To lay the ground work on creating a good strategy, it is important to understand what it is first and foremost. Your strategies are the general methods you intend to use to reach your vision. It means deliberately choosing a different set of activities to deliver a unique mix of value. That is the kernel of good strategy and our basis from the guru of strategy.
This organization-wide strategy statement from Edward Jones is a great example. In our next post we will get into the details on the levels, but for now here is a top level view. The three levels of strategy are:. Your Website. Save my name, email, and website in this browser for the next time I comment. Michael Porter uses the concept of clusters of identical product groups in which there is considerable competitive pressure.
Businesses within clusters usually stimulate each other to increase productivity, foster innovation and improve business results. Companies operating in such clusters work according to Porter Diamond Model. In addition, they have the advantage that they can move very well on the international market and that they can maintain their presence and handle international competition. Examples of large clusters are the Swiss watch industry and the Hollywood film industry. This home base provides basic factors that support an organization, including government support but they can also hinder it from building advantages in global competition.
The determinants that Michael Porter distinguishes are:. This is the situation in a country relating to production factors like knowledge and infrastructure. These are relevant factors for competitiveness in particular industries. These factors can be grouped into material resources- human resources labour costs, qualifications and commitment — knowledge resources and infrastructure.
But they also include factors like quality of research or liquidity on stock markets and natural resources like climate, minerals, oil and these could be reasons for creating an international competitive position. The success of a market also depends on the presence of suppliers and related industries within a region. Competitive suppliers reinforce innovation and internationalization. Besides suppliers, related organizations are of importance too. If an organization is successful this could be beneficial for related or supporting organizations.
In this determinant the key question is: What reasons are there for a successful market? What is the nature of the market and what is the market size? There always exists an interaction between economies of scale, transportation costs and the size of the home market. If a producer can realize sufficient economies of scale, this will offer advantages to other companies to service the market from a single location. In addition the question can be asked: what impact does this have on the pace and direction of innovation and product development?
This factor is related to the way in which an organization is organized and managed, its corporate objectives and the measure of rivalry within its own organizational culture. The Furthermore, it focuses on the conditions in a country that determine where a company will be established. Cultural aspects play an important role in this. Regions, provinces and countries may differ greatly from one another and factors like management, working morale and interactions between companies are shaped differently in different cultures.
This could provide both advantages and disadvantages for companies in a certain situation when setting up a company in another country. According to Michael Porter domestic rivalry and the continuous search for competitive advantage within a nation can help organizations achieve advantages on an international scale. In addition to the above-mentioned determinants Michael Porter also mentions factors like Government and chance events that influence competition between companies. Governments can play a powerful role in encouraging the development of industries and companies both at home and abroad.
They effectively created a new genre of entertainment and then proceeded to develop a unique business model to expand and scale their operations internationally. The Wii was a sensation when it was by Nintendo in November Compared to other game consoles Sony Playstation and Xbox it was unique because of the focus on motion.
Unlike other consoles, the Wii used a small handheld device to detects movement in 3D which allowed users to interact in new ways within games. The strategy canvas demonstrates that Nintendo designed the Wii to compete on different value components than Sony Playstation and Microsoft Xbox.
However, the motion control stick which mimicked the movements of a player transported the player into the video game and appealed to games that previously were very difficult on a console e. The book presents a five-step process to systematically develop a Blue Ocean initiative.
The five steps are:. The Strategy Canvas is the cornerstone of the blue ocean strategy. The strategy canvas is used to plot the current main dimensions that are valued by customers and used by you and your competition. Normally there are lots of overlaps between competitors and minor differences in a market.
As a result, the visualization can be used to analyse and formulate a competitive strategy. The Strategy Canvas is basically an action framework which is represented by a line graph to pinpoint. This next step is to experiment and reinvent the opportunities and market space by identifying value innovation opportunities. To understand more about pains and gains see the article on designing a value proposition. In a similar way you to understanding customers pain points, you need to go out and explore customer paths.
Three Tiers of Non-Customers is a mental framework for exploring how to reach non-customers and pull them into a new market. There is generally less in terms of large-scale quantitative evidence to back up their claims. It should be noted that Kim and Mauborgne b, p.
There are two blue ocean strategy pdf templates included in the free download, an excel sheet you can use to create a strategy canvas and a Microsoft PowerPoint. Do you have a clear content strategy? A clear marketing strategy? Content Strategy - What…. Innovation is happening faster than ever, keep up with new ideas, tools and technologies.
Table of Contents. What is a Blue Ocean Strategy? Related Posts. What is a Social Media Strategy Definition and Thoughts Some may see that there is no need for a social media strategy definition. I want updates. Share via. Facebook Messenger. Copy Link.
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