Product Edge

#Strategy Friday #3 Edge Strategies

Welcome to my blog, where I discuss everything from Innovations and Strategy.

Today topic is about competitive strategy and corporate strategy.
More precisely on how resources and competencies align with customer requirement and corporate strategy.
This topic is still in review, but I decided to publish part of the reading which I am doing.
Companies to succeed need to align their offering with what costumers and consumer requirements.
By aligning their product edges, as defined in their book Alan Lewis and Dan McKone, corporations can gain more profit from their buyers.
By asking questions such as, what else is possible to do, and what current capabilities align with what the buyer search, companies can improve their marketing strategies.
This is seen in the first edge, product edge.

(taken from edgestrategybook.com)

Product Edge

In the book, it is given the example of Best Buys and Geek Squad, but in Europe, Best Buys (or better explained, as the customer support for installing a TV at home by the customer premises) is not present, so I’m going to provide the example of Apple and their Genius Bar.
Whenever buying an Apple Product, at an Apple Store, Apple provides some small technical knowhow introduction via their Genius Bar, a service which is complimentary but not obliged to offer so that can facilitate the implementation of their product in businesses. So from that they earn the happiness of new costumers which appreciate the sale of this complementary service.

#Journey Edge
#Enterprise Edge

Last but not least, is the Enterprise Edge, which in the book is defined as finding new revenue through existing capabilities. The example provided in the book is Toyota and the sale of its GPS Data to municipalities for traffic coordination.

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Open Innovation VS Closed Innovation

Welcome to my blog, in this blog i discuss about innovation, management and business strategy.

Today topic is a discussion between a concept in innovation that is defined as type of innovation strategy.

Nowadays, innovation discussion is clearly a critical dimension in any dynamic approach to business, as it allows businesses to achieve and defend competitive advantage.

Closed innovation, is the more classical approach to innovation, and in such, it develop patents, (intellectual property, licenses and grants) through formal means, and closed corporations.

Open Innovations is more related to the development of technology through adiacent and common techniques, such as outsourcing, competition establishing, and game theory.

Open Innovation, as defined by Dr. Henry Chesbrough in his book, is: “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. Open Innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas ideas, and internal and external paths to market, as they look to advance their technology. (Chesbrough, Open Innovation, p.2).”

Here is a graph of the two distinct type of innovations as explained in his book.

Graph explaining the different type of innovation strategy.

In the past i had the privilege of working for a short time period in both type of organisations, closed ones and open ones. I wont say which organisation for reason of privacy. But they were large organisations.

In both organisations the important aspect was the development of work in which was happening. I noticed immediately that in the open innovative business communication was more open and the setting of collaboration was more direct, whereas, the type of collaboration in closed innovation was more secretive, as patents and new research and development techniques were happening.

Personally i preferred the open innovative business, which allowed to learn new skills such as Wiki development and learning Marketing first hand and people skills. Working in open innovative companies is like working for a new startup, in which capital is limited, but passion is everywhere, and there is will to improve even when there are limited resources, whereas working in closed innovative companies is challenging as resources are present, but competition drives the work.

Today topic is more of a self reflection and less of a guide, compared to previous topics.

However, I will post a second article about Edge Strategy soon, as I am reading a book about it, and will be related to Corporate Strategy.

Strategy Friday

Hello and welcome back to Strategy Friday, the place where i discuss strategies theories for organisations.

Today topic is about the theory developed by professor Micheal Porter from Harvard Business School.

This theory is used widely by organisations as a contrast to the Blue Ocean Strategy.

I will discuss the Blue Ocean Strategy in my future post, but just keep in mind, that Blue Ocean Strategy is more about how to compete than what to compete.

Micheal Porter in his theory goes and analyses the functions of businesses from the Macro level, seeing the forces which influence the marketplace, and went to expand his theory also to Countries.

The main forces influencing business are: Supplier Relations, Buyer Power, Possible Product Substitutes and the Threat of new entry from other businesses, all influencing the competitive marketplace.

A useful picture is provided by Mindtools in their website, in which define the strategic tool and what to analyse.

Classical example of this analysis is used in the airline industry, however, is applicable also to other industries such as the mobile phone industry, where the supplier relations is the whole manufacturing supplier relations, thus for Apple can be the supply of chips from Foxconn, the threat of new entry is high as businesses enter the market developing new products constantly, the buyer power is also very high as, purchase is seen almost as a commodity in which one phone does not vary a lot from others, but to contrast that, Apple has a large brand conscious clientèle and to conclude the competitive landscape, is very competitive, thus having all functioning like a chain in which the gears run very fast.

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