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Abstract Given the intensely competitive nature of today's economy, the greatest rewards often come from breaking new ground - creating a brand-new product or breaking the rules in an existing market. However attempting to compete in unfamiliar territory carries a significant degree of risk. Because the timehonored tools of strategy development may not suffice for fundamentally new markets, the management team will be forced to make more than the usual number of decisions based on assumptions and beliefs rather than facts and experience. This article presents a strategic frame that brings all the key issues to the table and applies boundaries to the strategic conversation, ensuring that, when a strategy is selected, the team will be aligned and the company can stick with the strategy - and reap the rewards.
Keywords Strategic planning, Decision making, Strategy, Market entry
Why is it that every few years a new guru bursts on to the scene with the "definitive" view on strategy? If their theories are definitive, why are they so easily replaced?
Why is it that by the time you've balanced all the key dimensions of your strategy, you feel like you've settled on the lowest common denominator? Is that any way to become a market leader?
And why does the strategic planning process have to be so complex and repetitive? Isn't it really as simple as determining why your customers should give you their money?
This type of frustration comes up time and again when chief executives talk to us about their strategy efforts. Many have even confided to us that their team's strategy efforts rarely lead to sustainable results. Here's what happened at two companies we know.
THE PROBLEM
Senior managers at a consulting firm spent 12 months designing a powerful new service. It was an instant hit with customers and the media - also with the firm's competitors, who immediately copied it. Two years later, the firm was forced to cede a multi-billion-dollar market to those competitors.
The problem? The management team didn't focus its strategic thinking on the firm's unique strengths. In fact, it turned out that other companies with more efficient operations and superior distribution channels were better positioned to seize the market that this firm had created.
And at a...