Long

1
Long Vickers-Koch

• Mintzberg - successful strategies tend to be
  visions, not plans

2
Core Capabilities

• Threshold Capabilities
• Support (internal)
• Basic (required)

• Core Capabilities
• Critical (todays advantage)
• Cutting Edge (tomorrows advantage)

3
Williams Companies

• Gas Pipelines to Fiber Optics
• Whats the connection?
• Whats the core capability?
• What about Pioneer and Dominos?

4
Creating Value

• low cost
• best product features and quality
• meeting each customers needs and special services

5
Choosing Strategy

• Must match core capabilities to strategy,
  because
• it must be hard for competitors to copy
• it is also hard for your own company to change

6
Barney

• When performing SWOT analysis, rate internal
  assets by
• value
• rareness
• immitability
• (Caterpillar 2-day part policy)
• organization
• (Walmarts reporting structure for many rural
  stores)

7
Cola Wars

• Pepsi challenge in Houston
• 7-14 share growth
• price was reduced to half to get it done
• No longer head to head competition
• Coke
• older customers (Diet Coke), soft drinks,
  international
• Pepsi
• younger customers (new generation), fast-food
  diversification, domestic

8
Porter

• What is strategy?
• Operational effectiveness
• not strategy
• necessary but not sufficient
• Strategy rests on unique activities
• Southwest Airlines
• Ikea

9
Origins of Strategic Positions

• Variety-based
• choose products or services rather than customers
  (Jiffy Lube, Vanguard)
• Needs-based
• customer segment (cans, banking)
• Access-based
• reaching customers - geography is one
• (Carmike Cinemas)

10
Three generic strategies

• Sustainable Strategic Position
• cost-based
• differentiation
• focus
• Trade-offs are necessary
• inconsistent image or reputation
• mutually exclusive activities
• limits on internal coordination and control

11
Fit

• Three levels of fit
• simple consistency (Vanguard)
• reinforcing activities (Neutregena, BIC)
• optimization of effort (GAP)
• Advantage grows out of the entire system and
  leads to sustainability
• competitors must match the system
• matching just one can lead to declining
  performance
• joint probabilities of matching all?
• (Continental Lite v. Southwest)

12
Alternative Views of Strategy Figure 8 (page 450)

• Old Implicit Model
• one, ideal position
• benchmarking
• outsourcing
• partnering
• key success factors
• flexible, rapid responses to competitors

• New Sustainable Model
• unique company position
• tailor activities to strategy
• clear trade-offs and choices w.r.t. competitors
• advantage arises from fit
• sustainability from system
• operational effectiveness given
• growth is a trap?

13
DAveni

• Hypercompetition
• rapidly escalating competition based on
  price-quality positioning
• results from
• new knowledge - first mover advantage
• protecting or invading product or geographic
  markets
• deep pockets (deeper with alliances)
• (Seed industry?)
• Moving toward perfect competition
• sustainable competitive advantage is difficult

14
Levels of Industry Competition

• No Competition
• monopoly, patents, excessive profits
• Competition Avoidance
• segmentation, barriers to entry, tacit
  cooperation, sustainable advantage and profits
  possible only if competitors collaborate
• Hypercompetiton
• aggressive positioning by disadvantaging
  competitors, creation of new advantages, new
  arenas, advantages are temporary with profits
  until catch-up or next move
• Perfect Competition
• players equal, compete on price, no abnormal
  profits, not preferred over lower levels of
  competition

15
7 Ss - Disrupting the Market

• Vision
• superior stakeholder satisfaction
• strategic soothsaying
• Capability
• positioning speed
• positioning surprise
• Tactics
• shifting the rules
• signaling intent
• simultaneous and sequential thrusts

16
Vision

• Identify new customer needs that the customer
  doesnt currently know.
• Find new customers.
• Create new needs.
• Predict change.
• These require strategic soothsaying.

17
Hypercompetion

• Trade-offs among the 7 Ss are inevitable.
• The 7 Ss will remain advantageous
• flexible
• dynamic
• there are trade-offs, you cant use them all