Reinventing your business model

My understanding of the article by Johnson, Christensen and Kagermann:

To determine whether a company needs to reinvent its business model, following steps need to be undertaken:

•        Find what makes the existing model successful or unsuccessful.
•        Find out signals that suggest that the model needs change
•        Decide if changing the model is worth the effort

Understanding the current model

A successful model has three components:

Customer Value Proposition: providing customers a unique offering that competitors cannot provide

Profit Formula: the model generates revenue for the company through multiple factors like revenue model and inventory turnover

Key resources and processes: the company has in place the required resources and processes to deliver value to the customers

Identifying the need for new model

An opportunity: when large consumer segments find existing solutions too expensive or complicated, a new technology opening up new avenues etc

A need: response to shift in competition or overcoming the challenge of new or evolving competitors

Strategic Management

Strategic management is about taking "strategic decisions" of an organization, those that define the way an organization functions. In practice, strategic management has three main components:

1.    Strategic Analysis

2.    Strategic Choice

3.    Strategy Implementation

Strategic Analysis

It is about analyzing the strengths of a business and understanding the external factors that influence it. The process of Strategic Analysis can be assisted by a number of tools, including:

PEST Analysis - a technique where the political, economic, social and technological analysis of a business’s environment is done

Scenario Planning - a technique which builds various possible views of the future of a business

Five Forces Analysis - a technique which analyses the five forces pertaining to a business, its market and its competition

Market Segmentation - a technique which identifies similarities and differences between groups of customers

Directional Policy Matrix - a technique which summarizes the competitive strength of a business’s operations in specific markets

Critical Success Factor Analysis - a technique which identifies areas in which a business must outperform the competition for achieving success

SWOT Analysis - a technique which summarizes the strengths, weaknesses, opportunities and threats to a business.

Strategic Choice

This process involves the understanding of stakeholder expectations, identifying strategic options, and evaluating and selecting the right strategic option.

Strategy Implementation

Quite often the hardest part, after all possible strategies has been analyzed and the right one selected, the task is then to implement it into organizational action.

Strategy in Business

Business strategy determines the success of an organization. It defines the way an organization intends to tackle competition. A business strategy intends to define the following:

Ø  Scope of business

Ø  Current and future needs of customers

Ø  Capabilities of the organization/key differentiating factor for competitive advantage

Ø  Ways to leverage the key differentiating factor  

A business strategy being of “strategic” importance, it is necessary for a strategy to meet the following quality tests:

§  The scope of the strategy should be correctly defined

§  The strategy should be well documented

§  It should address the real needs of the customers

§  It should be in line with the core competencies of the organization

§  It should define the competitive advantage of the organization

§  It should lay the groundwork for implementation

Thus the intent of business strategy is to leverage the unique capabilities of an organization to gain as well as sustain competitive advantage in catering to the needs of customers in the market. 

Strategy at Different Levels of a Business

There are different strategies at different levels in an organization - ranging from the overall business strategy to strategy at individual level.

Corporate Strategy – It is concerned with the overall purpose of the business and ability of the organization to meet customer demands. It is heavily influenced by investors and acts as a guide for decision-making throughout the business. Corporate strategy is often stated in the vision and mission statements.

Business Unit Strategy – It is concerned more with how an organization would compete successfully in the marketplace. It affects decisions regarding choice of products, meeting needs of customers, competitive advantage, creating new opportunities etc.

Operational Strategy – It is concerned with the execution of corporate and business-unit level strategic directions. It focuses on issues of resources, processes, people etc.

Strategy in Cricket

Found a very interesting article on the use of strategy in cricket at www.mycricketgame.com. Posting it here...

Cricket Strategy and Tactics are the key to success on the cricket field: when two teams with equal skill and fitness levels engage, it is the side with superior cricket strategy who will more often than not prevail.

Winning Cricket begins off the field. It is too late when you are in the middle of a game, particularly one day and 20 20 cricket, to be able to catch up when the opposition have taken the initiative and are running away with the match.

In building a strategy to maximise the opportunity for victory on the cricket field, you are going to make primary assessments of your opponents.

Good Captains, Coaches and Players do this: they do their homework on whom they are playing and where the match is taking place. They do assessments of their opponents’ strengths and weaknesses and go about decoding their opponents' game, choking their strengths and attacking their weaknesses.

Strategy in its application in cricket is the overarching plan to bring victory.

There are Three Key Areas to Cricket Strategy, there is Individual 'Player Strategy', then there is the strategy for a 'Sub Team', for example the bowling or batting unit within the team, then there is the overall 'Team Strategy'.
Tactics are the use of different 'weapons' or units within the team and we can see they operate on different levels, the 'Players strategy' fits into the 'Sub Team strategy' and the 'Sub Team Strategy' fits into the 'Team Strategy'.
The players’ tactic may be to use a 'weapon' they have in their armory. The weapon is typically a strength they have, it may be a bouncer, a sweep shot, a googly, a lofted drive, these are used as tactics to execute their own game plan and disrupt their opponents. The batsman may choose specific tactics as part of their overall batting strategy; the great Australian batsman Matthew Hayden would bat out of his crease on an off stump guard to take the bowlers line and length away. The primary objective of the tactic is to control where the bowler bowled, thus opening up his own scoring options.
The bowling units' tactics maybe to use the short ball against a key batter who they know likes to play front foot strokes. This will force him to play strokes in the weaker parts of his or her game, off the back foot.
Another example, the Captain may ask his fast bowlers to bowl a full attacking line and length outside off stump, this tactic is so that he can set a field with the goal to get the batsman caught behind.
Strategic Cricket means playing Smart Cricket, we will compare Smart Cricket with Mindless Cricket. You can ask yourself where you are with your game and see if there is scope for you to play better, smarter, winning cricket. Smart cricketers understand that the game of cricket strategy begins off the field. They understand that what they do off the field is a reflection of what they want to make happen on the field. Smart Cricketers begin by asking the right questions, they ask what do I need to do in my 'Pre-Match Preparation' to give myself the best chance of success during the game. They look at their Mental Game, cricket strategy and tactics are key parts of the mental game, so what do they need to do to maximize the opportunity for success on the field.
Sachin Tendulkar is a Smart Cricketer, he prepares in training to roll out a specific batting plan based on what he knows about the wicket, the ground and his opponents, and he even factors in the weather.
Smart Cricketers....
1. Know what they want to make happen during the game.
2. Know their opponent, assess their opponents’ game, what are their strengths and weaknesses and how can they use this knowledge back against their opponent.
3. Construct their Game Plan so that they are maximizing their strengths and focusing them on their opponents’ weaknesses.
4. Plan their training to make sure they work through their game plan for match day.


Physical Fitness: They do their homework on what type of strength and conditioning work they will need to do to be fully prepared for competition. Most of this work is done during the off season, but there are opportunities during the season to top up on training and peak for big games.

Technical Game: They make sure that their technical game is working well; they are consistently working on polishing their game, maintaining strengths and focusing on weak areas where they may be vulnerable, so that they can turn them into strengths too. They prepare well, knowing what they need to work on during training to make sure that they are fully prepared for the next match. Whether it is for a particular bowler they are going to face or it is work on a specific delivery they want to use.
Lets contrast this with Mindless Cricket.
The Mindless cricketer plays each week without any goals. They don't prepare or plan, subsequently their game stays in the same place. There is no homework on the opposition to know what they do and how they are going to do it. So they make the same mistakes each week, and when they face the same opponents they get out to the same bowlers and the same batsman score runs off them.
Engage Your Brain
The goal is to play better, score more runs, take more wickets, hold more catches, so the need is to engage the brain to play better, smarter, more strategic cricket. 

The Five Competitive Forces That Shape Strategy

The following is a video link of an interview of Michael Porter talking on the Five Competitive Forces that shape Strategy. What better source to learn about strategy in competition than the man who formulated it all??

http://www.youtube.com/watch?v=mYF2_FBCvXw