-Nikunj Barnwal
Two fundamental paradigms during
the last two decades
Strategy Formulation
and Implementation
Porter’s Value Chain
Porter’s Winning Formula
Pick an attractive industry.
(Attractive means one in which a
business can achieve as close to a
monopolistic position as possible)
Achieve sustainable advantages by
beating their competitors in as many
key activities as possible.
So STRATEGY IS WAR!!!
Resources-Based View
Value Chain- Central focus of
strategic direction
Looks for value derived from
resources, capabilities and
competencies
Firm’s development of resources and
capabilities- Central focus of
competitive advantage
Four Key Components to attain and
sustain Competitive Advantage
When Resources and Capabilities
generate unique core competencies
When substitution and imitation is
minimized
When benefits are retained and not
appropriated by competitors
When Cost of the resources and
capabilities doesn’t offset the
resulting benefits
So RBV’s Winning Formula
Develop resources and capabilities
(unique, valuable and non-tradable)
Prevent imitation or substitution
Prevent hold-up and slack conditions
Cost doesn’t offset the resulting
benefits
Where goes the Customer???
The importance of customer missed
by both the frameworks.
In Porter’s model, customer has been
described as one of the five forces
whose bargaining power should be
resisted/diminished.
The Delta Model
∆ stands for transformation/change
Bonding- Central focus of strategic
direction
Bonding with customers as well as
complementors
Business Models: Three Distinct
Strategic Options
System Lock-In
System Lock-in
•Business Scope
•Core Competencies
Industry Structure
Competitive Positioning
•External factors determining
•Activities that drive profitability industry attractiveness
Business
The Strategic agenda
Customer Targeting
Adaptive Process
Strategic Agenda
References:
www.12manage.com
MIT Sloan School of Management
Working Paper 4261-02
September 2002
The Delta Model -- Toward a
Unified
Framework of Strategy
Arnoldo C. Hax and Dean L. Wilde II