A Dynamic VIEW OF STRATEGY

Innovators Dilemma

BA 569 Fall 2008

Alex Brenner
Arjang Fartash
Lan Phough Thi Nguyen
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The Heart & Soul of
Strategy
Who:
Targeted Customers

What:
Product & Services

How:
Business conduct
Activities to perform efficiently

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 Strategic Positioning
Sources of Success:
The company defines, establishes &
exploits:
A unique & distinctive strategic position

Sources of Business Failures:

Does not make clear & specific choices on:
The three Dimensions (3D):
Who, What, How

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 Example 1: Nestle V-
R-I-O
In 1988 Nestles 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
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Example 2: Edward Jones V-
R-I-O
In 1970 Implemented a new
strategy
Growth took off 15% annually

The New Strategy:

Who: Rural retail customers V & R
What: Selected & trusted products
R
How: Family-like partnership
of brokers I & O
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 Example 3: Xerox V-R-
I-O
The rise of Xerox from 1960 thru
1980s
Xerox invented the copier
technology
First movers advantage I & R

Implemented a clear & concise

strategy:
Who: Corporate clients V
What: High speed/vol. copiers V & R
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 Example 3: Xerox / IBM
& Kodak
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 Xeroxs V-R-I-O
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 Example 3: Xerox /
Cannon
Cannon adopted a unique strategy:
Who: Small & medium businesses & consumers
V
What: Quality copiers at competitive prices V
&R
How: Dealer network sales O

Cannons strategy succeeded

Cannon adopted a distinct strategy & grew
its sales, and over time I
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Dominant / Traditional /
Innovator

Industry Dominant Traditional Strategic

Competito Competito Innovator
r r
Securities Merrill Lynch Smith Barney, Edward Jones
Dean Witter,
Paine Webber
Photo-copier Xerox IBM, Kodak, Cannon
Ricoh
Coffee General Foods Procter & Starbucks
(Maxwell Gamble,
House) Nestle, Sara
Lee
US Airlines American Delta, United, Southwest
Northwest
Computer IBM NCR, Control Microsoft 9
 Option #1: Become
Innovator
Compete efficiently & meet your
current products / demand
commitments V

Experiment w/ new Tech & Ideas

I

Createan ambidextrous
organization I &R
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Option #2: Exploit others
Innovations
Build a monitoring system V

Prevent cultural inertia V & R & I

Developprocesses to enable
experimentation V

Beprepared to acquire new

competencies V & R

Manage the transition V & I

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A Dynamic Strategy

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Conclusion

What does strategic positioning

mean?
Who, What, How V-R-I-O

What options exist to address

disruptive competitive threats?

Dynamics of strategy and its

four phases
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 Agenda Which IBP Team has
the best strategic positioning?
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
The audience will pick the winner
The winning team will receive a prize

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