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The Delta Model - Reinventing Your Business Strategy
of: Arnoldo C. Hax
Springer-Verlag, 2009
ISBN: 9781441914804 , 245 Pages
Format: PDF, Read online
Copy protection: DRM
Preface
7
The Key Unanswered Questions
8
Acknowledgments
10
Contents
13
1 The Need for Reinventing Strategy
19
The Dangers of the Conventional Definition of Strategy Strategy as Rivalry
19
Reject Commoditization The Essence of Strategy Is to Achieve Customer Bonding
8
Managing in the Large and in the Small The Extended Enterprise and the Individualized Customer
21
The Selection of a Strategy and the Identification of the Required Competencies A Preview of the Delta Model
22
The Strategic Tasks of the Delta Model
23
The Haxioms
28
2 The Delta Model: Creating New Sources of Growth and Profitability in a Networked Economy
32
How to Achieve Customer Bonding: The Three Major Strategic Options in the Delta Model
32
Best Product
32
Strategic Positions of the Best Product Option
34
Low Cost
34
Differentiation
34
Best Product: A Limited Option
35
Towards a Stronger Bonding with the Customer
35
Total Customer Solution
36
Redefining the Customer Experience
37
Customer Integration
38
Horizontal Breadth
38
Toward a Customer Lock-In
39
System Lock-In
40
Three Ways to Get System Lock-In
41
Proprietary Standards
41
Dominant Exchange
42
Restricted Access
43
System Lock-In: A Highly Desirable Strategic Option
44
System Lock-In Carries an Ethical Responsibility
45
The Various Dimensions of the Triangle: A Summary
45
3 Customer Segmentation and Customer Value Proposition: The First Critical Task of Strategy
49
Behind the Customer Segmentation Process
49
Who Is the Customer?
50
Why Are Customers Different?
50
The Generic Dimensions of Segmentation
51
Segmentation According to Attitudes and the Willingness to Do Business with Us
51
The Case of Castrol
51
Definition of Customers' Tiers
52
Reflections on Segmentation Based on Customer Attitudes
54
Segmentation According to Different Degrees of Value Added
55
The Case of the Waste Management Company
55
Definition of Customers' Tiers
55
Identifying Incremental Solutions and Value-Delivery Mechanisms
57
Definition of Customers' Value Propositions
58
Reflections on Segmentation Based on Different Degrees of Value Added
58
Segmentation According to Customer Life Cycle
60
The Case of the Investment Retail Company (IRC)
60
Definition of Customers' Tiers
60
Identification of Incremental Solutions, Value Delivery Mechanisms and Customer Value Propositions
61
Reflection on the Segmentation Based on Customer Life Cycle
63
Segmentation According to Varying Buying Patterns
65
The Case of Singapore Airlines
65
Definition of Customer Tiers and Customers' Value Proposition
65
Reflections on Segmentation Based on Varying Buying Patterns
67
Segmentation According to Alignment with the Distribution Channel
69
The Case of Unilever Food Services
69
The Channels Are Critical: They Own the Customer
69
Definition of Customers' Tiers and Customers' Value Propositions
71
The Segmentation of UBF Distributors
73
Reflections on Segmentation According to Alignment with Distribution Channel
74
Some Pitfalls from Conventional Customer Segmentation
76
The Mobile Phone Business -- The Case of Singapore Telecommunications (SingTel)
76
The Mobile Phone Business ó The Case of Telefónica Móviles de Colombia
78
Corporate Banking -- The Case of Bank of Tokyo-Mitsubishi
80
The Steel Business -- The Case of Termium
81
The Test of the Quality of the Customer Value Proposition
83
Who Is the Most Attractive Customer?
86
The Need for a Customer Database
86
The Need for Experimentation
87
Notes
89
4 The Firm as a Bundle of Competencies: Understanding the Depth and the Breadth of Our Capabilities
90
Identifying the Bundle of Competencies in Practice
92
Investment Retail Company as a Bundle of Competencies
92
Singapore Airlines as a Bundle of Competencies
94
Delta Model and Competitiveness: A New Approach to Competitor Analysis
97
Sony Video Conferencing: An Analysis of Its Competencies
97
A Comparison of Polycom and Sony Video Conferencing: A Contrast of Competencies
99
Using the Delta Model to Assess the Merits of Possible Mergers and Acquisitions The Case of Cognos and IBM
102
Lessons from the Delta Model
106
Notes
106
5 The Mission of the Business: Capturing the Strategic Transformation
107
Strategy Means Change
107
The Mission of the Business
108
Planning Horizon
108
The Description of the Changes in the Business Scope
108
The Mission Statement
110
Strategic Transformation: What Others Have Done
110
The Case of the Chemical Coatings Company
110
Mission Statement of the Chemical Coatings Company
112
The Mission Statement
112
Statement of Products Scope and Services Scope
113
Statement of Customer Scope
113
Statement of End-User Scope
114
Statement of Distributor Scope
114
Statement of Complementor Scope
115
Statement of Geographical Scope
115
Statement of Unique Competencies Scope
116
The Case of Singapore Airlines
116
The Mission Statement
116
Statement of Product Scope
117
Statement of Services Scope
117
Statement of Customer Scope
117
Statement of Complementor Scope
117
Statement of Geographical Scope
118
Statement of Unique Competencies
118
Notes
119
6 The Development of the Strategic Agenda: A Call to Action
120
The Identification of the Strategic Thrusts
120
The Components of the Strategic Agenda
121
Strategic Thrusts
122
Organizational Structure
122
Business Processes
122
Performance
123
Culture
123
The Strategic Agenda as the Integrator of Strategy, Structure, Process, Performance The Case of Chemical Coatings Company
124
Identifying the Priorities of the Strategic Thrusts
127
Test for the Quality of the Strategic Agenda
129
The Case of Singapore Airlines
130
Strategic Challenges and Opportunities
131
Conclusion
131
7 Monitoring the Strategy Execution
134
The Intelligent Budget A Requirement for Proper Strategic Execution
134
The Balanced Scorecard
138
Strategy at the Center of the Balanced Scorecard
139
The Delta Model and the Balanced Scorecard
141
The Delta Model and the Adaptive Process
142
The Adaptive Processes and Aggregate Metrics
143
The Balanced Scorecard of the Chemical Coatings Company
146
Value Creation by Each Strategic Option: Empirical Evidence
148
Notes
154
8 Putting It All Together: How to Integrate the Critical Tasks of Strategy -- An Illustration
156
The Case of DMK International
156
Customer Segmentation and Customer Value Proposition of DMK
157
Tier 1 -- Exclusive Partner
158
The Business Dimension
158
The Value Proposition
159
The Challenges from the Value Proposition of Tier 1
160
Tier 2 -- Strategic Integrated Partner
161
Business Dimension
161
Customer Value Proposition
162
Challenges
162
Tier 3 -- Project Solution Seeker
163
Business Dimension
163
Customer Value Proposition
163
Challenges
164
Tier 4 -- Body Shoppers
165
Business Dimension
165
Customer Value Proposition
165
Challenges
166
The Firm as a Bundle of Competencies
166
The Challenges from the Existing and Desired Bundle of Competencies
168
The Mission of DMK
169
DMK -- Building the Outsourcing Model of the Future
169
Challenges from Changes in the Mission of DMK
170
The Strategic Agenda
171
The Intelligent Budget and the Balanced Scorecards
173
The Intelligent Budget
173
The Balanced Scorecards
174
The Four Perspectives
175
Notes
178
9 Managing Small- and Medium-Sized Enterprises (SMEs) Lessons from the Delta Model
179
The Importance of SMEs
179
The Challenges of Managing SMEs
179
The Best Product Strategy
180
The Low-Cost Positioning
180
The Differentiation Strategy
181
The Total Customer Solutions Strategy
183
Redefining the Customer Experience
183
Customer Integration
186
Horizontal Breadth
186
The System Lock-In Strategy
187
Restricted Access
189
Dominant Exchange
190
Proprietary Standard
191
Final Comments
191
10 The Challenges of Managing Not-for-Profit Organizations
194
Who Is the Customer?
194
Which are the Competencies?
195
Reflecting on the Strategic Challenges of the Not-for-Profit Organization
197
Best Product Strategy
197
Administrative Efficiency
198
Differentiation
198
The Total Customer Solutions Strategy
199
Attraction and Development of the Customer
199
Knowledge Transfer
200
Total Breadth of the Offering
200
System Lock-In Strategy
201
Channels of Delivery
202
System Support
202
Intellectual Value
203
The Unconventional Dynamics of Evolution of the Not-for-Profit Organizations
204
The Case of Singapore Economic Development Board An Application of the Delta Model to a Not-for-Profit Organization
206
Customer Segmentation
207
EDB's Existing and Desired Competencies
209
EDB's Mission
211
EDB's Strategic Agenda
212
Monitoring the Strategy Execution
214
The EDB Culture
214
Conclusion
215
Notes
216
11 A Comparison Among the Three Strategic Frameworks: Porter, the Resource-Based View of the Firm, and the Delta Model
217
Porters Competitive Positioning Framework
218
Low Cost or Differentiation Michael Porters Only Two Strategic Options
222
Porter's Winning Formula
225
Comments on Michael Porter's Frameworks
225
Caveats to Porter's Framework
226
The Resource-Based View of the Firm
226
Unique Competencies
227
Sustainability
227
Appropriability
227
Opportunism and Timing
228
Core Competencies and the Resource-Based View of the Firm
228
The Resource-Based View of the Firms Winning Formula
228
A Practical Framework of the Application of the Resource-Based View of the Firm
229
Some Caveats to the Resource-Based View of the Firm
229
Comparisons Among Porter, the Resource-Based View of the Firm, and the Delta Model Frameworks
230
Reinterpreting Porters Five-Forces Model Through the Delta Model: Thinking Out of the Box
232
Search for the 10X Force
233
Generate Barriers Around Your Customers
234
Your Competitors Are Not the Relevant Benchmarks
234
Develop and Nurture the Intrated Value Chain
234
Add a New Player; the Complementors
235
Fragmented Industries Offer Big Opportunities
235
Notes
236
About the Author
237
Index
239
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