e Strategy(Final)

8/2/2019 e Strategy(Final)

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e-StrategyPure and Simple

http://e-strategy.ppt/



Table of Contents Chapter 1: The Ultimate Enigma Chapter 2: Strategic Fuzziness Chapter 3: Strategic Fuzziness II

Chapter 4: A CEO's Worst Nightmare: Killer.Com Chapter 5: Back in the Future Chapter 6: The First Imperative: Clarifying the

Business Strategy Chapter 7: Demystifying the E-Nigma Chapter 8: The Critical Gap: No e-Strategy Architect Chapter 9: Constructing the e-Strategy Blueprint: Chapter 10: Third Imperative: Integrating the

Business Strategy and Internet Processes

Chapter 11: The Tangible and Intangible Results





































Chapter 1:The Ultimate Enigma




Chapter 1: The Ultimate E-NigmaThe Internet:

“They can’t see it, they can’t touch it, andthey have no experience with it oranything like it. As a result, mostexecutives have great difficulty

assessing the impact the Internet willhave on their businesses.”




The New Economy 1999: 50% of capital investments made

for IT

10% - 15% increase project per year

“wired” economy

Internet: cause increasing dependencyon IT




The New Economy

0

2040

60

80

100120

140

160

1994 1996 1998 2000

web usersworldwide (inmillions)





The New EconomyNew TechnologyAdoption Trends

0 10 20 30 40

Telephone

Cable TV

Fax

Cellphone

VCR

PC

WWW

YearstoReach10Millio




Lessons From the Past 1885 – 1886:

Introduction of the

first automobile Resulted in advent

of concepts: carinsurance, parking

lots, drive-inrestaurants, etc.

2000: The Internet




From Landscape to Seascape Business Model –

profiles of products,

customers, andmarkets; marketforces present inbusiness arena

Analogy: moderncity sprouting on alandscape




The Traditional Business Model

Under Siege buildings are connected

by uncluttered andunrestricted flat, opensurface water system.

“Each building could bereached from any otherbuilding at any time of

the day, over water.”




A Dramatic Change in the

Rules of Play Traditional value chain has been

disrupted

Assets may now be liabilities Brand loyalty no longer an advantage

Service may no longer be a

differentiator A captive market has been unshackled

and given numerous options




A Dramatic Change in the

Rules of Play Customer’s switching costs reduced

significantly

Information in virtually “free” – makingcustomers more knowledgeable

Pricing matches minute-to-minute

market conditions

On-line demand drives production




Denial or Paranoia Denial – “ostrich reaction”; avoiding the

Internet and hoping that it will pass like

many fads. Paranoia – tends to drive a person to do

everything and anything he can think

of.




The Internet Migration is

Inescapable Paranoia is not the solution.

Understanding the capabilities of theInternet

Need to understand first the businessstrategy of the enterprise – then,

determine the role the Internet shouldplay.




Chapter 2:Strategic Fuzziness




Chapter 2: Strategic Fuzziness

Strategy should be clear and explicit

Problems:

- most strategies are implicit; onlytop mgt. understands

- difference between strategy and

operations- strategic thinking vs. operations

thinking




Strategy vs. Operations

Strategy: What? Answers what wewant to be.

Operations: How? Answers how to getthere.





Clear

StrategyOperationally

Competent

ClearStrategy

OperationallyIncompetent

Fuzzy

StrategyOperationally

Competent

FuzzyStrategy

OperationallyIncompetent

A

DC

B

(+) STRATEGY (-)

O

P

E

R

A

T

I

O

N

S

(+)

(-)





A: Well-articulated strategy; wellcommunicated; well understood by everyonein the organization

B: Operationally effective but strategicallydeficient

C: Clear strategy but unable to execute well

operationally D: Operationally ineffective but strategically

deficient




Survey: Strategic Quotient of Your Organization

Take the survey on page 13.

Score: 100

You’re perfect. There is no need for youto read the remainder of the book unless you don’t know why you are sogood.




Survey: Strategic Quotient of Your Organization

Score: 70-99

There is some degree of ambiguity over

strategy among the management team,with periodic disagreements overdirection, particularly in regard to

significant issues.






Amplification of the Fuzziness

“And then alongcomes the

Internet! Is yourstrategy Internet-ready, or will you

suffer fromstrategic fuzzinessto secondpower?”




Chapter 3:Strategic Fuzziness II




Stream of Changes

May have a great impacton the enterprise’s

structure or genetic code(e.g. Internet).

The need to re-conceptualize businessmodels for such changes.




The Internet: Big Changes

As a widely-used means of communication,this will certainly affect each product,

consumer, wherever, whenever. Its impact is said to be as great as the

evolution of electricity and steam power

during the past 2 centuries.




Internet: Big Changes

In time, the Internet will be callingthe shots of how businesses are

managed. This takeover may eitherbe a THREAT, OPPORTUNITY, VULNERABILITY or CRITICALISSUE to concerned entities.

The question now is HOW and notwhether or not to go with the flowof changes.




Problem for “illiterate” CEO’s

The Internet is an ENIGMA

cannot be fully understood

No history books, experts or proven models

Because of this, no absolute knowledgeabout the Internet can be attained. It is much like an artificial god.




Internet as “change inprogress”

Intangible, moving target, everydayevolution, beta mode.

Leaves CEO no choice but tosynchronize the business with the

Internet. There’s nowhere else to go!

http://www.gifart.com/cgi-bin/affiliate/clickthru.cgi/freddyv




Internet: In a Nutshell

Simply a very powerful force no one cancounter, yet becomes stronger and

stronger each second A technological paradox: Man-made but

already seems to be superior tohumankind

“COMPLY OR BE VICTIMIZED!”




Where Is the Business in?

The following quadrants can tell whether ornot the business is at risk with respect to

the continuous development of theInternet:




Business-Internet Matrix

Clear

Business strategy

Clear

Internet Strategy

Fuzzy

business strategy

Clear

Internet Strategy

ClearBusiness Strategy

Fuzzy

Internet Strategy

FuzzyBusiness Strategy

Fuzzy InternetStrategy

Business

Clear Fuzzy

Clear

Fuzzy

STRATEGIC FUZZINESS2




Internet Strategy Quotient

Used to determine where your companyfalls in the matrix in the previous slide

1. Do you have an overarching business strategy that guidesmanagement decision? Yes(10) No(0)

2. Do you have an Internet strategy that is fully integrated and

supports your business strategy? Yes(10) No(0)

3. Do you have an overall “blueprint,” design by your own people, which will determine where and how the Internetcan best be applied in your organization?

Yes(10) No(0)





4. Is your internet strategy seamless across all the functions of thebusiness?Totally(10) Partially(5) No linkage(0)

5. Is management on a “crusade,” actively promoting yourInternet strategy? Yes(10) Sometimes(5) No(0)

6. Do all the employees understand the Internet strategy and

their role in it? All do(10) Some do(5) None do(0)

7.Are all your key suppliers tied into your internet strategy? All are(10) Some are(5) None are(0)

















8. Are all your key customers tied into your internet strategy? All are(10) Some are(5) None are(0)

9. Which stage are you in with regard to the Internet?Fully operational, transactional capability (10)Some on-line, off-the-shelf transactions (6)Nonfunctional Web pages (2)No capability (0)

10. Are your Internet capabilities fully integrated with yourtraditional IT system?

Fully(10) Partially(5) None are(0)

Total Score: ________
















Interpretation of Scores

Score: 75-100

You are in forefront of management thinking and

technological leadership 2concerns;

Since there are no models yet, will ours work?

Will competitors try to learn from us and try to duplicate andimprove our system?

To benefit from “pioneering” efforts, ensure that The implementation plan has been screened for potential

problems and actions

Learn as you implement each piece and reintroduce what you

learn into the system to widen advantage




Score: 50-75

Have recognized the advent of internet and how

pervasive it will become throughout societ

Have recognized the impact of internet to business

Have decided to exploit its use but not under theumbrella of a coherent corporate Internet strategy






Score: 50-75 …continued

Programs are instituted on a piecemeal basis

A lot of trial and error therefore and several unpleasant

surprises

Piecemeal approach evolves into incompatible IT systemsw/c increases cost for “retrofitting”

The sooner you develop a coherent, integratedinternet strategy that fully supports the corporatestrategy, the better off you will be.





Score: 25-50 Recognized the significance of internet together

with the corresponding threats and opportunities

But have been reluctant to act on it Because some roles in the business model are negatively

altered

You are agonizing over the consequences of the alteredbusiness model

This can paralyze decision-making Remember: “the internet is here to stay and if you

don’t figure out how to exploit it, it will exploityou”





Score: 0-25

You know that the internet will hit your business

someday but hopes that it will be far off fromtoday

But you are pre-occupied with everydayoperational issues

Probably because corporate strategy is not working

It may be time to rethink, or maybe too late




Interpretation of the Matrix

Fuzzy Business Strategy, Fuzzy InternetStrategy

Fuzziness to the second power Amplified ambiguity over direction

Confuses the employees

Breeds decisions that will cause the organization

to meander all over the map Needs both business strategy and e-strategy

processes





Fuzzy Business Strategy, Clear InternetStrategy

Almost impossible position to be in Inconceivable that one can develop a coherent

Internet strategy without a clear business strategyto begin with





Clear Business Strategy, Fuzzy InternetStrategy

Experts say: the stronger party eventually inherits the other party’s

weakness

Both parties are brought down to the lowest commondenominator

To avoid this, you need a catalyst like E-strategy





Clear Business Strategy, Clear InternetStrategy

Best situation to be in Need to clarify the business strategy of the

enterprise first before anything else

Where you placed the the company on the grid

indicates whether you should jump to Internet-related programs

Without clear internet strategy

Or worse, without clear business strategy




Chapter 4: A CEO’s Worst

Nightmare: Killer.Com




Intriguing Phenomenon

Why is it that the business models of dominant enterprises led by astute

CEOs can be put in jeopardy overnight? What can be done to mitigate or even

reverse the impact?




Intriguing Phenomenon•New economy becomes more andmore dependent on information

•Internet becomes theprimary transporter ofinformation

•And becomes a threat

•Companies threatened arethose with information-based products/services




Traditional Value Added

•Added value is almost totally dependent onthe quality of advices transmitted by aperson

Banking




Traditional Value Added

•Add value by adding more and morephysical features

Manufacturers (of “hard goods”)




Traditional Added Value

•New economy’s value

chain can be fully

integrated into theInternet

•Sales and marketingpart: most likely to be

attacked bykiller.coms




Amazon.com

Information is utilized andkept into databases

Used E-mail for one-to-oneselling

Adds value by supplyinginformation (that others

can’t provide)




The Concept of Added Value

2 reasons why transactionshave come down to the

lowest price:1. The customer does not

see value.

2. The customer does notunderstand the addedvalue.





2 Means to add value:1. Build features into the

product that distinguishes itfrom your competitors’.

2. Make information available tocustomers to enhance their

ability of making betterdecisions while conductingbusiness.





Added Value Equation

Added Value = product features x

information enrichment





Few know how

information canadd value for theircustomers

+





Few understand the flow of information through theorganization and how that information could be made

available to customers in ways that would add value andenhance customer relationships





To overcome thisdifficulty, one must

understand the flow patterns which routeinformation through thebusiness model together

with the interconnectivityof those patterns





Capabilities of the Internet that generate value-adding applications:

Added Value primary features of product/service

Added Value information enrichment for user

Added Value primary features x information

enrichment → premium prices




3 Options to Avoid the Killer.Com Disruption

1st Option

Do nothing and Wait React





Outsource solution to a consulting firm

2nd Option





Develop your own Killer.Com model

3rd Option





The third option is the best, but it requirestwo elements:

An understanding of the Internet A structured process that works

Any strategy must be oriented towards thefuture

One must determine how the environmentwill look like a few years from now.




Chapter 5:Back to the Future

R l f th CEO ith d t




Role of the CEO with regard toBusiness Strategy:

Envisions what theorganization will be

in the future Deploys the

resources of theorganization to

make that visionmaterialize overtime




A Good Business Strategy

A good strategy should:

Work to the benefit of the organization

over a long period of time Be able to deal effectively with the future

changes




A Good Business Strategy

Question to beanswered by the CEO

and managementteam: If strategy is about envisioning

the organization in the future,why were the CEOs and senior

executives of thousands of corporations around the worldcaught by surprise by theadvent of the Internet?

Two Ways to Deal with




Two Ways to Deal withChanges

CEOs and other executives claim that:

Change happens too quickly to be anticipated

Two ways to deal with changes: Proactively

Anticipatory in nature

Reactively

Corrective in nature

Most executives deal with most changes in areactive mode




Stuck in the Current Sandbox

major contributor to the inability of executives to anticipate changes thatwill affect their business

consumed by what is going on with: current products

current customers

current markets

current competitors




Stuck in the Current Sandbox

A more important responsibility is to bemore concerned about the company’s:

future products future customers

future markets

future competitors

How to Envision the Future




How to Envision the FutureBusiness Arena

The business arena is not one with alimitless number of variables.

First objection to envisioning

the future: The future is a big place

12 Discrete components that




12 Discrete components thatdelimit the business arena:

Economic environment

Governmental, political,

and regulatoryenvironment

Social and demographicenvironment

Market conditions

Customer attributes andcharacteristics

12 Discrete components




12 Discrete components(cont’d)

Competitor profiles

Technology evolution

Processing and manufacturing

capabilities

Product design, features, andcontent

Sales and marketing methods

Distribution, delivery, andservice methods

Human, natural, and financialresources




Time Machine

Place yourself in a “Time machine”

Move yourself ahead 3 – 5 years anddescribe the characteristics each of the 12components will have at that point in time




Time Machine

Describe each of the “parcels” in thesandbox with or without your company’sparticipation

It is a description of the future businessarena you want to draw a picture of, not a

description of your company.




Time Machine

Questions that can achieve a description of the future business arena:

What will the economic environment in ourbusiness arena look like in three to five years?

What will the governmental, political, andregulatory environment in our business arena look like in three to five years?

What will the social and demographic environmentin our business arena look like in three to fiveyears?




Time Machine

Questions…(cont’d) What will the market conditions in our business

arena look like in three to five years?

What will the customers in our business arenalook like in three to five years? What will the competitors in our business arena

look like in three to five years? What will the technology in our business arena

look like in three to five years? What will processing and manufacturing

capabilities in our business arena look like in threeto five years?




Time Machine

Questions… (cont’d) What designs, features, and content will products

in our business arena have in three to five years?

What will the sales and marketing methods, andservice in our business arena be in three to fiveyears?

What will be the distribution, delivery methods in

our business arena be in three to five years? What will the resources (human, natural, and

financial) in our business arena look like in threeto five years?

How to Envision the Future




How to Envision the FutureBusiness Arena

Second objection toenvisioning the future:

One needs a crystal ballto see the future.

But, most changesannounce themselves

well in advance of thetime when they willstrike.

The Myth of Rapid




The Myth of RapidTechnological Changes

MYTH:

Change happens faster thanmanagers can deal with

Technological change

Takes 25 to 30 years to finda commercially viable

application Takes another 50 to 70

years to infiltrate thesociety that it willeventually affect.




A Few Examples

Invention of electricity

Invented in 1860s

Found a few successful applications in the1870s and 1880s

Street lighting, electric tramways, and thetelephone were developed only after twoor three more decades




A Few Examples

Robotics, lasers, fiber optics Technologies invented in the 1950s Commercially viable only 50 years after

Microprocessor Invented in the 1960s Gave birth to the personal computer in 1970s

Internet Invented in 1968 as a backup mechanism for branches of

the military to communicate Migrated its way to applications in universities and research

institutions in 1980s Affected industrial companies in the 1990s




The Three Faces of Change

Micro

Changes that occurat ground level

Have limited rangeand impact

Have an impact on:

A limited number of

products

A limited number of customers

And a limited numberof markets





Macro Changes that can be

seen “from an airplane at

30,000 feet” Affect a substantially

larger piece of real estate

Affect A large number of

products

A large number of customers

And a large number of markets





Mega Changes that can be seen “from a satellite circling

the globe”, and offering atotal view of the planet

Affect Every product

Every customer

Every market

Example: steam power,electricity, internet

The Impact of Unnoticed




The Impact of UnnoticedMacro Changes

Shift from a Push to a Pull Economy

Push economy (mid-1940s – late 1960s)

Demand > Supply Producer reigns

Pull economy (began in the early 1970s)

Advent of Japanese, Taiwanese and European

manufacturers led to more supply thandemand

Customer is king






Fall of the BerlinWall

Over 220 millionpeople starving for

American products

Market for “western-type” products will

be as large as theWestern Europeanmarket today.






Opening of China

Over 1.5 billion peopleadded to market of

Western goods

A population twice thesize of those of theU.S., Japan and

Western Europe puttogether will beclamoring for “western-type” products






The Demographic Dichotomy

In the period 2010-2015

almost half the population of the U.S. will beover 50 years old

The rest of the world (Mexico, most of South America, most of Asia) will have 50 percent of

their populations under the age of 25.






Spread of Democracy and Capitalism inLatin America

Another 200 million people will be broughtinto the western economy

Fusion of Computer andTelecommunications Technologies This will accelerate and have an impact on

an increasing number of products,customers and markets.




Mega Changes

Two mega changesthat occurred in thelast 20 years:

Internet

Biotech




Mega Changes

CEO’s first priority:

Formulate, articulate andcommunicate the

business strategy This strategy must

allow the company toaccommodate mostchanges, including theinternet.

Strategic thinking

Skill required to help aCEO formulate a winning

business strategy




Chapter 6:The First Imperative: Clarifyingthe Business Strategy

Problem with the word




Problem with the wordStrategy

“strategy” has different

meanings

Example1: strategy as the

“objective” and tactics as the “means”

Example2: objective as the “goal” and the strategy as the “means”

Example3: strategy is “long-term”

thinking whereas tactics is “short-term” thinking

Problem with the word




Problem with the wordStrategy

Most books writtenabout strategy werewritten by academicpeople who almostnever spoke orworked with the

companies theywrote about.




A Different Approach

Talking to real peoplewho run realorganizations

Talking to CEOs

Participating in themeetings of the CEOs withtheir people

The Cure for Strategic




The Cure for StrategicFuzziness2

FIRST: Make that strategy explicit

SECOND: Remove the ambiguityabout the future direction of acompany




Strategy Starts with a Vision

CEO’s “vision” whathe or she wants thecompany to look like atsome point in the future.

CEO employs & deploys the company

assets in pursuit of thatvision




Strategy Starts with a Vision

Strategic Thinking attempting to transform vision into a profile of

what they want the company to look like at some

point in the future. Similar to a picture painting

The VISION Target of all decisions andplans

Strategy will help a company’s people makeintelligent and consistent decisions over time .

The Strategic Profile of an




The Strategic Profile of anEnterprise

Four elements in acompany’s “profile”: The scope of its

products The scope of its

customers

The scope of its

industry segments The scope of its

geographic markets





The Strategic Profile of anEnterprise

Inputs to the company’sprofile: Selling methods

Distribution channels Manufacturing processes

Outputs of the profile: Profit

Returns





e S a eg c o e o aEnterprise

CEO must determine inadvance: Which products, customers,

market segments andgeographic markets thecompany will pursue, and

MORE IMPORTANT, which

products, customers, marketsegments and geographicmarkets it will not pursue





gEnterprise

Two types of management decisions :

How it allocates resources

How it chooses opportunities

Driving force

Concept of strategy that determines the line of demarcation between items that should receive more emphasis and those which should receive

less

Identify the Driving Force of




y gthe Business

Management takes on an opportunitythrough a hierarchy of different filters

Ultimate filter was whether there was

a fit between the products, customers,and markets the opportunity broughtand one key component of the business If fit pursue

If not fit do not pursue The one key component differs from

one company to the next





y gthe Business

Company has one component as theredriving force

That component

dominate management’sthinking in allocating resources or choosingopportunities





y gthe Business

10 Basic components in any company:

Product or service

Customer or user class Market category

Technology or know-how

Production capability or capacity





y gthe Business

Sales or marketing method

Distribution method

Natural resources

Size or growth

Return or profit

All these are present in every business,

but only one is at the root of a company Knowing which one is vital to management’s

ability to make consistent decisions

The Concept of the Driving




p gForce

Product-Driven Strategy

It limits its business to a single product

Future products: modifications,extensions or adaptations of the current product

Example: Coca-Cola, Firestone and

other tires, Harley Davidson





p gForce

Customer or User Class-Driven Strategy It restricts its business to a

describable class of customeror end user.

Company looks to: Satisfy certain specific needs of

customers

Respond with a wide variety of genetically unrelated products

Example: Johnson & Johnson





p gForce

Market Category-Driven Strategy

A market-drivencompany :

Targets its strategy at aspecific market

Responds with a broad

array of products aimed atthat market

Example: AmericanHospital Supply





p gForce

Technology-Driven Strategy

Company must have a basic or distinctivetechnology expertise at the root of its

business They looks for potential applications of

that technology around which it designs itsproducts

Example: Dupont, 3M, Dow Corning





p gForce

Production Capability orCapacity-Driven Strategy A capacity-driven company

Has a substantial investment in its

production facility Has a strategy to fill the capacity to its

maximum

Example: paper mills, steel mills andrefineries

A production capability driven company Built into its production process, some

distinctive capabilities that allow it togive its products, features that othercompetitors have difficulty replicating

Example: specialty steel producers,specialty printers





p gForce

Sales or MarketingMethod-Driven Strategy A sales or marketing method-

driven company has a unique or

distinctive method of selling to orgetting orders from customers.

Products the customers buy mustbe sold through that method

All markets the company enters

must allow it to utilize thatmethod

Example: Mary Kay, Avon,Tupperware





p gForce

Distribution Method-DrivenStrategy

A company distribution method-

driven has a unique or distinctive method of moving things ormatter from one place to another

All opportunities this company

pursues must utilize thatdistribution system

Example: FedEx, Wal-Mart,telephone and railroad companies





Force

Natural Resources-Driven Strategy

The pursuit of and access to

natural resources determinehow a company allocates itscapital and what opportunitiesit chooses

Examples: major oilcompanies (Exxon, Shell),mining companies (Newmont,Broken Hill Properties)





Force

Size or Growth or Return or Profit-Driven Strategy

Financial conglomerates use these twostrategies

Examples: GE, Allied-Signal, Danaher




Strategic Questions

Thinking about these questionsdetermines whether a strategy is clearor fuzzy: Which of the driving forces described is the

current heartbeat of your business and theroot of your strategy?

Which driving force would each of yoursubordinates say is at the root of yourstrategy and a filter for your decisions?




Strategic Questions

Different people have different

perceptions about which component isthe driving force of a strategy.

This results in decisions that cause acompany to zigzag its way forward.




Strategic Questions

Once there is agreement about the currentdriving force, another set of questions needsto be asked: Which component should drive the strategy in the future?

Should we continue to be driven as we have been or shouldwe be exploring another driving force?

If we explore another driving force, which one should it be?

What implications will that driving force have on theproducts, customers, and markets we pursue and the ones

we don’t? What will the company look like if we change to a different

driving force?

Formulating a Strategy around the




g gyDriving Force of the Enterprise

Synonymous:

Strategy

mission,

Charter

Mandate

Business purpose

Business statement Strategy is at the root of every corporation’s

business






“Every enterprise needs a concept of itsindustry. There is a logical way of doing

business in accordance with the facts andcircumstances of an industry, if you canfigure it out. If there are different conceptsamong the enterprises involved, these

concepts are likely to express competitiveforces in their most vigorous and mostdecisive forms.” –- Alfred Sloan, GM






“Every organization, whether a business or not, has atheory of the business. Indeed, a valid theory that isclear, consistent, and focused is extraordinarily

powerful. These are the assumptions that shape anyorganization’s behavior, dictate its decisions aboutwhat to do and what not to do, and define what theorganization considers meaningful results. Theseassumptions are about markets. They are about

identifying customers and competitors, their values,and the company’s strengths and weaknesses. Theseassumptions are about what a company gets paidfor. They are what I call a company’s theory of the business .” – Peter Drucker






A good strategy statement

Should not be longer than a paragraph or

two. Every word, modifier and qualifier must be

carefully thought through

The ability of people to execute a CEO’sstrategy is inversely proportionate tothe length of the strategy statement.

How to Construct a Meaningful




Strategy Statement

A strategy statement must contain:

First sentence Describes the driving force of the organization

Isolates the specific component of the businessthat gives the company a strategic and

distinctive advantage over competitors





Strategy Statement

Second part

Must contain words – nouns, adjectives,

qualifiers and modifiers that delineate the linebetween the “nature” of the products,customers market segments and geographicmarkets to which the driving force lends itself

and nature to which it does not





Strategy Statement

Strategic statement should have a “tone” of growth

Every business must grow in order to

perpetuate itself

It must have a tone of success

It must reflect future intent and presentcondition

It should give a feel of what the future will be

Examples of Strategy Statements




Capability-driven company

Our strategy is to leverage our cutting-edge,

integrated specialty textile manufacturing capability to exploit interior service applications forwhich we can develop customized, differentiatedproducts. We will target andstrive to dominate market niches that offer above-average margins/profit.

We will seek geographic markets with highgrowth potential where our superior sales,

distribution, and service skills bring an additionalcompetitive advantage.

Turning the Strategy Statement




into a Strategic Filter

Another strategy statement:

Our strategy is to leverage our

multipurpose, continuous process capabilityto combine metals and polymers to produce

and market multi-layered structures.We will proactively seek out

applications where we can respond withdifferentiated products that add value, aretailored to the specific needs of customersand end users, and bring cost, performance,

and/or quality competitive advantages.We will concentrate in growth-

oriented industry segments in which we canbe leader and in geographic markets wherethere are multiple applications available tous.





into a Strategic Filter

Although the strategystatement sounds technical,

it can transformed into a avery effective and simplebinary filter to screenopportunities that come tothe business

Use of the Strategic Filter






g gyinto a Strategic Filter

Does the opportunity Yes NoLeverage and/or enhance our multipurposecontinuous process capability to combine metalsand polymers?

Produce multilayered structures?

Provide an ability to respond with differentiatedproducts that add value?

Provide products tailored to the specific needs of

customers?

Bring cost advantages? Quality advantages?Performance advantages?

Target growth-oriented industry sector?




















g gyinto a Strategic Filter

Does the opportunity Yes No

Bring geographic markets with multipleapplications?

Allow us to be a leader?

The Concept of Areas of











Excellence

Areas of Excellence – strategiccapabilities an organizationdeliberately nurtures to a higher

level of proficiency than any competitor can

Areas of Excellence change fromone driving force to another

Product-driven productdevelopment and sales/service

Class-driven cutomer researchand customer loyalty

Capacity-driven efficiency andsubstitute marketing



































Excellence (Strategic Skill)

Product Concept

Market Class

Technology

Production

Product Development

Sales/Service

Market Research

Customer Loyalty

Research

Application Marketing

Manufacturing

Efficiency

Substitute Marketing
































Excellence (Strategic Skill)

Sales/Marketing

Distribution

Natural Resource

Size/Growth

Sales Recruitment

Selling Effectiveness

System Effectiveness

System Organization

Exploration

Converting

Volume Maximization

Asset Management

Return/Profit Portfolio Management

Information Systems

Manage Your Competitor’s




































Strategy to Your Advantage

Concepts of Driving Force and Areas of Excellence can beapplied to uncover the

strategies of competitors Different competitors may

have different driving forces & behave differently in similarcircumstances

Example: GM and Honda areboth in automobile industry. ButGM has a product-driven strategy , while Honda has atechnology-driven strategy .

Ch th R l f th Pl

























Change the Rules of the Play

Never play the game the way your competitorplays the game

Xerox and Canon: Instead of selling direct, Canon went

through distributors, instead of leasing a machine, Canonsold it outright. Xerox lost 86 market share points.

Id tif th C iti l I













Identify the Critical Issues

Critical Issues need tobe managed and

resolved to make thestrategy work

Case example:Interview with PhilipKantz

Case Example: From File FoldersDi i l Fil T f
















to Digital File Transfer

Development of a business strategy for TABProducts Co., Inc

TAB is in the business of managingdocuments and making information accesiblequickly on paper, electronically

Phil Kantz became CEO of TAB in 1997 and

envisioned a different future for TAB

Case Example: From File Folderst Di it l Fil T f


















For more than 50 years, TAB was thepremium provider of its products todocument-intensive industries

However, Phil Kantz identifies 3 internalissues which necessitated some changes

Company is 50 years old and has a well-known brandname

Business is not growing

No strategy!























Phil Kantz implemented a strategic thinkingprocess

2 things to consider: Objective of the strategic thinking process is to bring

disparate groups together without any bias orcategorization

Focus on execution – the driving force develops newbusiness concepts, business concepts and driving forcedevelop strategic capabilities
























By using the strategic thinking process, thecompany can identify strategic capabilitiesimportant to the business

There was a unanimous agreement amongindividual work groups – i.e. TAB should notbe product-driven but the driving force should

be document-management know-how “ It was developed by us.”


























Delivering over the Internet: due to thenature of TAB’s business, the internet will bean important part of the company’s future

Goal: to consider and plan for the Internet’simpact on the business and the driving force

Understand what was going “out there”

Major obstacle: varying levels of understanding of the Internet























By bringing the entireexecutive team up to thesame level of awareness aboutthe Internet, they can nowidentify crucial components of the company’s future with the

Internet

















3 Key Decisions: Sell old filed services business that do not fit into the

new business strategy

Recognize the importance of electronic imaging output Create alliance with a software developer Liberty

Software

In the end, TAB created more focus to the

transformation strategy TAB is serious in using emerging

technologies!

























Killer.com Analysis

Great way of engagingpeople to think outsidethe day-to-dayoperations and actually

think about thecompetitive risks thatcould face us in thefuture
















Chapter 7:Demystifying The E-Nigma

The E Nablers







The E-Nablers

The internet e-nigma can bedemystified only if one understands theInternet’s capabilities and can rationally

identify where and when the Internetwill affect one’s business model.

Internet’s 12 Basic Capabilitiesor E nablers















or E-nablers

Aggregation

Build to order

Customer self-service

Producer direct

Channel integration

Syndication

Marketableknowledge

Producer rebundling

Market exchanges

Dynamic pricing

Portals

One-to-onemarketing

Aggregation


































Aggregation

Ability to recruit large groups of buyers and/or sellers in order toobtain better costs or prices

Demand aggregation

Supply aggregation

Build To Order














Build To Order

Allows customers to place an order for aproduct configured to each customer’sspecific requirements.

Ex: Dell, Homegrocer.com

Customer Self Service












Customer Self-Service

Ex: FedEx discovered that instead of going through a dispatcher, thecustomer could be given direct access toits fleet of trucks and locate the truck

closest to the supplier’s facility andcontract with the truck operator directly,bypassing the dispatcher altogether.

customer

Producer Direct















Producer Direct

The Internet provides a producer or amanufacturer of a product or service, theopportunity to sell directly to the end userbypassing the traditional methods of sellingand distributing through third-party agents,reps, or distributors.

Channel Integration













Channel Integration

Unlike the previous e-nabler, this one attemptsto integrate existing channels with the Internetto crate a coherent sales and distribution system

that gives a company an additional competitiveadvantage.

Ex: Home Depot and Gap

Syndication














Syndication

This enables the company tosell products or services tocustomers who then

“package” them with otherproducts that have been “syndicated” from othersuppliers who, in turn resellor deliver the “package” to a

third party.

Three players

Originator

Syndicator

Distributor

Marketable Knowledge
























Marketable Knowledge

Internet enables a company to turn idle knowledgeinto a valuable asset by digitizing it and making itavailable on the Web.

Bank of experiential data could be packaged in avariety of different forms and sold on the Internet tocreate brand-new revenue streams for anorganization

Ex: Cancer Treatment Center Centers of America (CTCA)

Product Rebundling

















Product Rebundling

Allows an entity to usethe Internet to bundleclosely related but

separate and differentproducts or services incombinations thatwould not be possible

on a stand-alonebasis. Ex: Cendant

Corporation

Market Exchanges



















Market Exchanges

Opposite of demand aggregation

Producers aggregate production volumes inan industry in order to let customers know

how much product is available and where.

In some industries, it allows interestedcustomers to bid on the inventory that is

available. Ex: plasticsnet.com, metalsite.com

Dynamic Pricing


















Dynamic Pricing

Takes market exchanges a step farther

Products offered through this e-nabler

have dynamic or even volatile prices. Price varies with each transaction –

depends on the balance between

demand and supply Ex: Budget Rent-A-Car

Portals



















Portals

Web capability developedby an organization in whicha company offers its ownproducts as well as

products from competitorsso that they will beperceived as an “objective” party to the buying processand bring it a fair share of

the sales generated Ex: Progressive (insurance

company), Pulte Corporation

One-to-One Marketing




















One-to-One Marketing

The use of electronictechnology to enablecompanies toconstruct databases

that can storeenormous amounts of information that canbe used to zero in on

a prospect with aclearly defined profile,one-to-one.

A.k.a. Narrowcasting

Unleashing InternetInnovation






















Innovation

Company must think of ways so that these12 e-nablers can be exploited across thebusiness.

Issue: ensure that the use of these InternetE-nablers are in line with the businessstrategy of the enterprise.

Assessment: E-nablers














Assessment: E nablers

Good

One can reduce therisk of failure by

being the architect of his own e-strategy

Bad

High-risk game

When one decides to

use these e-nablersto create a newbusiness model, onemust have to make

significantinvestments in ITsystems

Ch t 8


























Chapter 8:The Critical Gap:

No e-Strategy Architect







To make thetransformation froma conventional

business modelhighly dependent onthe use of theInternet, one must

understand how IT systems are developed.

The IT System DevelopmentProcess



















Process

IT systems use software that runs onhardware











Process

To ensure that the hardware and thesoftware work in harmony, someone hasto design the software so that it is

compatible with the hardware.













Process

An outside “system integrator” designs orbuys the software and decides on whichhardware it will run.

IBM, EDSIBM, ORACLE

IBM, CISCO, SUN















Process

Some additional steps must be included for acompany to transform itself from itstraditional business model to an e-business

model.













Process

The outside consultant, or the Internet,becomes the architect of the client’sInternet strategy. It will design the e-

strategy which will determine the mostappropriate e-business model required tomigrate to a new economy.

The Absent Architect















The Absent Architect

“As the world moves to global networks, weaim to be the plumbers with our optics,silicon, software and services.”

-Richard McGinn (CEO of Lucent Technology)

Problems











Problems

In many companies, the plumber hasbecome the architect of the client’sInternet strategy by default

Most CEOs and most members of management do not understand howthe Internet works

CEOs do not have a coherent Internetstrategy together with a blueprint of the business requirements the Internetshould fulfill

Strategic thinking process



















Strategic thinking process

CEO is the owner of the process andthe architect of the strategy that results

CEOs put the design of an Internetstrategy in the hands of an outsideconsultant

Put Internet “destiny” in the hands of theplumber – the outside IT consultant

Plumber – becomes the de facto architect





















Difficulty of IT consultants Most of their clients cannot articulate

their requirements

They would rather not be the architectand the client should be his or herarchitect

High failure rate of IT projects iscaused primarily by unclear orambiguous client requirements

















First dichotomy: the client abdicates hisrole as architect because of a lack of understanding of the Internet, and the

IT consultant finds herself in anundesired role by default Client is not satisfied with the solution, the

consultant is frustrated with the client’sinability to articulate “what they want” theInternet to do















Second dichotomy: the client looks foroutside help only to discover thattraditional consultants don’t understandthe Internet and the new e-businessconsultants don’t understand theclient’s industry












Conclusion:

Never let the plumber be the architect

of your internet strategy!

The DPI Goal: the Client is theArchitect










Architect

Goal of process: to makelife easier for both partiesby making the client the

architect of the company’sInternet strategy











Approach: 3 tenets Every company interacts with its customers

in its own particular way, depending on the

distinctiveness of its business strategy No one understands the genetic code of the

company better than do its employees

The modus operandi on how to use the

Internet as another tool to deploy abusiness strategy needs to be propriety toeach company and, as such, can bedesigned only by a company’s own people




















Result: E-strategy process that producesthe following outcome:

A unique blueprint of a new business

model that leverages the Internet as astrategic weapon to cause commercialtransactions to occur

To achieve this outcome and make the

client the architect of the Internet strategy,the client must have access to a structuredprocess






http://rds.yahoo.com/S=96062857/K=internet/v=2/SID=e/l=II/R=80/*-http://images.search.yahoo.com/search/images/view?back=http%3a//images.search.yahoo.com/search/images%3fsrch=1%26p=internet%26ei=UTF-8%26n=20%26fl=0%26b=61&h=1024&w=1280&imgcurl=&imgurl=sakamdaznam.slobodensoftver.org.mk/kakoizgleda/shot-internet.png&name=shot-%3cb%3einternet%3c/b%3e.png&p=internet&rurl=&rcurl=&type=&no=80&tt=1,400,000









Delivering a Clear InternetStrategy

Interview:

Bruce Simpson

CEO, FedEx Custom Critical

New Questions ConfrontToday’s CEO




y

Where does the Internet fitin our industry?

What new opportunities canwe jump on?

Where are the hiddenthreats?

How can we prevent new e-competitors from infringingon our markets?

How do we create an e-

strategy that supports andeven turbocharges ourbusiness strategy?

FedEx Custom Critical




DPI’s new e-strategy process enabledBruce Simpson and his managementteam to chart a clear course throughthe Internet maze.

Driving Force of FedEx’sStrategy




gy

“ We provide dedicated transportation services that apply oursuperior, integrated communication network and controlleddelivery system. We concentrate on customers with precise timecritical needs in geographic areas with an adequateinfrastructure and a critical mass of manufacturers and shippers.Our intent is to be the unsurpassed leader in measuredcustomer satisfaction.”




However, FedEx Custom Critical had notyet developed a cohesive overallInternet strategy for the enterprise.

John Greulich, director of technology concurs:




gy

“ Our approach was verycustomer-focused, and it stillis… But as we go forwardand offer more capabilitiesto our customers we don’twant to make our customersadapt to our system… Infact, it’s one of our keystrength: our system for pick ups and deliveries andtracking them but we wantto adapt ourselves to the

way our customers dobusiness not the other wayaround.”

Using the E-strategy Process




g gy

The team embarked on aninternet strategy that fullysupports the businessstrategy and placesresources where they willdeliver the greatest benefitto their customers, truck drivers and employees.

The e-Strategy process is acodified set of steps thatdemystifies the Internet

The Internet is broken down

to 12e-nablers that represent thebasic capabilities of theInternet.




Participants applied these 12 e-nablersto a detailed mapping of all the coreinformation processes outside andinside the company.

Determined which e-nabler might affectthe business positively or negatively.




“ The e-strategy processitself drives you to think about what informationprocesses you have inplace today, how yourfunctions relate to eachother and to yoursuppliers andcustomers… Added tothat, is the e-effect, or

the impact the Internetwill have on thosethings…”

Results of the e-StrategyProcess




Concepts for specific e-business applicationswere developed toaddress those

opportunities or threats. FedEx Custom Critical

now has a prioritizedset of e-projects, eachwith a defined set of business requirementsfor the hardware andsoftware solutiondevelopers to follow.

As Greulich explains




p

“The way we’ve looked at it is we’re building a bridge from twosides of the river. On one side of the river is our businessstrategy… And on the other side we’re now building a bridgeback from our Internet or e-strategy. And the real mission of execution is to make sure that they meet in the middle so youcan drive across it. We think we’ve got everybody on thebridge.”




“… Applying technology isreally limited by how wellpeople understand it,relate to it and changewith it. So you have toprecede change witheducation. And that’swhat this e-strategyprocess did for us. Iteducated and guided us

along on how to makethese changes and howstart taking steps to makethem happen…”




Today, FedEx Custom Critical has asolid foundation for its evolving e-strategy.

The most crucial aspect of the plan isthe linkage between FedEx CustomCritical’s business strategy, driving force

and e-strategy.




Chapter 9:Constructing the e-StrategyBlueprint

Introduction




Every commercial organization exists toconvert resources into products or servicesthat satisfy the needs of the markets. All

businesses have activities and some havebecome universal and have evolved into

functions necessary for the success of businesses.

Two Elements in AchievingTogetherness




The key element of success is to ensure that separate functions operate as an efficient and cohesive entity rather than disparate and independent silos

Cohesiveness is achieved by having a clear business strategy everyone understands and is committed to

Efficiency is dependent on how well these

functions are “connected” which relies most on our key topic which is information.

Information: The Lifeblood of Interconnectivity




The highest costs in organizations are notassociated to labor or material cost, but theinefficient flow of information from one

function to another which is retrieving,capturing, sorting and processing along thischain of functions

Information: The Lifeblood of Interconnectivity




Information is the link that keeps thesedifferent functions together. It is the

flow of such information acrossfunctions that determine the efficiencyof an organization

Disrupting Interconnectivity




Every organization is dependenton the flow of information acrossfunctions. It is in this area theinternet has its most disruptive

effect

The internet is basically atransporter of information.

Disrupting Interconnectivity




The internet has changed the rules of play in terms of how information getstransferred across functions.

To understand this flow requires aprocess, something most organizationsdo not have in place.

The DPI E-Strategy Process

Step I: Mapping The Organization’s




Map out the flow of information

through the organization’s keyoperating functions and clearlyidentify the pieces of data that

trigger each function’s key activities

Step I: Mapping The Organization sLifeblood

The DPI E-Strategy Process




Start by analyzing the currentbusiness model into its variousfunctions then take each functiontogether with the input utilized and

output generated Do this for all functions of the

company and track theinterconnectivity of those inputs andoutputs.

The DPI e-Strategy ProcessStep II: Points of Impact




Once one has cometo understand the12 e-nablers or

capabilities of theinternet, it isrelatively easy todetermines where

the Internet willtake its effect upon

p p

The DPI e-Strategy Process




An example of this concept is forexample, you are a company that useslarge quantities of natural resources,someone will setup a market exchangeto bring buyers and sellers together totrade at the best possible prices.

The DPI e-Strategy ProcessStep III: Implications




It is crucial to know the cause and effectsand made sure they are understood.

Determine the positive and negative

implications the points of impact will have.Using the example on step II a negativeside of putting up a market for trade is itwill bring more buyers into bidding andmay rise prices. A positive effect is thattransaction costs may be reducedsubstantially.

p p

The DPI e_strategy ProcessStep IV: Generating Internet




Once these implications of the pointsof impact are understood, it becomesrelatively easy to think of ways inwhich the e-nablers can be applied tocapitalize on using the internet for

the company’s advantage

p g

Applications


Step V: Competitive Applications




By replicating a competitor’s businessmodel you can identify the internet’s pointof impact and anticipate the advantagesused. You then steal the best applicationyou have generated and add this to yourown.

Step V: Competitive Applications





Watch out forkiller.com entities

atnticipate its modeland set out to buildthat model beforeanyone elso does.


Step VI: Choosing the Best




Choose amongst the best Internet applicationsand base it on rational criteria

Bring them now to this process of two filters.The first is the strategic filter in which involvesthe construction of business concepts. Second itis converted to a binary filter with 6 to 8 yes or

no questions. The more no answers you get, theless good it is.

Step VI: Choosing the Best

Application

The DPI e-Strategy ProcessStep VII: Construct a Blueprint to




Have a distinctive strategy that sets you

apart from your competitors. The goal of our strategic thinking process is

to help the company develop a businessstrategy that will change the rules of play

p p

Change the Rules of Play





The internetapplications that shouldend up on the blueprintare those that will

enhance to the greatestdegree a businessstrategy’s ability tochange the rules of play

to a company’sadvantage

Chapter 10:Third Imperative:




Third Imperative:Integrating the Business

Strategy and Internet Processes

The Role of CEO in theBusiness Strategy Process




The CEO is the only Person who candrive the process of strategic thinking

Strategic thinking must start from top of

the organization “trickle-down” process, not “bubble-up”

It is recommended that the CEO include

in the process all key “stakeholders” inthe future of the business





There are two groups of peopleinvolved:

-Formulators of Strategy-those who contribute to the formulation of the

strategy

-Key Implementers of Strategy-those who can make or break its deployment





The CEO must be the owner and showcommitment to the whole process thereforehe must participate in all the steps.

The process will be very highly interactive

that invites discussions and debate andconstructive provocation

It is important that the CEO encourage frank,open discussions of the issues and challenges

facing the business If the CEO is not comfortable with this style

should not use this process

The Role of The CEO in the e-Strategy Process




The CEO must, as in setting the businessstrategy through the strategic thinkingprocess, be the owner of the e-strategy

The internet will change businesses in the

future, therefore the CEO must lead thetransformation

The CEO is the only person who can affectradical change in an organization, not the

CIO or the CTO But he can’t play as process facilitator

The Role of the ProcessFacilitator




Moderator –directs traffic as well as he canduring a meeting without any specific process

Facilitator comes to a meeting with a structured process

together with specific instrument to keep thediscussion moving forward in a constructivemanner

Ensures that the participants have debated all thekey concepts of the strategy and reach a

consensus Keeps the process honest, balanced, and objective

Logistics of the StrategicThinking Process




Seven Steps of Strategic Thinking Process

Clarification of the current profile

Analysis of the environmental variables

Identification of the driving force options anddevelopment of strategic profiles and scenarios

Choice of a tentative future strategic profile

Development of competitive profiles

Identification of critical issues

Final strategic profile

Strategic Thinking Process




CurrentProfile

External

Variables

Internal

StrategicOptions

Competitors

DrivingForce

#1DrivingForce#2

DrivingForce#3

TentativeStrategicProfile

A

B

C

FinalStrategicProfile

CriticalIssues1. ----------

2. ----------

3. ----------

4. ----------





Clarification of the Current Profile

First step is to understand commoncharacteristics that cut through current

products, customer, market segment,geographic market

This allows one to understand the

business’s current driving force, areas of excellence, and current strategy

Clarification of the CurrentProfile




Current Profile

Products Customers/Users

Industry Segments Geographic

Markets


?




Analysis of Environmental Variables

To accommodate the environment the company willface in the future, analysis of the external, internal, andenvironmental variables must be done.

The variables are highly subjective to each person’sview. At DPI they discuss all the variables each personsees and get the agreement on the “significant few.”

They design a Strategic Input Survey that seeksresponses from each member of the managementteam. These responses are obtained before the work sessions, are edited and collated to become the “rawmaterial” for this session.

Analysis of the Environmental Variables




EXTERNAL

INTERNAL

ENVIRONMENTAL

VARIABLES





Development of Strategic Scenarios Stemmingfrom Different Driving Forces

After the variables have been decided, it can explore

the different components of the business that couldbe the engine or driving force of its future strategy.

By comparing profiles created by management, theycan choose which one is suited or ideal in relation toits future environment.

After this manage now has a tentative future strategyand a strategic profile of what it wants to become.

Development of StrategicScenarios Stemming fromDifferent Driving Forces




Environmental Variables

DrivingForce 1

DrivingForce 2

DrivingForce 3

Strategic Profiles





Development of Competitive Profiles The next step is an analysis of the strategy of the

competitors the company will meet in the future. They can identify who the competitors will be by

applying the concept of “driving force” and areasof excellence to them, anticipate their strategyand draw profiles of what each one will emphasizemore and less in terms of future products,customers, and markets.

By doing this, management can also take action tomanage their strategy and change the rules of play to the company’s advantage.

Development of CompetitiveProfiles




TentativeFuture

StrategicProfile

A

B

C





Identification of Critical Issues If management wants its new strategy to succeed,

it must now devote sometime to thinking throughthe implications of the strategy and identify thecritical issues that stand in its way.

These critical issues become the agenda of management.

Each issue is assigned an owner who will be heldaccountable for getting the issue resolved; actionsteps are identified and completion dates areagreed to.

It is the resolution of these critical issues thatassures the successful deployment of the strategy.

Identification of Critical Issues




FinalStrategicProfile

Critical Issues

#1

#2

#3

#4

Internet Strategy

Integrating the Two Processes




Due to the enigma phenomenon, mostcompanies are addressing the issuesfragmentally.

It is ok to experiment but without anoverall corporate blueprint, it would bevery costly and may not support the

strategic direction of the business





To open the “black box” and codify theprocess of formulating and deploying aninternet strategy that supports the

business strategy of the enterprisethere are six phases over a six- to –ninemonth time frame process.





BUSINESS INTERNET

INTEGRATED

STRATEGY

1 MONTH 1 MONTH 1 MONTH 3 MONTHS

1 YEAR

B BUSINESSSTRATEGY

INTERNETSTRATEGY

SO

Cl

ClREVIEW

½ DAY 3 DAYS 3 DAYS 1 DAY ½ DAY 2 DAYS

PHASE I PHASE II PHASE III PHASE IV PHASE V PHASE VI





Phase 1: Briefing Session This session is intended to accomplish the

following outcomes: Give the selected members of strategy formulation

team an understanding of the overall scope of the12-month

Introduce the SFT to the concepts and process of strategic thinking

Introduce the SFT to the Strategic Input Survey

and coach them on how to respond to thequestions of the different variable the organizationmay encounter in the future





Phase 2: Strategic Thinking Work Session

A 3 day session is facilitated by DPI professionaland delivers the following outcome: A clear statement of strategy and direction for the business

A clear profile of the products, customers, and geographicmarkets the company will pursue and those it will not

A short list of critical issues which will be the managementswork plan and whose resolution will take the organization fromwhere it is today to what it wants to be in the future

Introduce e-strategy team to prework document andpreparations for the next sessions





Phase 3: e-Strategy Session

This session is dedicated to the use of our e-strategy process which delivers the following

outcomes: An internet strategy that is integrated and

supports the business strategy of the company

A blueprint of prioritized that Internet applicationsby mode of Net

A list of business requirements separated intomusts and wants for each application





Phase 4: Strategic Objectives

A one-day work session which has twooutcomes: Development of offensive positions that

the company must capture to make itsstrategy succeed

Development of defensive that the

company must defend at all costs to makeits strategy succeed





Phase 5: Monitoring Progress

A review of the status of each strategiccritical issue on management’s list

A review of the status of each Internetapplication project





Phase VI: Review

Reviews or revisits previous conclusionsto fine-tune and tighten company’sstrategic focus.

Chapter 10 case




Integrating Strategy and e-Strategy

Interview:

Neil McDonough,

President, FLEXcon

Company Profile




FLEXcon

Makers of laminated adhesive-backedmaterials that are used in diverse

applications from labels for shampoo andwine bottles to membranes for touch padsand holographic security indicia.

Earned $400million in year 2000

President: Neil McDonogh

Facing the Internet before




There were many ideas on how to useinternet in their business and was linkedto their strategy.

However it wasn’t very well structuredprocess on how they will use theinternet which needs to be whole,

coordinated and a cohesive plan that isintegrated to their overall strategy.

DPI Developed e-Strategy




Goal: “to have a comfort level withwhat we were doing and the pace wewere it at… It was more an approach of

what should be, based on who we areand how we see the world.”

Using the 12 e –nablers help show thecapabilities of the internet. It is like trying out different clothes to

know what fits you and what doesn’t





Competitive Analysis Portion Studying your competitors and possible

new entrants

You can find out how your competitor futurebehavior or how it can use the internet againstyou

You may also find out how a new entrant withan internet headed strategy can change the

way you make business in your industry Competitor.com & Killer.com shows offensive

and defensive strategic standpoint





Competitive Analysis Portion

Going against yourself

This activity help show your strong points and

vulnerability on a competitor or new entrant’spoint of view.

Improving your weaknesses makes yourcompany stronger overall

At the same time use the same strategy toattack your competitors

What’s the Net Result forFLEXcon?




The e-strategy that came out was just a partof their overall strategy.

They were able to reach their comfort levelwhere they feel they are not falling behindwith the use of the web and know how tochoose on what to do and not to do.

“Using the web was the best used, to support

the initiatives we already had going on interms of end-user contact, more informationto customers, data for telesales people.”

What’s the Net Result forFLEXcon?




Sets of rules to standardize on what toput on the web guided their thoughtsand actions toward print and electronic

brochures for the web.

The e-strategy gave them a framework on how the applications should be

developed and used.

Lesson




Having an e-strategy help give youframework on how to make use of thenew technology strategically in the new

virtual market called the internet. It DPI e-strategy process helped the

company see which internet option fits

them the most and at the same time goback and reexamine their fundamentals.

Lesson




Having going the DPI and e-strategy processwon’t necessary result to a radical change tothe overall business strategy.

It also made them aware that the internettechnology and economy is growing thereforethey must revisit their strategy more oftenthan before to be ever competitive and not

get left behind

Conclusion

“Th i i




“The e-strategy process gives companies aframework to examine carefully each piece of the information stream form raw material tocustomer and identify where each e-nabler

may add value or pose a threat. The relativevalue or threat can be examined through thelens of the strategy. Based on thatprioritization, individual applications can be

designed and implemented to satisfy themost pressing needs of the business.”

Chapter 11:

Th T ibl d I ibl




The Tangible and IntangibleResults

Insurance Policy

I th b bilit




Against high failurerate of IT projects

Increases the probabilityof your own peoplegenerating Internetapplications that result in

new business processes

f f

Intangible Results




Demystification of the Internet

Control of One’s

Identity More Rapid

Deployment

Repeatable BusinessPractice

Tangible Results




CoherentCorporate

Blueprint Prioritized Applications

IntegratedBusiness andInternet Strategies

Coherent Corporate Blueprint




Stems from the analysis of theInternet’s impact on the company’sbusiness model, competitors’ businessmodels, and on the model of a potentialkiller.com model





Applications are classified by form:

Intranet Extranet

Internet





Business requirementsare generated for each

application

Technical specs

Proposal

Prioritized Applications




Significant impact on the followingareas of the business:

Ability to create new revenue streams forthe company

Ability to acquire new customers

Prioritized Applications




Ability to open new market segments

Ability to provide the company with

competitive advantage Ability to change the rules of play

Integrated Business andInternet Strategies

R d tti




Reduce puttingblame on each other(between IT

consultant andclient)

Requirements arearticulated better

Proposals submittedare more on target

Integrated Business andInternet Strategies

S l ti




Solutions areimplemented morequickly

Less cost Higher probability of

success




The End

Documents

e Strategy(Final)