By integrating depth understanding of technology development and market dynamics, together with creativity, business acumen and knowledge of access to resources, Chandler Reed helps companies create, develop, turbo-charge, turnaround and implement strategies for growth. As food for thought, courtesy of our ‘Strategy Toolbox’, below are selected tip-of-the-iceberg frameworks to provoke strategic thinking.
   
 STRATEGY OVERVIEW :  1 + 1 > 3
   

Corporations succeed or fail on strategy and execution. But what is Strategy? Ultimately, it is the process, plan or method by which value is created, such that the whole is greater than the sum of the parts. While many forms of Strategy exist, many have traditionally centered around extension, leverage, consolidation, manipulation of tangible assets, and the creation of economies of scale. In a world increasingly dominated by intellectual property and knowledge capital, the most productive forms of Strategy result from the confluence of knowledge, insight and creativity.

The ‘Box’
All corporations exist in a conceptual ‘Box’ that is built around their culture, values, perceptions, capabilities, resources, knowledge and goals. Strategies, broadly, are of two kinds, those that create value and growth by the direct extension of those capabilities within the Box; and those which create value and growth by Re-Framing opportunities and thinking Outside the Box. All companies implicitly rely on both, though they may not be equally adept at articulating or managing them. In general terms, Extension builds out from within the Box, while Innovation and Venturing work both from within and outside the Box, and Re-Framing takes as fundamental the perspective from Outside the Box.

   
Extension
Strategic Extension builds from the current business base incrementally:
Geographic Expansion;
Brand Extension;
Acquisition.

Innovation
Successful internal Innovation requires:
Targeting Opportunities;
Resource Allocation;
Corporate Culture of Entrepreneurship & Innovation

Venturing
Successful Venturing can build upon internal innovation or
leverage outside innovation through:
Partnering
Funding.

 

Out-of-the-Box Thinking
Re-Framing finds new value by altering the view of the ‘Box’ and finding new value in the changed perspective. This new vantage expands the knowledge capital content of processes, products and services, increasing the value propositions that have guided the corporation’s activities.
Knowledge Capital Strategy;
Re-Framing Value Propositions;
Disruptive Technologies.

Strategy Toolbox
Mapping
Market Gap Analysis
Re-Framing
Disruptive Technologies

   
 STRATEGY TOOLBOX:  Mapping
   

Mapping is an important process to begin strategic planning. While the strategic planning process can be focused on different focal areas within a corporation’s field of interest, a Core Capabilities map creates a common starting point. This generates consensus regarding the starting point inside the box, as well as greater coherence in subsequent analytical, creative, feasibility, developmental, and critical-path processes. In general, there are three important phases to the mapping processes:

Creating an Unfiltered Inventory;

Relationship Identification and Affiliation;

Consolidation and Refinement.

   
 STRATEGY TOOLBOX: Market Gap Analysis
   

Identifying new targets of opportunity is one way of Extending the company’s Core Capabilities. Opportunity identification can be approached systematically through the analysis of gaps in the marketplace. The Market Gap Analysis chart below outlines the process of segmenting, development, analysis and review to identify new business opportunities.

   
 STRATEGY TOOLBOX:
 Out-of-the-Box Thinking
   

Re-Framing

Hidden value is best perceived by changing the Frame of Reference. Some of the reference points that can limit perception of value and opportunity include:

Captive Perceptions of Product, Process and Customer;

Internal Value Networks that Allocate Resources, Define Goals;

Linkages between Markets, Technology and Capital.

The measure of the value of Re-Framing strategic options is seen in the degree to which they instruct action and change priorities. Technology-driven enterprises can often miss the mark because their Frame of Reference is their perception of the technology solution, not that of the customer’s. Likewise market-driven enterprises can be limited to incrementalism and head-to-head competition because they see only one dimension of the customer as pre-defined by their mutual product transactions.

   
 STRATEGY TOOLBOX:
 Disruptive Technology
   
Disruptive Technologies (first defined by Harvard professor Clayton Christensen in his groundbreaking study The Innovator’s Dilemma, When New Technologies Cause Great Firms to Fail) are a classic example of Out-of-the-Box challenges to a company’s otherwise sound strategy, and a fundamental reason for engaging in Re-Framing processes in strategic planning.
 
Technology Eclipse
 
“…good management itself (is) the root cause (of failure when confronted with disruptive technologies)….The very decision-making and resource-allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies: listening carefully to customers; tracking competitors’ actions carefully; and investing resources to design and build higher-performance, higher-quality products that will yield greater profit. These (good management tactics) are the reasons why great firms stumbled or failed when confronted with disruptive technological change.”
 
The Innovator’s Dilemma, When New Technologies Cause Great Firms to Fail, Clayton Christensen, Harvard Business School Press, 1997.
 

Disruptive Technologies are those that can blindside well-managed corporations and can lead to their downfall. Companies need to adopt two approaches with respect to Disruptive Technologies – anticipatory/defensive and developmental. Established companies need develop strategic antenna that identify Disruptive Technology threats to their existing businesses, as well as look Out-of-the-Box at how their core capabilities could be Re-Framed and re-visioned to become a Disruptive Technology opportunity in themselves.

Vulnerability Assessment

A Disruptive Technology can create many types of challenges to an existing product and market, including:

Performance – quantum increases in performance;

Cost & Price – significant reductions in cost which can translate directly to the market or as increased profit margins;

Watershedding – the creation or enabling of a whole new range of possible features and benefits;

Left-Fielding – radically changing the way the customer engages in the benefits previously provided by the old product.

A Disruptive Technology Vulnerability Assessment begins with a process of Re-Framing the product life-cycle, from manufacturing through customer benefits and use, in order to inventory the modes of disruption, like a reverse Market Gap Analysis. Those modes can be further put on the radar screen through technology scouting and addressed through pre-emptive engagement.

Pre-Emptively Engaging Disruptive Technology

Ultimately, it is difficult for an established corporation to engage a Disruptive Technology within the framework of internal functions, because it is precisely the nature and potential for disruption that runs contrary to the embedded value system of the enterprise. Anticipating the challenges of Disruptive Technology, while maintaining the core business, is best done through the vehicles of Venture Development. This allows the scale, values and resource-allocation processes to mesh with the emerging Disruptive Technology, and the role and relation to the established corporation can be set in a variety of contexts.