Strategy Calibration Test

  1. ANDREWS:  The Concept of Corporate Strategy
    Purpose: To Formulate a Strategy in a Very Systematic Manner

    Elements of a corporation’s environment:Technology,Ecology,Economy,Industry (Porter 5 Forces),SocietyPolitics
  2. PORTER:  How Competitive Forces Shape Strategy
    Purpose: To Determine the “Attractiveness”/“Profitability” of an Industry And If In An Industry—How An Organization Should Position Itself Given Industry Forces

    Threat of entry (the easier to enter, the less attractive/profitable)

    Rivalry (“gentle and subdued” vs. “vicious and warlike”)

    Threat of substitutes (to what extent are there alternative ways to satisfy a product’s needs?)

    Bargaining power of suppliers (how much can they influence price?; this a function of the number of suppliers, the specialization of the materials, switching costs)

    Bargaining power of buyers (how much can they influence price?; this a function of the number of buyers, the specialization of your products, switching costs)
  3. HAMBRICK AND FREDRICKSON:  Are You Sure You Have A Strategy?
    Purpose: Defines the Components of a Strategy

    Arenas-Where will we be active?

    Vehicles-How will we get there?

    Differentiators- How will we win in the marketplace?  How will we get customers to come our way

    Staging- What will be our speed and sequence of moves (in order to heighten success)?

    Economic logic-How will we obtain our returns?
  4. RUMELT:  Evaluating Business Strategy
    Purpose: To Proactively Evaluate A Strategy (Test for critical flaws)

    Consistency; a strategy must not have mutually inconsistent goals, policies, or tactics.

    Consonance; a strategy must represent an adaptive response to the external environment and to critical changes occurring in it.  Advantages:Skills, Resources, Position
  5. PINE AND GILMORE:  Welcome To The Experience Economy
    Purpose: Describes How an Organization Can Optimally Stage an Experience

    • Four Realms of an Experience:
    • Passive Participation-Absorption
    • Active Participation -absorption
    • Active Participation-Immersion
    • Passive Participation-Immersion.

    Generally, we find that the richest experiences – encompass aspects of all four realms, forming a “sweet spot” around the area where the spectra meet.

    • Theme the experience.
    • Rainforest café, Entertainment establishments

    Harmonize impressions with positive cues.Impressions are the takeaways of the experience

    Eliminate negative cues.Eliminate anything that diminishes, contracts, distracts from theme

    Mix in memorabilia.
  6. FREI:  The Four Things a Service Business Must Get Right
    Purpose: Describes The “Management Tools And Techniques” Necessary To Succeed In A Service Organization

    The soundness of a product business’ offering and the management of its people—are just as indispensable in a service business and can be addressed with a similar tool kit.

    Questions to ask:(1) Which customers are you focusing on? (2) Which behaviors do you want? (3) And which techniques will most effectively influence behavior?


    1) Instrumental (the carrots and sticks we commonly see play out as discounts and late fees)

    2) Normative (the use of shame, blame, and pride to motivate us to return shopping carts and pick up trash, even when no one is looking).
  7. RAMASWAMY:  Co-Creation of Value – Towards an Expanded Paradigm of Value Creation
    Purpose: Describes a Systematic Innovative Approach To Create Value—For the Consumer and Corporation

    The DART model (dialogue, access, risk-return, transparency) which guides implementation.  To use the model well, the company has to be able to manage and influence a large number of collaborators

    • Three elements of value co creation:
    • Co Creation Platforms: you sit down and co-create with the company (e.g. shoe design, platform)
    • Community Engagement Platforms: not just creating the product but the experience (e.g. communication with the team, running advice)
    • Resource Leverage: oartnered with other companies:  fitness clubs, Apple, Google
  8. BARNEY:  Looking Inside For Competitive Advantage
    Purpose: Provides a systematic approach to determine whether an organization’s resources contribute to a sustainable competitive advantage.

    (this is directly related to Andrews’ “Might” and “Can”)

    • In assessing the internal strengths and weaknesses of an organization, one must address 4 questions concerning:
    • 1.Value added
    • 2.Rareness
    • 3.Imitability
    • 4.Organization

    • SWOT analysis creates “Internal Blanks”.  Four key areas of internal strengths and weaknesses to overcome – where information must be filled in
    • An organization’s resources and capabilities include:
    • - Financial resources:  debt, equity, retained earnings, etc
    • - Physical resources:  equipment, manufacturing and other facilities,
    • - Human resources: experience, knowledge, judgment, risk- taking propensity,
    • -Organizational resources:  history, reputation, relationships, trust, culture, structure, control and reward systems.

    **Table answering Y/N
  9. KIM & MAUBORGNE:  Blue Ocean Strategy
    Purpose: provides an approach to create an uncontested market, making the competition and its environment irrelevant.

    • Two ways to create a BO:
    • 1) in a few cases cos. can create completely new industries (e.g., eBay)
    • 2) in most cases a BO is created within a Red Ocean when a company alters the boundaries of an existing industry (e.g., breaking the boundary between circus and theater, between the horse drawn carriage and automobiles).

    • Blue Ocean Strategy - “How To”
    • 1) Evaluate all components of the organization’s business system
    • 2) Discover new sources of value for the consumer; this can be achieved with elements of another industry’s business system.
  10. ZOOK AND ALLEN:  Growth Outside the Core
    • 6 Ways to Grow Into Adjacent Space
    • 1)Along the value chain - e.g., DeBeers, from diamond wholesaling to retailing.
    • 2) New products/services - IBM into global services.
    • 3) Use new distribution channels - EAS; from specialty stores to box stores, with slight product alteration.
    • 4)Enter new geographies. 5)Address new customer segments - Charles Schwab to higher end customers with slight product alteration.
    • 6)Move into a “white space” with a new product, based on a core competency – American Airlines and Sabre.

    • Key Principles of Repeatability:
    • -Adjacency only works of you have a strong core
    • - The best place to look for adjacency opportunities is within a company’s strongest customers.
    • -Be extraordinarily disciplined in applying rigorous screens.
Card Set
Strategy Calibration Test