Category: Competitive Strategy

Competitive Strategy is a plan allowing a company to take a set of coordinated actions that allow it to serve the needs of customers, in a more profitable manner, where the plan either cannot be copied by competitors or requires such a high cost to replicate that competitors choose not to replicate this competitive strategy. There are two levers to pull. First, is the willingness of customers to pay more. Second, is the cost to encourage this willingness. Each of these levers can be analyzed along four dimensions.

Is the service/product valuable?
Is the service/product scarce?
Does the provider have some asymmetry (advantage) in the way it provides the services?
Does it have a cost advantage?

A company is usually deploying some advantage that is allowing it to succeed. This is called a competitive advantage and the competitive strategy is the plan to deploy that advantage. A competitive advantage may be a single asset or skill. A single competitive advantage that may be lost, change or bought over time is not sustainable in the long term. The hardest competitive advantage to copy is one where a company takes a set of average assets and organizes them in way to produce superior returns. This competitive advantage, organizational, is harder to copy and more sustainable.

Media strategy for the oldest media companies

Media strategy for the oldest media companies

When we think of a media strategy, we usually think of non-media companies trying their hand at media or traditional networks and cable companies adapting to a streaming mobile era. Worldwide, the largest segment of media companies is traditional state-owned broadcasters, SOEs, whom collectively serve consumers across virtually every timezone. They also need a media strategy and face problems that are significantly different from that typically discussed.

Summary: State broadcasters need a new media strategy. The age of homogenous state broadcasters living off a guaranteed television license is not only over, but the license itself has stymied productivity, innovation, and creativity. A media strategy of locking in a market with legislation versus competitive products no longer works. Funding that media model with mandatory TV license fees is failing. Read more…

What is productivity​ and how can it be increased?

What is productivity​ and how can it be increased?

Every company wants to raise its productivity. We all want to raise our personal productivity. Most businesses understand the importance of productivity and believe we have a plan in place to do so.  We often assume doing more, producing more or completing more tasks increases our productivity. Despite sitting at the heart of competitive strategy, productivity is often misunderstood. We will define productivity and explain how it should be used to develop a strategy and manage the operations of a business.

Summary: Productivity is the ratio of the total value of output divided by the total input cost. A competitive strategy is a plan to deploy a competitive advantage to increase productivity. A company essentially pursues one of two strategies to increase productivity: focusing on the output value or focusing on the input costs. It is a common mistake to increase productivity in the short term by focusing on the wrong lever. The task of a COO is to organize the business to raise productivity by maximizing the lever the board has endorsed. 

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