Corporate Strategy in Europe (Subject) / Industry context (Lesson)
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- CONCEPT 21: DEALING WITH INDUSTRY TRENDS New response needes l High uncertainty: Strategic Innovation => Inspirational New response needed l Low uncertainty: Change management (new entrants,new technology) => Judgemental Old response appropriate l Low uncertainty: Stable growth (sense of security)
- CONCEPT 21: WHY DINOSAURS DIE + INDUSTRY TRENDS 46% of the best performing companies in 1997-2001 where not among the best in 2007-2011 => WHY DINOSAURS DIE 1. New Key Success Factors: Faster innovation International competition Sustainability Industry evolutions 2. New Sources of Compeititon Free-riders Disruptors Strategic innovators Changes in the business environment force companies to find new ways to serve their customers profitably Increasing competitive pressures threaten existing businesses Reduced barriers to entry New customer (and stakeholders) needs or tastes emerge that requires new answers l Chemicals for smartphones Disruptive technologies make existing businesses obsolescent Emerging technologies provide new opportunities for VALUE creation (ICT, energy, health, materials...)
- CONCEPT 22: NEW SOURCES OF COMPETITION: Strategic meteorites 1. Free riders: Turn your business into a commodity by leveraging other sources of profits => New business models Google maps, IKEA FOOD, Amazon 2. Disruptors: Enable customers to do for themselves things that only skilled intermediaries could previously do => Disruptive technologies SKYPE 3. Strategic innovators : Make the competition irrelevant by offering fundamentally different buyer value in existing markets => New value propositions APPLE, TESLA leads to: Innovation tensions that redefine the core “Collective routines, know- how and culture developed through substantial experience and learning”
- CONCEPT 23: Exploitation vs. Exploration 1. Industry Leadership Approach Change the Game / Set the rules Leverage projects of your partners Destroy yourself; challenge approaches (unbounded/creative) Make bold moves - radical 2. Industry dynamics approach Compliance Exploitation Play by the rules => but WIN the game Improve existing solutions Maintain and improve performance Develop long-term (core) competencies Defend existing business/markets Incremental product changes
- CONCEPT 24: STRATEGIC INNOVATION Time matters Existing industry models Competitive Advantage - Makes Competition irrelevant “Collective routines, know- how and culture developed through substantial experience and learning” Creating new space that is “off the map”
- CONCEPT 21: IMPLICATIONS FOR CORPORATE STRATEGY l Methods of Strategic Development Internal development Unique product development and manufacturing processes Customer contacts Cost Merger and acquisition Speed and cost Barriers to entry Financial and growth motives Partnerships (Joint ventures, consortia, networks contracts, ...) Scale and scope economies; complementary assets Learning and risk sharing Local knowledge