Strategy Flashcards
Attributes of Defender / Niche
- locate and maintain in a relatively stable product / service
product domain thorugh high quality or low price
Cooper’s 5 Strategy Statements
Guru of NPD - 1980s
- Differentialted
- Low budget, conservative
- Technology push
- Not in the game
- High best, diverse
Attributes of Reactors / Reactive
not successful
- not agreesive until business is threatened
= no strategy
Attributes of Analyzers / Fast Followers
- seldom first but often have better products
- tryo to maintain stablitity but innovate at edges at market
- internal efficiencies / reliable, high quality products
- monitors competition, brings more cost effective products
Arena Assessment
how the market looks
Top left - Wildcats (high risk)
Bottom left - Dogs
Top Right - Stars (good bets)
Bottom Right - Cash Cow (conversative bet)
Disruptive Technologies
- introduces different value prop
- typically different technology basis
Sustaining Technologies
- discontinuous or tweaking or incremental
- improve established product
- same customers
- same technology
Contents of a Business Model
- Customer Value Proposition
- Profit Formula
- Key Resources
- Key Processes
Wheelright & Clark
“Product strategy should answer 4 questions…”
- Who are the target customers
- What products will be offered
- How will they reach the customers
- Why will customers prefer our products to our competitors
Maximize Market leverage from common technology
Process
- segment markets
- identify growth areas
- define current platforms
- analyze competing products
- consider future platforms initiatives
Project Execution
PROJECT TEAM
composition
organization
PROJECT MANAGEMENT
reviews and evaluation
decision making
tools
PROBLEM SOLVING
info gathering
conflict resolution
functionality integrity
Alliance or Partnered Projects
Firm buys a newly designed product or process from another firm
4 Types of Product / Process Development Projects
- New core product
- Next generation product
- Addition to product family
- Add-on and enhancements
Performance Measures for Development Projects
Time to market
Productivity
Quality
5 factors involved in the choices about platform generations
- Technology evolution
- Competition
- ROI
- Customer Support
- Available resources
Linking product / market strategy to specific development projects raises 2 critical issues
- The number, timing and rate of change of platform products
- the number, timing, frequency and relationship of derivative products
Critcal issues in the Product / Market Strategy
- The # of core products
- The 3 of enhanced products
- The frequency of new product introductions
Product / Market planning and strategy addresses 4 important questions
- What products will be offered (breadth and depth)
- Who will be the target customers?
- How will the product reaach the customers (distribution)
- Why will customers prefer ours to the competition?
Invention considerations (issues)
Timing, pre-requisities, resources and specific outsome are largely unpredictable
cause delay, back tracking and disappointment
“Great Leap Forwarde” Technology Strategy
making infrequent but large scale changes in technology that substantially advance the state of the art
“Rapid Inch Up” Technology Strategy
Frequent, small changes in technology that cumulatively lead to continuous performance improvement
After focus is defined, what does the technology strategy need to establish?
The timing and frequency of implementation
Partly technical and introducing into market
Fist step in creating a Technology Strategy?
“Focus” - defines those capabilities to achieve a distinctive advantage to competitors
What Technology Strategies include
“know how” that needs to create, produce and market its product and deliver to its customers
Use “know hows” and “know whys”
Typical Product Hierarchy
- Strategic Plan
- Portfolio Platform
- Program
- Project
- Sub Project
Open Innovation
Use external and internal resources for ideas
external and internal paths to market
use external licenses and processes
Technology Strategy & Planning Objectives
Guides acquistion, development, application of technology for competirive advantage
(includes manufacturing proce4ss and service delivery)
Diversification Strategy
New markets with new products
Product Development Strategy
new products to better satisfy existing market needs
Market Development Strategy
open new markets for established products
Market Penetration Strategy
Further growth from existing products in existing markets
Laying the foundation for projects
- setting out the strategy
- building capabiltity
- acquiring development resources
- defining objectives
- selecting projects
Benefits of a Platform Strategy
- focus on key decisions @ the right time
- enables rapid deployment and consistency
- longer term view of the product strategy
- operational efficiencies
- recognize when product becomes obsolete
Brand
The identify of a specific product
Can be
- symbol
- name
- color combo
- slogan
Strategy
A plan of action to reach a particular goal
Techniques used in Strategic Planning
- SWOT Analysis (strengths, weaknesses, opportunities and threats)
- PEST Analysis - political, economic, social and technical
STEER Analyis - socio-cultural / eco, ecological Regulatory
EPISTEL - environmental, political, informative, social, technical, economic and legal
Strategic Planning
process of defining the strategy or direction and
making decisions on allocating its resources to pursue this strategy
including people and capital
Product Innovation
creation and subsequent introduction of good that is new or improved on previous good or service of its kind
Product (noun)
thing or things produced by labor of effort
Balanced Scorecard
Often used to evaluate the performance of the business and progress towards objectives
Strategic Management
entails specifying the co’s mission, vision and objectives
developing policies and plans (projects and programs) to achieve its objectives
allocating resources to implement the policies, plans and programs
Benefits of effective development efforts
Market position
Resource utilization
Organizational renewal and enhancement
Development Strategy Framework
Pre-planning
align technical and product marketing strategies
Problems in New Product and New Process Development
- Moving toward
- mismatches between functions
- lack of product distinctiveness
- unexpected technical problems
- problem solving delays
- unresolved policy issues
Final Element of a Developmental Strategy
Post Project Learning
Integrating / Linking project mgmt elements to Developmental Strategy
Project Strategy
Project Execution
Project Performance
Project Performance Measures
- Lead times
- People, resources
- Project cost
- Project effectivness
Project Strategy
PROJECT CONTENT
- knowledge base
- company views and procedures
PROJECT FOCUS
- scope and context complexity
PRE-PROJECT PLANS
- phases and objectives
- performance measures
- incentives
Strategic Business Unit (SBU)
A business unit w/in the overall corporate identity which is distinguishable from other units because it serves a defined external market.
conducts strategy planning in relation to products in the market
What was TEAM formerly known as?
Team of Destiny
Who is TEAM
is a leadership development co founded by Woodward and Brady in 1999 in Michigan
Brand Equity
marketing efforts andf outcomes that accrue to a product with its brand name compared to others with the same product without the brand name
Market
variety of systems, institutions, procedures, social relations and infrastructures where partners engage in exchange
Mission Statement
Formal, short written statement of the purpose of the company.
- guides actions of the company
- spells out overall goal
- provides sense of direction
- decision making guide
Loss Leader
product sold at a low price (at or below cost) to stimulate other profitable sales
(marketing promotion)
Markov Theory
In probablility theory -
a Markov model is a stochastic model that assumes Markov property
This assumption enables reasoning and computation that would otherwise be intractable
Arena
Event simulation software developed by Rockwell.
Uses SIMAN processor and simulation language
user builds an experimental model by placing models that represented processes or logic
Customer Franchise
the cumulative image of a product, held by the consumer, resulting from long exposure to the product or marketing of the product
Mass Customization
Use of flexible, computer-aided manufacturing systems to produce custom output
- combine low unit costs of mass production processes
with
the flexibility of individual customization
Normative Leverage
application of general norms or the other party’s standards to advance one’s own arguments for one’s own good
Creativity
a website covering all things creative in advertising and design
launched in 1986
showcases best ideas and creative processes from concept through execution
Trademark Symbols
UNREGISTERED TRADE MARK - promote brand or good UNREGISTERED SERVICE MARK - promote / brand or sevice REGISTERED TRADE MARK
Early Adopter
early customer of a product “trend setter”
Where does “EARLY ADOPTER” originate from?
Rogers - Diffusional of Innovations
Non-Conventional Trademarks
Color
Smell
Sound
P3M3
Programme & Project Mgmt Maturity Model
- reference guide for structured best practices
- hierarchy of key process areas (KPIs)
Objective of Technology Strategy
guides firm in acquiring, developing and applying technology for competitive advantage
Sr Mgr Back End Roles
- Team Launcher
- Energy Source
- Sponsor / Coach
- Process Improver
Front End Roles for Sr. Product Mgrs
- Direction Setter
- Product Line Architect
- Portfolio Mgr
- Process owner / creator
Why aren’t Sr Mgrs involved early in projects?
- a lot of knowledge is involved
- problems are less defined and tools/roles are not clear
- lack of metrics / feedback loops
- absence of urgency
Ways that senior managers demonstrate excellence
- set direction
- get people aligned
- select, train and develop people
- create, share, influence how it gets done
Michael Porter
Harvard Business
Overall cost leadership
Differentialtion
Focus
Elements of Strategy
- decide what business you’re in
- decide who your customers are and what you want to offer them
- decide how you will play the game
- identify strategic assets and capabilities
- create the right organizational environment
Corporate Values
- states the code of conduct, the posture and behavior expected of people involved in fullfilling the mission
Vision Statement
An act of imaging, guided by foresight, that reveals the possibilities.
it depicts the most desirable future state of the organization
Mission Statement
statement of the company’s creed, philosophy, purpose, business principles or corp beliefs
purpose is to focus energy and people
Strategy Definition (PMDA)
The organization’s mission, vision, values
one subset of the firm’s business strategy is the INNOVATION STRATEGY
sr mgrs own the strategy
How Strategy Fits Into NPD
Corp Mission, Vision, Values to Business Strategy (growth) to Innovation Strategy to New Opportunities Existing Opportunities to Business, Product and Platform Plans
Miles and Snow’s Categories of how firm respond to change
- Prospectors
- Analyzers
- Defenders
- Reactors
Defintion of Innovation or NPD Strategy
NPD strategy provides direction from the highest level of the organizations as to the selected drection regarding markets, technologies and customers
Corporate Strategy (Alternate)
A co’s game plan for achieving its objectives in light of its industry position, opportunities and resources.
Plan + objectives
Business Strategies
dervived from the co’s corporate strategy are its business strategies.
Examples of business strategies:
IT Strategy Marketing Strategy NPD Strategy HR Strategy PLM Strategy
Product Strategy defined by Cooper
a strategic master plan that guides your business’s new product war efforts
What a Product Strategy includes:
- goals for the co’s total product development efforts
- role of product development
- Strategic Arenas
- markets or market segments
- product types, product lines, product categories
- technologies & technical platform
Deployment - spending allocation across arenas
- which market get how much focus, how many resources
How to attack each arena to win
NPD Strategy to links from Mission Statement
Mission Statement (purpose)
to
Corporate / Business Strategy (plan of action)
to
Functional Strategy (functional depts to support business strategy) <– this is where the innovation strategy lies
NPD Strategy - Value / Benefit
The “Best” companies drive NPD Strategy from
Strategy
The Best co’s using NPD from Strategy see these results
7 - 10 times better profits as compared to the rest of companies
Derive 20-50% revenue from new products
NPD Strategy Authors
Michael Porter Miles & Snow Wheelwright & Clark Treacy & Wiersema Robert Cooper Anthony Ulwich
Early Publications From Robert Cooper
NPD Strategy & Process
Early Publications from Miles & Snow
NPD Strategy
Early Publications Michael Porter
5 Factors, Where We Should Plan (Business not NPD)
Coopers 5 Strategy Scenarios
- Differentiated
- Low Budget, Conservative
- Technology Push
- Not in the Game
- High Budget, Diverse
Cooper - Differentiated
Technologically sophisticated
High fit and focus
Strong Market Orientation
Cooper - Low Budget, Conservative
Low R&D
Copycat
Undifferentiated products
Cooper - Technology Push
Technically sophisticated
Low in market orientation, fit, focus, synergy
Cooper - Nol in the Game
Unsophisticated Low tech Low risk Copycat Simple/mature technologies
Cooper - High Budget, Diverse
Heavy R&D
No Direction, synergy, fit or focus
“Bull in a china shop”
Miles & Snow Strategy Types
Prospectors
Analyzers
Defenders
Reactors
Miles & Snow - Prospectors
“First to market”
Innovators
Adapt new technologies
Miles & Snow - Analyzers
“Fast Followers”
Often better products
Miles & Snow - Defenders
“Nich”
Maintain niche in stable market
Defend market at all costs
Miles & Snow - Reactors
Respond only to duress
NPD Strategy Type - FTM
First to Market
- new to world
- first w/ new technology
- requires large R&D budget
- often spin off new platform / business unit
Ex: DoCoMo, HP Printers, MP3 Player
NPD Strategy Type - FF
Fast Followers
- moves fast to bring a “better” product to market
- not a copycat
- Requires large research effort & budget
- competitive analysis
- most popular
Ex: Lexmark Printers, iPod
NPD Strategy Type - Niche
Niche / Defender
- will do anything (including developing new products) to defend its niche
- requires constant efforts associated with customer intimacy & knowledge
Ex; Orville Redenbacher, Canon Photo printers
NPD Strategy Type - Reactors
Reactors
- will do some improvements & enhancements but no real new product development
- does not pursue new markets
- may be used for dying product line
Ex: Cassette player, landline phone, analog tv
Goals / Metrics - FTM, Prospector, New To World
% of profits from new products
% of sales from new products
Open up new window of opportunity
Goals / Metrics - FF, Analyzer, New To Company
- want large market share
- support the co’s overall strategy
- % of profits from new products
- success / failure rates
Goals / Metrics - Defender / Niche
- ROI from development
- Supports the business strategy
Goals / Metrics - Reactor
- make money with little investment
- success, failure rates
- support the business strategy
NPD Strategy Links (adds in Core Strategic Vision)
Mission Statement to Corp / Business Strategy to Core Strategic Vision to Platform, Market, Technology Strategies
Core Strategic Vision (CSV)
Articulares the destination and general direction from where you current stand
- supplies context for product strategy
- guides those developing the prod strat by tellng them
1. where the co wants to go
2. how it expects to get there
3. why it believes it can be successful
It is focused, clear, complete and feasible
The Relationship of Core Strategy Vision to Strategy
Provides the basis for framing strategy by:
- Establishing the basis of the product platform strategy
- Focusing opportunity identification and selection efforts
- Allowing strategic alignment or other activities
- guiding NPD decision making
- Guiding technology strategy & core competency leverage points
- Setting expectations for stakeholders
Platform Definition
A core development project that typically has a design life of several years
and
establishes the basic architecture for a sest of follow on derivative projects
Plaform Definition Part 2
Underlying structures or architecture that are common across a group of products or that will be the basis of a series of products commercialized over a # of years
Platform Strategy Includes
- clear understanding of the underlying elements
- distinguishable defining technology
- platform differentiation provides competitive advantage
Wild Cats - High Risk Bets - Top Left
High Market Growth Rate
Low Business Strength, market share
Dogs - No Bet - Lower Left
Low Growth Rate
Low Strenght, market share
Stars - Good Bets - Top Right
High market growth
High strength, market share
Cash Cow - Conservative Bet - Lower rate
Low market growith
High strength, market share
Anthony Ulwich
Outcome Driven Innovation
Outcome Driven Hypothesis
Innovation is universally inefficient
Innovation is art, not science (exact)
Lack of precision in = lack of precision out
Ulwich - Outcomes Driven Innovation
6 Organic Market Growth Paths
CORE JOBS 1. Core or Sustaining market growth 2. Core Platform disruption 3. Core Market Disruption OTHER JOBS 4. Related Market Growth 5. New Platform Creation 6. Related Growth in a Disrupted Market
Ulwich - Outcomes Driven Innovation
1) Core and Sustaining Market Growth
Add a set of features to core platform to help customers get a core job done better
Ulwich - Outcomes Driven Innovation
2) Core Plaform Disruption
Construct a feature set on new platform to help customers get job done better / cheaper
Ulwich - Outcomes Driven Innovation
3) Core Market Disruption
Feature set on a new platform to enable NEW customers to perform the core job of a specialist
Ulwich - Outcomes Driven Innovation
4) Other Jobs - Related Market Growth
Add set of features to core platform to help customers get related job done
Ulwich - Outcomes Driven Innovation
5) Other Jobs - New Platform Creation
Construct a feature set on new platform to help customers get the core job and other jobs done better
Ulwich - Outcomes Driven Innovation
6) Other Jobs - Related Growth in Disruptive Market
Add a set of features to the new platform to help NEW customers to get a related job done
Strategic Technology Planning
A plan to acquiring technology to main or gain a competitive advantage
Guides the firm in the acquistion, development and application of technology for competitve advantage
Sources of Technology Strategy
- Internal or External
Needs role defintion and integration
T or F
You should not consider cost when initially evaluating a technology
True
Technology Strategy - Timing and Frequency Decisions
- leader vs follower
- rapid inch vs great leap forward
Sustaining Technology
- based on existing or familar
- improve performance of established products
- discontinuous, radical or incremental
Disruptive Technology
- new value prop thru technology
- worse near term product performance / quality
Product Innovation Charter (PIC)
Critical strategic doc for commercializing any new product
is the who, what, when, where & why of the NPD project
PIC Focus
- focuses domains of innovation for each opportunity
- strategy is for products, not process
- it is a charter - gives conditions under which the organization will operate
When is the PIC Created?
Stage 1 - Opportunity Identification
PIC Elements
Background
- ideas from analysis
- manager mandates
- why strategy was developed
Focus / Arean
- tech drivers
- market drivers
- product types, lines and categories
Goals and Objective
- project short term
- product long term
- metrics, profit growth, market status
Guidelines
- tactics & rules of the road
- management requirements
Arena / Strategic Arenas Defintion
At least 1 clear tech dimension
and 1 clear market dimension
that are compatible and have potential
the playing field where core competencies can be exploited
Strategic Areans
Markets
Technologies
Product Types
Arenas Create Synergies
Product can equae to a company’s core competencies
Value of PIC
- links corp strategy to product policy
- enable sr mgmt to define clear expectations
- enables NPD team to receive direction and clarity for work
Strategies must provide obvious value to
Customers
Where does Product Lifecycle Management Begin?
Stage 5 - Launch
When does Portfolio Management Start?
Stage 4 - Development
