BROAD MAPPING OF INDUSTRY ENVIRONMENTS Distribution logistics Processed foods Automotive Medical devices Known Customer Expectations Pharmaceuticals Consumer electronics Changing Pet care Education Stable Changing Environmental Landscape

CONSOLIDATORS Arenas: Vehicles: Distinguishing Features: Staging: Economic Logic: Discipline: Broad-line markets/wide product lines Long-term supplier relationships, selective mergers & Acquisitions Low cost, standardized offerings Outsourcing to reduce backward integration Attain maximum scale to reduce costs; industry leader Operational efficiency

PIONEERS Arenas: Vehicles: Distinguishing Features: Staging: Economic Logic: Discipline: New products, new core technologies Internal development & external licensing to larger firms First-to-market, fast innovation, patents Quick expansion into niche markets; develop sequential new technologies in R&D Generate high royalties from proprietary technology/patents; premium pricing for niched products Product leadership

TRENDSETTERS Arenas: Vehicles: Distinguishing Features: Staging: Economic Logic: Discipline: New market entry based on core product concept Internal development of product concepts; related acquisitions Customization, fast innovation, branding Penetration & development of related products & neighboring geographic markets Command superior pricing through customer loyalty or proprietary features Customer Intimacy

REINVENTORS Arenas: Vehicles: Distinguishing Features: Staging: Economic Logic: Discipline: Mature markets impacted by disruption “Skunkworks,” incubation of new businesses, strategic alliances with related firms New product introduction, case-of-use by customers Sequencing is difficult due to cannibalization Seek premium prices based on new products or low cost to serve large markets Resource allocation

SOWING SEEDS FOR DESTRUCTION Consolidators: Market share plateaus Financial tactics drive strategy Boiling Frog Syndrome

SOWING SEEDS FOR DESTRUCTION Pioneers: Cash flow dries up Key people leave Entrepreneurial graveyard

SOWING SEEDS FOR DESTRUCTION Trendsetters: Brand name becomes stale Imitation by rivals Retreat to cave

SOWING SEEDS FOR DESTRUCTION Reinventors: Poor resource allocation Fiefdoms Dinosaur pit

STRATEGIC LEADERSHIP IMPERATIVES Consolidators: Acquire complimentary capabilities Focus on core competencies Create a culture that values efficiency & execution

STRATEGIC LEADERSHIP IMPERATIVES Pioneers: Monitor cash flow Champion new products Create a culture that values diverse opinions & participation

STRATEGIC LEADERSHIP IMPERATIVES Trendsetters: Avoid cannibalization Manage brands image Create a culture that values customer loyalty & service

STRATEGIC LEADERSHIP IMPERATIVES Reinventors: Manage diverse product portfolio Acquire pioneers & sell businesses past their peak Create a culture that values cross-product cooperation & sharing resources

TESTING THE QUALITY OF YOUR STRATEGY Key Evaluation Criteria 1. 2. 3. Does your strategy fit with what’s going on in the environment? Is there healthy profit potential where you’re headed? Does your strategy align with the key success factors of your chosen environment? Does your strategy exploit your key resources? With your particular mix of resources, does this strategy give you a good head start on competitors? Can you pursue this strategy more economically than competitors? Will your envisioned differentiators be sustainable? Will competitors have difficulty matching you? If not, does your strategy explicitly include a ceaseless regimen of innovation and opportunity creation?

TESTING THE QUALITY OF YOUR STRATEGY 4. 5. 6. Are the elements of your strategy internally consistent? Have you made choices of arenas, vehicles, differentiators, and staging, and economic logic? Do they all fit and mutually reinforce each other? Do you have enough resources to pursue this strategy? Do you have the money, managerial time and talent, and other capabilities to do all you envision? Are you sure you’re not spreading your resources too thinly, only to be left with a collection of feeble positions. Is your strategy implementable? Will your key constituencies allow you to pursue this strategy? Can your organization make it through the transition? Are you and your management team able and willing to lead the required changes?