Strategic Market Management

Global Perspectives

David A. Aaker and Damien McLoughlin

ISBN: 978-0-470-68975-2
www.wileyeurope.com/college/aaker

© Copyright 2010 John Wiley & Sons Ltd

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 Chapter Seven

Creating advantage, Synergy and

Commitment versus Opportunism
versus Adaptibility

© Copyright 2010 John Wiley & Sons Ltd

2
“All men can see the tactics whereby I conquer, but
what none can see is the strategy out of which great
victory is evolved.”

Sun-Tzu, Chinese military strategist

“The possibilities are numerous once we decide to
act and not react.”

George Bernard Shaw

“Our work is certainly challenging, but we are not
under any pressure except for the pressure to
outperform”

Li Ka-Shing.
 The Sustainable Competitive
Advantage
The
TheWay
WayYouYouCompete
Compete
••Product
Productstrategy
strategy
••Positioning
Positioningstrategy
strategy
••Manufacturing
Manufacturingstrategy
strategy
••Distribution
Distributionstrategy,
strategy,etc.
etc.

Basis
Basisof
ofCompetition
Competition
••Assets
Assetsand
andcompetencies
competencies SCA
What
WhatYou
YouOffer
Offer
••Value
ValueProposition
Proposition

Where
WhereYou
YouCompete
Compete Figure 7.1
••Product-market
Product-marketselection
selection
••Competitor
Competitorselection
selection

Figure 8.1
SCAs
SCAs
versus
versus
KSFs
KSFs
 Strategic Options
Quality
Quality
Being
Being Product
Product
Global
Global Attribute
Attribute

Product
Product
Innovation
Innovation Design
Design

Strategic
Product
Product
Focus
Focus
Options Line
Line
Breadth
Breadth

Value Corporate
Corporate
Value Social
Social
Responsibility
Responsibility
Customer
Customer Brand
Brand
Relationships
Relationships Equity
Equity Figure 7.3

Figure 8.3
 Synergy
 Two or more businesses in combination will generate:
– Increased customer value and thus loyalty and/or
sales
– Lower operating costs
– Reduced investment
 Challenge
– Finding it
– Overcoming organizational issues
• Especially when an alliance is involved

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-9

 Core Assets & Competencies

 Assets & competencies that underlie a large set of

businesses

 A tree metaphor illustration

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-10

 Strategic Philosophies

 Strategic commitment

 Strategic opportunism

 Strategic adaptability

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-11

 Strategic Vision
 A clear future strategy
 Buy-in throughout the organisation
 Assets, competencies, and resources to implement
 Patience
 Vision versus Opportunism
Strategic Strategic
Approach Risk

Focus on Strategic Strategic

Future Commitment Stubbornness

Strategic Strategic
Focus on Opportunism Drift
Present
Strategic Strategic Blunders:
Figure 7.5 Adaptability misread trends

CUT THESE 2 BOXES

Figure 8.5
 Strategic Commitment
 Assumes that the current strategy will work
into the future
 Tunnel vision—avoid distractions
 Buy-in throughout the organization
 Improve the offering, the costs, the customer
relationships
 Patience

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-14

 Strategic Opportunism

 Assumes a fast changing market and that it is not possible to

predict the future so that the best strategy is to be sensitive to
current opportunities and exploit them.

 Short-term oriented

 Decentralized, entrepreneurial, risk taking organization

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-15

 Strategic Adaptability

 Assumes a changing market and that the organization can

predict and manage responses to those changes

 A medium term perspective

 Organization is flexible and supports investments behind

trends

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-16

 Blended Philosophies

 Involves all three philosophies

 Each is often needed

 Starbuck’s

– Ice Cream

– Coffee in United

– Kiosks in supermarkets

– Instant coffee in supermarkets

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-17

 Key Learnings
 To create an SCA, a strategy needs to be valued by the market and supported by assets and
competencies that are not easily copied or neutralised by competitors. The most common
SCAs are quality reputation, customer support, and brand name.

 Synergy is often sustainable because it is based on the unique characteristics of an

organisation.

 Strategic commitment, involving a ‘stick-to-your-knitting’ focus on a clearly articulated

strategy, is based on an assumption that the business model needs to be refined and improved
and not changed.

 Strategic opportunism assumes that the environment is so dynamic and uncertain that it is
futile to predict the future and invest behind those opportunities when they present themselves,
with the goal of achieving immediate profits.

 Strategic adaptability, based on the assumption that it is possible to understand, predict and
manage responses to market dynamics that emerge, and even create or influence them, is about
managing relevance.
 Ancillary Slides

© Copyright 2010 John Wiley & Sons Ltd

19
 “Capital isn’t that important in business.
Experience isn’t that important. You can get both
of these things. What is important is ideas.”

Harvey S. Firestone
“The secret of business is to know something that
nobody else knows.”

Aristotle Onassis
 “Business more than any other occupation is a
continual dealing with the future; it is a continual
calculation, an instinctive exercise in foresight.”

Henry R. Luce
“The rewards in business go to the man who does
something with an idea.”

William Benton
“Boldness in business is the first, second, and
third thing.”

Thomas Fuller
 “Do not quench your inspiration and your
imagination; do not become the slave of your model.”

Vincent van Gogh, Painter

“No one can possibly achieve any real and lasting
success or “get rich” in business by being a
conformist.”

J. Paul Getty