Strategy is about speed, timing and window of opportunity.Strategy might change constantly in relation to changes in the environment.
What Makes an Issue Strategic?
- Strategic issues are important
- They affect the organization as a whole
- They can be apparent or below the surface
- Strategic issues can be internal or external
A Good Business Model Answers the Following
- Who is the customer?
- What does the customer value?
- How do we make money in this business
- How can we deliver value to the customers at an appropriate cost?
A Good Business Model Should Include
- What does the firm invest in, or reinvest in to generate revenues
- What does the firm invest in, or reinvest in to establish its cost position
- How do the activities of the firm impact its overall volume?
- How do revenues, costs, volume combine to generate the firm’s margin
Environment = Why
Tech, market, policy and discontinuities
Strategy = What
Choices and Tradeoffs
Organization = How
Translate strategy to action, to the right organizational structure
The goal is to align, fit, the environment and the strategy and the organization structure.
Internal Fit
- First order fit: are activities internally consistent?
- Second order fit: are activities mutually reinforcing?
- Third order fit: eliminate redundancies and inefficiencies
Good To remember…
- About disruptors: when an incumbent is challenging a core belief – it’s harder for firms in the industry to understand that the incumbent might be a real threat!
- Value proposition needs to be translated to capabilities, assets and economic model