delta model: chapter2
TRANSCRIPT
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ADVANCED STRATEGY MANAGEMENT
Mr. Akhavan Alavi(Professor at University of Tehran)
Javad Sha’bani
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DELTA MODELCHAPTER 2: CREATING NEW SOURCESOF GROWTH AND PROFITABILITY IN A NETWORKED ECONOMY
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LAST CHAPTER IN BRIEF
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ARNOLDO C. HAX
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The Haxioms
1. The centre of strategy is the customer.2. You don’t win by beating the competition; you win by achieving
customer bonding.3. Strategy is not war; it is love.4. A product-centric mentality is constraining; open your mindset to include the customers, the suppliers, and the complementors as your key constituencies.5. Try to understand your customer deeply. Strategy is done one
customer at a time.6. Commodities only exist in the minds of the inept.7. The foundations of strategy are two: • Customer Segmentation and Customer Value Proposition • The Firm as a Bundle of Competencies 8. Reject the two truisms: • “The customer is always right,”and • “I know the customer needs and how to satisfy them.”
9. The strategic planning process is a dialog among the key executives of the firm – seeking consensus on the direction of the organization.10. Metrics are essential; experimentation is crucial.
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CHAPTER 2CREATING NEW SOURCES OF GROWTH AND PROFITABILITY IN A NETWORKED ECONOMY
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HOW TO ACHIEVE CUSTOMER BONDING: THE THREE MAJOR STRATEGIC OPTIONS IN THE DELTA MODEL
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BEST PRODUCT
MICHAEL E. PORTER
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BEST PRODUCT
MICHAEL PORTER'S THREE GENERIC STRATEGIES
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ATTENTION
-Product Economics
-The Value Chain
-The Abilities to Develop
the Capacities
Major Strategic Driving Forces
-The Development of an Efficient Supply Chain
-A Proven Internal Capability for New Product Development
-The Securing
of Distribution
Channels
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PRICE WAR
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فهــزمـوهــم بـإذن الـلـه وقـتل داوود جـــالـوت وآتـاه الـلـه املـلك
ا يـشاء ولـوال دفـع الـلـه الـناس بـعضهم والـحكمة وعـلمه مـم
بـــــــبعض لفســـــــــدت األرض ولــــــــكن الـــــــلـه ذو فـــــــضل عـــــــلى
العاملني.
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Strategic Positions of the Best Product Option
LOW COST(COST LEADERSHIP)
EVERYTHING BEING EQUAL
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EXCEPTIONS:
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EXCEPTIONS:
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DIFFERENTIATION
Strategic Positions of the Best Product Option
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MICHAEL PORTER'S THREE GENERIC STRATEGIES
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FOCUSStrategic Positions of the Best Product Option
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BEST PRODUCT
A LIMITED OPTION
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Towards a Stronger Bonding with the Customer
Ability to Develop, Make,
and Deliver a Stream
of Innovative Products
An Efficient
Cost
Infrastructure
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HOW TO ACHIEVE CUSTOMER BONDING: THE THREE MAJOR STRATEGIC OPTIONS IN THE DELTA MODEL
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Total Customer Solution
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Total Customer Solution
CUSTOMER ECONOMICS
PRODUCT ECONOMICS
PRODUCT MARKET SHARE
CUSTOMER MARKET SHARE
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FIRST POINT
SEGMENTATION
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CUSTOMER BONDING‣ Enhancing Customer’s Cost
Position
‣ Enhancing Customer’s Revenue Position
‣ Enhancing Customer’s Profit Position
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Total Customer Solution
Total Customer Solution
CUSTOMER INTEGRATION
REDEFINING THE CUSTOMER EXPERIENCE
HORIZONTAL BREADTH
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STRATEGIC POSITIONS OF THE TOTAL CUSTOMER SOLUTION OPTION
REDEFINING THE CUSTOMER EXPERIENCE
“Study your competitors not to imitate them.”
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CASE STUDY
GOLRANG
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MANAGERS NEGOTIATION
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STRATEGIC POSITIONS OF THE TOTAL CUSTOMER SOLUTION OPTION
SATISFACTION GUARANTEED OR YOUR MONEY BACK, NO QUESTION ASKED
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CUSTOMER INTEGRATION
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HORIZONTAL BREADTH
STRATEGIC POSITIONS OF THE TOTAL CUSTOMER SOLUTION OPTION
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SUPPLIERS
STRATEGIC POSITIONS OF THE TOTAL CUSTOMER SOLUTION OPTION
COMPANY
COMPLEMENTORS
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STRATEGIC POSITIONS OF THE TOTAL CUSTOMER SOLUTION OPTION
TOWARD A CUSTOMER LOCK-IN
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TOWARD A CUSTOMER LOCK-IN
STRATEGIC POSITIONS OF THE TOTAL CUSTOMER SOLUTION OPTION
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HOW TO ACHIEVE CUSTOMER BONDING: THE THREE MAJOR STRATEGIC OPTIONS IN THE DELTA MODEL
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SYSTEM LOCK-IN
THE HAXIOMS
4. A PRODUCT-CENTRIC MENTALITY IS CONSTRAINING; OPEN YOUR MINDSET TO INCLUDE THE CUSTOMERS, THE SUPPLIERS, AND THE
COMPLEMENTORS AS YOUR KEY CONSTITUENCIES.
EXTENDED ENTERPRISETHE
ENTIRE SYSTEM OF COMPANIES
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80% Market Share
Among Complementors
90% Market Share
In Its Industry
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THREE WAYS TO GET SYSTEM LOCK-IN
PROPRIETARY STANDARDS ▸ The highest margins
▸ The greatest market share
▸ The most enduring sustainability
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PROPRIETARY STANDARDS
EXAMPLE
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PROPRIETARY STANDARDS
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DOMINANT EXCHANGE
THREE WAYS TO GET SYSTEM LOCK-IN
PIERRE OMIDYAR
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THREE WAYS TO GET SYSTEM LOCK-IN
85% Market Share
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THREE WAYS TO GET SYSTEM LOCK-IN
THE SOURCE OF PROFITS FOR THE YELLOW PAGES
THE GENERAL AND
ADMINISTRATIVE EXPENSE
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RESTRICTED ACCESS
THREE WAYS TO GET SYSTEM LOCK-IN
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SAM WALTON
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WALMART
“A FULL LINE DISCOUNT STORE NEEDS A POPULATION BASE OF AT LEAST 100,000”
BUT HOW IT COULD BE POSSIBLE IN RURAL AREA?
‣ Economic store places
‣ Integrated network
‣ Bargaining power
‣ Coordination between branches
‣ Many choices
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SYSTEM LOCK-IN: A HIGHLY DESIRABLE STRATEGIC OPTION
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OFTEN IT IS NOT AVAILABLE AS A FEASIBLE WAY OF DEVELOPING A STRATEGY
SYSTEM LOCK-IN: A HIGHLY DESIRABLE STRATEGIC OPTION
‣ Not very many industries allow for standards to be developed, and if they are, for those to be appropriated by a single player.
‣ Few industries permit the consolidation of a single Dominant Exchange in the hands of one player.
‣ Restricted Access is even more carefully guarded, because its consolidation raises regulatory concerns.
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SYSTEM LOCK-IN CARRIES AN ETHICAL RESPONSIBILITY
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THE VARIOUS DIMENSIONS OF THE TRIANGLE: A SUMMARY
BEST PRODUCT
BENCHMARKING
BUSINESS RE-ENGINEERING
TOTAL QUALITY MANAGEMENT
TIME-BASED COMPETITION
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PROFILING THE THREE STRATEGIC OPTIONS OF THE TRIANGLE
TOTALLY DIVORCED FROM A
NETWORK-BASED ECONOMY
ENABLED BY
THE NETWORK-BASED
ECONOMY
THIS STRATEGY IS CENTERED ON THE SYSTEM, PARTICULARLY THE
COMPLEMENTORS.
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THANKS FOR YOUR ATTENTION