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Strategy and Business Policy - Group 10
Strategy and Business Policy - Group 10
Strategy and Business Policy - Group 10
Group - 10
BMN-533
Strategy and Business Policy
Submitted To:
Prof. Vinay Sharma
Department of Management Studies, Indian Institute of Technology, Roorkee
Meet Our Members:
● The business world today is a whirlwind of change. New technologies emerge seemingly
overnight, customer preferences evolve at breakneck speed, and entire industries can be
reshaped by innovative business models. In this environment, crafting a successful strategy
requires constant adaptation and a holistic view.
● Take Edward Jones, a financial services firm, for example. For decades, their strategy
relied on a network of local advisors offering personalized investment guidance. This
model served them well, but recent trends like online investment platforms and
demographic shifts threatened to erode its value. Edward Jones recognized the need to
adapt and embarked on a strategic transformation.
What we will see in this Presentation?
This case study of Edward Jones exemplifies the challenges and opportunities that companies face
in today's dynamic environment. By delving into their strategic shift, we will explore how
businesses can navigate the changing landscape through effective strategy development and policy
implementation. We will examine:
By understanding Edward Jones' journey, we can gain valuable insights into crafting resilient
strategies that ensure business sustainability in the face of change
Current Challenges:
Business environment in constant flux: rapid tech advancements, shifting consumer preferences, fierc
competition.
Key challenges: disruptive technologies, evolving customer demands, intensified global competition,
regulatory uncertainties (especially in India).
2. Holistic Approach to Strategy: Integrating Business Model, Competitive Positioning, and
Implementation Processes
The holistic approach to strategy, as outlined in the provided text, emphasizes integrating three key
components:
Business Model
Reference:https://doi.org/10.1016/0263-2373(93)90032-D
I. Business Model:
The business model of a company defines how it operates, creates value, and generates
revenue. It involves identifying customer needs, designing products or services to meet those
needs, determining the pricing and revenue model, and establishing the key resources and
activities required for delivering the offering profitably.
● In the context of the Blue Ocean Strategy, the business model plays a pivotal role in
creating uncontested market space. Companies aim to innovate their business models to
offer unique value propositions that differentiate them from competitors and attract new
customers. By focusing on creating new demand rather than competing in existing
markets, companies can break away from the competition and achieve sustainable
growth.
● Neglecting to innovate the business model can trap companies in the red ocean of
competition, where they are constantly vying for market share. Without differentiation,
companies risk becoming commoditized and engaging in price wars, which erode profit
margins. Therefore, continuous innovation and adaptation of the business model are
essential to avoid falling into the traps of the red ocean and sustain competitive
advantage. Reference: http://dx.doi.org/10.2139/ssrn.932998
II. Competitive Positioning:
Competitive positioning involves defining how a company positions itself relative to
competitors in the market to capture value effectively. It entails assessing industry
attractiveness, understanding customer preferences, identifying a unique value
proposition, and strategically positioning the company to achieve sustainable
competitive advantage.
● In the Blue Ocean Strategy framework, competitive positioning revolves
around differentiation. By focusing on differentiation rather than competing
head-to-head with rivals, companies can carve out a niche for themselves and
achieve sustainable growth.
● Effective competitive positioning helps companies avoid common pitfalls in
the red ocean, such as competing solely on price or features. By offering
differentiated products or services that resonate with customers, companies
can escape the commoditization trap and maintain higher profit margins.
Reference: https://doi.org/10.14488/BJOPM.2019.v16.n4.a6
III. Implementation Processes:
Implementation processes involve translating strategic plans into actionable initiatives and ensuring their
successful execution. This includes allocating resources, defining roles and responsibilities, establishing
performance metrics, and continuously monitoring progress to achieve strategic objectives.
● In the Blue Ocean Strategy framework, effective implementation processes are vital for bringing
innovative strategies to life. Companies must allocate resources strategically, build necessary
capabilities, and monitor progress closely to ensure alignment with their blue ocean objectives.
Flexibility and adaptability are key to responding to market dynamics and sustaining competitive
advantage.
● Effective implementation processes help companies avoid common traps in the red ocean, such as
failing to adapt to changing market conditions or neglecting to invest in capabilities for long-term
success. By continuously monitoring progress and adjusting strategies as needed, companies can
navigate competitive challenges and achieve sustainable growth in crowded markets.
Reference: https://doi.org/10.3390/su71215790
3. Identifying Opportunities: Anticipating Trends & Seizing Market Potential
1. Sustained Growth: The expansion by entering into untapped markets reduces the reliance on a single product or
service, making the business more resilient to market fluctuations.
2. Competitive Edge: By being the first to enter a new market or provide a unique solution, businesses can establish a
competitive edge and secure a larger market share.
3. Risk Mitigation: Diversifying into new business opportunities helps mitigate risk by distributing the company’s
exposure across different markets and customer segments.
4. Adaptation to Change: Industries and markets constantly evolve due to technological advancements, regulatory
changes, and economic shifts. Identifying new business opportunities enables businesses to adapt to these changes.
5. Longevity: Businesses that consistently identify and pursue new opportunities are more likely to have a longer lifespan.
Adapting to changing markets and customer preferences ensures sustainable business development over time.
Reference: https://weareprimegroup.com/insights/strategies-for-identifying-and-targeting-new-business-opportunities/
Ways To Identify Business Opportunities
1. Identify Pain Points: Start by thinking about what bothers you in your daily life. What tasks or activities do
you find frustrating? Is there something you need but can't find the perfect solution for?
Eg: Bumble App created by Whitney Wolf Herd after her experience with an abusive relationship.
2. Conduct Market Research: This includes using industry research to define the competitive landscape and
determine your target audience, as well as interviewing or surveying people who fit your target
demographics.
3. Question Process: We can evaluate each process with an open mind and ask questions about how we can
improve it, such as:
a. Could this process be faster?
b. Could this process be executed using a cheaper business model?
c. Is there a more sustainable way to execute this process?
d. Does this process exclude certain groups of people? If so, is there a way to make the process accessible to
all?
4. Capturing Value: Building Competitive Advantage in Dynamic Markets
https://www.researchgate.net/publication/46460428_Value_Capture_from_Organizational_Advantages_and_Sustainable_Value_Creation
4. Capturing Value: Building Competitive Advantage in Dynamic Markets
● Edward Jones is a St Louis based brokerage firm which the author (David J Collins) has been advising for 20 years
● In 2020, under the leadership of Penny Pennington, it embarked on a plan to increase the value it created for clients.
● The plan is being implemented in a series of projects that revise many of the firm’s business practices
PROBLEM IDENTIFICATION:
Competitive Industry Investor
Firms Positioning Value Proposition Demographics Regulatory
Imitation Attractiveness Preference
• Target • The security • The firm has • The • Demographic • New • investor
Customers – and peace of 17000 offices attractiveness shift as Baby regulations preferences
Conservative mind for across US, of traditional Boomers requiring for passive
People who customers which is hard portfolio begin more asset
need regarding to replicate management spending attention to management
financial their has been down their smaller
advice , still investment eroded by accumulated accounts
remain with handling environmenta assets
the firm l changes
• Over time the
value of the
firm for
customers
has only
grown
IN CONTEXT OF THE STRATEGIC LANDSCAPE:
New Developments
Changes
● The solution was devised and it was concluded that the firm’s positioning would not be altered
● Edward Jones shifted from a transactional business model, to a more financial life solutions business model.
● The firm now offers customized advice and solutions for lifelong needs, not just purchases of mutual funds or blue-chip stocks.
● Though this approach requires more-intense engagement with customers, it creates substantially more value for them
Diversity
Multichannel Distribution
The Case of Netflix exemplifies the need for realizing value over time by constantly adapting strategies to
changing environments is Netflix. Netflix is a prominent example of a company that has successfully navigated
through various industry shifts by continuously evolving its business model and strategy.
1. Initial Strategy and Evolution: Originally, Netflix began as a DVD rental-by-mail service, disrupting the traditional brick-
and-mortar rental model. However, with the emergence of digital streaming, Netflix recognized the shift in consumer preferences
and gradually transitioned into an online streaming platform. This evolution in strategy allowed Netflix to remain relevant and
capture value in the rapidly changing entertainment landscape.
2. Content Creation and Original Programming: As competition intensified in the streaming space, Netflix realized the
importance of original content to differentiate itself from competitors. It invested heavily in producing original series and
movies, such as "House of Cards," "Stranger Things," and "The Crown." This strategic shift not only attracted new subscribers
but also retained existing ones, demonstrating Netflix's ability to adapt its activities to changing market dynamics.
Realizing value over time: Strategies For Adaptive Execution and Long Term Success:
3. Global Expansion: Netflix's success is not limited to the domestic market. Recognizing the
potential for international growth, the company aggressively expanded its operations globally.
Tailoring their strategy to adapt to the different markets
4. Technological Innovations*: To enhance the user experience and stay ahead of competitors,
Netflix continually invests in technological innovations. Such as use of recommendation algorithm.
5.Response to Market Trends and Consumer Behavior: The entertainment industry is constantly
evolving, driven by changing consumer preferences and technological advancements. Netflix
closely monitors these and adapts accordingly . For example, it quickly adapted to the rise of
mobile viewing by optimizing its platform for smartphones and tablets, ensuring seamless streaming
experiences for users on-the-go.
Entrepreneur’s Mistake
What Entrepreneurs Analyse? What is Missing?
Ways to generate value by addressing unmet customer needs.
What do Entrepreneurs fail to Analyse?
What would it take to capture a sufficient portion of that
Holistic Approach
value?
Entrepreneurs fail to see that the more value their
BED-IN-A-BOX BUSINESS MODEL business model creates, the more competition
they’re likely to face
175 Others Casper Disney Netflix
Designing a Competitive
Position
When a firm is pursuing a new business model against Intense Competition
what should it Analyse?
Industry
Competitive Attractiveness
Interaction
Industry Attractiveness – Does the industry structure allow its participants to earn
decent returns?
Competitive
Competitive Interaction – How sustainable is the advantage? Positioning
Position of Tesla - 6
Tesla has certainly identified and exploited an appealing business model.
Industry Attractiveness
Every carmaker in the world and every company interested in electric
motors is entering the business, including Dyson, at one point in time.
Why?
Entry Barriers are low.
● In conclusion, the case study emphasizes the evolving nature of strategic management in today's volatile business
landscape. CEO face unprecedented challenges in crafting strategies that create and capture value while adapting to
rapidly changing environments. The study highlights the importance of a holistic approach to strategy, encompassing
not only value creation and capture but also ongoing adaptation and capability building.
● The mistakes made by established companies and entrepreneurs underscore the need for a balanced strategy that
considers not only how to capture value but also how to continually innovate and respond to competition. By
integrating all elements of the strategy landscape, including identifying opportunities, defining business models,
capturing value, realizing value over time, and building foundational capabilities, companies can increase their
chances of long-term success.
● Ultimately, strategic adaptation must become an ongoing, iterative process of hypothesis, experimentation, learning,
and action. CEO must champion experimentation within clear boundaries while ensuring alignment with broader
strategic initiatives. By managing the complete strategy landscape, companies can navigate uncertainty, seize
opportunities, and ensure sustained relevance and success in today's dynamic business environment.