional, informed, and integrated choices. The strategy diamond featuring the 5 strategic elements is a basis for creating a well thought out intentional, informed and plan.

1 comment:

  1. There are certain point in our life that we encounter failure but it doesn't mean you will lose hope and give up everything but it only means that every failure there's an exchange and that is new beginning. Well, thank you for sharing your article and keep on posting. Visit my site too for more information.

    triciajoy.com

    www.triciajoy.com

    ReplyDelete