1. Implementation Issues
CEDIR Program
Summer 2001
Professor Ramiro Montealegre
Implementation Issues

2. AGENDA FOR TODAY 8:30 - 9:20 Implementation issues 9:20 - 9:30 Break
9:30 -10:00 Group discussion
10:00- 11:00 Case STAPLES.COM
11: :10 Break
11: :00 Final review

3. Why Does Implementation Matter?
Strategy
Appropriate
Inappropriate
Success
All that can be done to ensure success has been done
Roulette
Good execution can mitigate poor strategy, forcing management to success or
Same good execution can hasten failure
Good
Implementation
Trouble
Poor execution hampers good strategy -- management may never become aware of strategic soundness because of execution inadequacies
Failure
Difficult to diagnose -- bad strategy masked by poor execution
More difficult to fix -- two things are wrong
Poor
Source: Modified version of materials in Thomas V. Bonoma, The Marketing Edge, The Free Press, 1985

4. The Delivery System Needs to Support and Reinforce the Resource System
Mapping the Resource System
People
Supply
Chains
Processes
Systems
Assets
Source: Clayton M. Christensen, Meeting the Challenge of Disruptive Change, Harvard Business Review 78, no. 2, March-April 2000

5. Innovation is the mainspring of the new economy.
Ideas are critical…
Innovation is the mainspring of the
new economy.
But as more and more companies compete in
ideas, the game changes to competing in the
implementation of the ideas.
In this next stage of competition:
Getting an idea gives way to getting it done!

6. Where to Play: Online / Offline
McDonnald’s
Customer
Interface
Fulfillment
Systems
Yahoo!
Bn.com
Egghead
Amazon.com
Source: Rayport & Jaworski 2000

7. Marketspace Evolution and Need for Continuous Innovation
Brand Promise
Branding
Marketing communications
Customer interface
Implementation
Objectives
Achieve strategic goals
Adjust product offering and delivery system to rapidly changing marketspace environment
Delivery
System
Innovation
Process
Deliver on the promised experience
Renew/innovate the
customer experience
Source: Monitor Analysis

8. Form vs. Function

9. Content Archetypes vs Offering Types

10. Is Content King?

11. Communities: Elements, Types, and Benefits
Elements of
Community
Types of
Communities
Member Outcomes:
Participation and Benefits
Just Friends
Degree of
Participation
Cohesion
Effectiveness
Help
Relationships
Language
Self-regulation
Enthusiasts
Need Fulfillment
Inclusion
Mutual Influence
Shared Emotional
Experiences
Friends in
Need
Players
Traders

12. Two Integral Components of Implementation
Objectives
Deliver the promised customer experience
Turn strategic intent/concepts into results
Build the
infrastructure to deliver on the brand promise
Objectives
Maintain fit between marketspace evolution and the company’s delivery system and product offering
Innovate/Renew the customer experience
Source: Monitor Analysis

13. Case Discussion -- Staples.com
CEDIR Program
Summer 2001
Professor Ramiro Montealegre
Case Discussion -- Staples.com

14. “Get Big Fast” Approach
- Online revenue expected over next few years
- Brand loyalties are malleable
- “Winner-take-all” dynamics
Network effect
Scale economies
Intrinsic ability to retain customers
- Lifetime value of customer exceeds acquisition’s
cost
- Risks of competitor preemption is high
- Can manage operational “growing pains”
- Capital market rewards market leaders

15. Hawk or Dove? Dovish Choices Hawkish Choices - Sharing content
- Separate physical location
- Separate brand
- Dedicated sale forces
- Separate management
- Separate reporting structure
Dovish Choices
- Sharing content
- Insider CEO
- Heavy cross-promotion
- Double commissioning
- Shared support systems

16. “Get it Right First” Approach
- Protecting quality and brand is paramount
- “Learning by doing” yields a big payoff

17. The Clicks-and-Mortar Spectrum
Integration
- established
brand
- shared
information
- purchasing
leverage
- distribution
efficiencies
Separation
- greater
focus
- more
flexibility
- access to
venture
funding
Strategic Joint In-house
Spin-off partnership venture division
Barnesand/ Rite Aid and Kbkids.com Staple.com
nobles.com Drugstore.com

18. Which Clicks-and-Mortar Approach?
Separation Integration
Brand extends to Internet
Different customer segment/product mix
Price differently online and in stores
Have Internet skills/experience
Willing to judge Internet different
Channel conflict
Threaten current business model
Distribution system translate well
IS a solid foundation to build
Are systems a competitive advantages
Having trouble attracting/retaining talent
Need outside capital to fund venture
Is a supplier, distributor, or other partner key
Brand
Management
Operations
Equity

19. The Balanced Scorecard Strategy Into Operational Terms
Financial
To succeed financially, how should we appear to our shareholders?
Customer
To succeed financially, how should we appear to our shareholders?
Internal Business Process
To satisfy our shareholders and customers, what businesses must we excel at?
Vision and Strategy
Learning And Growth
To succeed financially, how should we appear to our shareholders?
Source: Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,”
Harvard Business Review 74 (January-February): 76, 1996

20. THE PRIMARY OBJECTIVES OF BOSTON.COM CASE STUDY WERE:
1) Discuss the threat and opportunity presented by
the Internet to traditional media players.
2) Explore the strategic, operational, and financial
questions an incumbent faces when implementing
a Web initiative.
3) Evaluate the tensions between pursuing a “Get
Big Fast” versus a “Get it Right First” implemen-
tation strategy for incumbents who faces
cannibalization.

21. CEDIR Program
Summer 2001
Professor Ramiro Montealegre
Final Review

22. Stages of Entrepreneurial Evolution
Phase Phase Phase Phase 4
Bureaucracy
Complex
Complexity
Simple
Coordination
Achieving
liquidity
Control
Growing the
business
Expertise
Launching the
product/service
Building the
business concept
Young Organizational Age Mature

23. Competitive Positioning ECONOMIC POSITIONING
What business are we in?
Product/Service
Market What is our position?
Competition
Value Are we creating value for
all stakeholders
ECONOMIC POSITIONING
How will we make money?
Revenue model Cost of designing, developing
Cost model delivering, and maintaining
Asset Model each product/service?
Are we building and
safeguarding assets?
Business Performance
Operating margins
Operating Performance Budget performance
Process performance
Goals accomplishment
Corporate Performance Financial performance
Market share
Attract qualified employees,
Stakeholder loyalty partners, and investors
Image, and reputation
Enterprise Design
Structure Is the extended enterprise
Processes designed for:
People & Culture efficiency in decision making/action
Technology successful execution of strategy
Resources quick response to change

24. The Virtual Value Chains t o m e r
Content
Place
Space
Context
Infrastructure
Value Chain
Interface
Demand

25. Economic Positioning Revenue Model
How does (or will) the company achieve revenues from its products and services?
Product sales Advertising Subscription fee
Membership fee Commission Transaction fee
Service/consulting fee
Cost Model
How much does it cost to operate the company and execute its strategy?
People Advertising/Marketing/Sales Fees
IT infrastructure Materials and supplies Physical infrastructure
Asset Model
Are we building and safeguarding assets?
Financial assets
Physical assets
Intangible assets: Relationships Knowledge and expertise
Agility Strength of brand

26. CEDIR Program
Summer 2001
Professor Ramiro Montealegre
THANK YOU!!!