Strategy is the difference between….
1
• Success and failure• Mediocrity and excellence• A great manager and average managers• Stumbling through life and moving ahead with purpose
Strategy is not planning.
2
• Mostly strategy is seen as an exercise to develop a planningdocument (actions with timeframes and assigned resources)
• Most of the strategic plans are budgets with words attached• Strategy is not planning, it is making an integrated set of choices
that position the firm to create sustainable advantage relative tocompetition and deliver superior financial returns
• Strategy is singular, only one strategy for a business, not a set ofstrategies
• Strategy directs you to identify which initiatives are importantand are likely to produce the results desired
• With such focus, planning is easy since the strategy enablescollective understanding on what is critical and what is not
Strategy is to focus with consistent choices.Strategy is to see distant things as if they were and close and to take a distanced view of close things. - Miyamoto Musashi
3
• Strategy is to prepare the future in order to be successful in the future• Strategy is to focus by making consistent choices on
«how to fulfill», «which» need of «whom», with «which» resources • Strategy is to decide «what not to do», as well as what to do
• The essence of Strategy is Choice
Pre-requisite for good strategy is honesty.The problem is not the problem, the problem is your attitude about the problem.
4
GOOD STRATEGY• Is honest in identifying the
challenges and the situation• Develops a cohesive
approach to overcome the challenges
• Focuses
BAD STRATEGY• Problems are glossed over• It is essentially wishful thinking• Urges achievement of a goal
but nothing else• Tries to meet conflicting goals
and ducks making hard chokes• Lost, confused, unsure, unclear,
perplexed, disoriented, bewildered
Good strategy from real life.World Heavyweight Championship Fight, Zaire, October 1974
5
Muhammed Ali Foreman
StatusFormer World
Champion
Defending World
Champion
SucessBase
Pass sucess was based
on being better
Present successbased on being
better
ConditionPast his peak in terms of being
betterAt his peak
Age 32 25
Situation
Making a comeback after years without competitive
fights
Getting better with each fight
Define with
Honesty
Ali defined his critical problem: No longer «float like a butterfly, sting like a bee» in a 15 rounds against a young opponent
Develop Strategy
An action plan to overcome his critical weakness: rope a dopeRope a dope: A technique in which the boxer assumes a
defensive stance against the ropes and absorbs an opponent's blows, hoping to exploit eventual tiredness or a mistake
Rope a dope: Any strategy where an apparently losing position is assumed in the hope of eventual victory
Result M.Ali wins by a knockout in Round 8, Foreman run out of steam
LessonEven the very best are eventually overtaken, if they are to
continue winning, they need a genuine strategy
Evolution of strategy.
6
• For its 2.500 years of history, strategy was one dimensional• Military leaders and statesmen were focused on avoiding wars
as fundamental military strategy• Business was focused on building entry barriers and monopolies
• In the past 50 years one dimensional structure disappeared• Strategy reached its prime• Many new ideas and solutions were spewed out• Concepts developed and then published• Strategy is now on the verge of reinventing itself
History of strategy (1/2)From the beginning to heydays (500 BC – 2000s)
7
The Art of War
Sun Tzu
500 BC 1834
On War
Carl von Clausewitz
1904
The History of the StandartOil Company
Ida Tarbell
1911
The Principles of Scientific
ManagementFrederick W.
Taylor
1968
Experience Curves and
Growth Share MatrixBruce
Henderson
1980 1985 1992 19961993
The Core Competence of
CorporationPrahalad and
Hammel
The Competitive Advantage
Michael Porter
The Balanced Scorecard
Kaplan and Norton
Reengineering The
CorporationMichael
Hammer and James Champy
Leading Change
John P. Kotter
BEGINNINGMONOPOLYSTRATEGIES
INDUSTRIALPROFICIENCY
STRATEGYHEYDAYS
Competitive Strategy Michael Porter
(*) ATKearney – History of Strategy
Leadership2009 - Start with Why Simon Sinek2011 - HBR’s 10 Must Reads
on Leadership Drucker, etc.2012 - The Strategist Cynthia Montgomery
No regret tactics2001 - Good to Great Jim Collins2002 - Lean Six Sigma Michael George2003 - The Loyalty Effect Frederick Reichheld2004 - The Toyota Way Jeffrey Liker
Slicing the strategic cake2001 - Profit from the Core Zook and Allen2005 - Blue Ocean Strategy Kim and Mauborgne2013 - Playing to Win Lafley and Martin
Agility2008 - Fast Strategy Doz and Kosonen2009 - The Upside of Turbulence Donald Sull
History of strategy (2/2)Era of strategic proliferation (2000s - …)
8
1994 - Hyper-competition Richard D’Aveni1994 - Creating Value in the
Multibusiness Company Alexander, Campbell, Goold1997 - The War For Talent Michaels, Handfield, Jones & Axelrod1997 - Cannibals with Forks Elkington2000 - Blown to Bits Evans and Wurster2001 - The Internet Bubble Perkins and Perkins2005 - The New Age of Innovation Prahalad and Krishnan2005 - The Wisdom of Crowds James Surowieki2005 - The World is Flat Friedman2008 - Wikinomics Tapscott and Williams2010 - Winning in Emerging Markets Khanna and Palepu2010 - The Big Short Michael Lewis2013 - Big Data Mayer, Schönberger and Cukier
2008-09 - Design Thinking and Change by Design Tim Brown2012 - Accelerate John Kotter2013 - The End of Competitive Advantage Rita Gunther MacGrath
Ersatz StrategiesMilestones
Overloads
(*) ATKearney – History of Strategy
Traditional: Match strategy to resources and capabilities. Strategic intent: Have ambitions beyond current resources and capabilities.
9
Once tiny Japanese companies
develop strategic intent to beat
their much larger US and
European rivals
Once tiny S. Korean companies
develop strategic intent to beat
their much larger Japanese rivals
Once tiny Chinese companies
develop strategic intent to beat
their much larger Asian rivals
1960s
1980s
2000s
Sony Mission Statement (1950): Become the company most known for changing the worldwide poor-quality image of Japanese products
Execution is as important as strategic thinking.A good plan violently executed now is better than a perfect plan executed next week. – George S. Patton A bad plan that is well executed will yield much better results than a good plan that is poorly executed. – Otto Von Bismark
10
• An effective process• Incorporate different functions•Acquire different perspectives•Consensus on decisions
• Knowledge based decisions (Current situation analysis)• Consistency of the leader• Creativity• Principles: Objective-tool compliance, clarity of focus, dynamism, and integrity
while
developi
ng
• Agility
• Deployment throughout the organization
• Systematic follow up and evaluation
• Updates on changing conditions
(Only weak plans do not require update and change)
while
executin
g
Tools of strategy
11
1960 1970 1990
• One of the first strategic tools
• Capture market opportunities via company strengths
• Lessen internal weaknesses to avoid risks
SWOTAnalysis
ScenarioAnalysis
• To test the unpredictable future with consistent scenarios
BCG Growth Matrix
• Many acquisitions but financial difficulties
• To identify areas to invest and divest
Value Chain
Analysis• Analysis on value
creation potential of each step in value chain
Five Force Industry Analysis
• Porter model• More sophisticated
version of SWOT forenvironment analysis
• Barriers to entry, competition, suppliers, customers and substitutes
PIMSAnalysis
• Harvard• Database on 600
business• Factors effecting
profit and effectivity level
• Sensitivity of ROI to market changes
GE Market Attractiveness
Matrix
• Growth rate and relative market share is not enough for investment
• Long term profitability
7SFramework
Value Based
Planning
• Financial based• To maximize
shareholder value
1980
BalancedScorecard
• Financial goals in not enough
• Balanced and related goals on; financial results, customers, processes and learning and development
Strategic Option
Analysis• A group of options
under uncertainty• Taking fundamental
decisions to executive strategy.
Economic Value Added
• Accounting based evaluations are not satisfactory
• Value added is calculated (including cost of capital)
Core Competence
Analysis
• 4 principles• Business processes• Cortical processes to strategic
competencies and continuously value creation to the customers
• Strategic investments• CEO is the responsible
• McKinsey• Strategic thought solely
is not enough• Strategy, Structure
Style, Systems, Staff, Skill, Shared Values
Porter’s Five Forces Model of Competition
12
DETERMINANTS of SUPPLIER POWER• Supplier concentration• Availability of substitute inputs• Importance of suppliers input to buyer• Suppliers product differentiation• Importance of industry to suppliers• Buyers switching cost to other input• Suppliers threat of forward integration• Buyers threat of backward integration
THREAT OF NEW ENTRANTS• Barriers to entry
• Economies of scale• Product differentiation• Capital requirements• Switching cost to buyers• Access to distribution channels• Government policies
• Incumbents' defense of market share• Industry growth rate
DETERMINANTS of BUYER POWER• Number of buyers relative to sellers• Product differentiation• Switching costs to use other product• Buyers profit margin• Buyers use of multiple sources• Buyers threat of backward integration• Sellers threat of forward integration• Importance of product to the buyer• Buyers volume
THREAT of SUBSTITUTE PRODUCTS• Relative price of substitute• Relative quality of substitute• Switching cots of buyers
COMPETITION EXISTING COMPANIES• Number of compettors• Relative size of competitors (balance)• Industry growth rate• Fixed cost vs. variable costs• Product differentiation• Capacity augmented in large increments
• Buyers switching cost• Diversity of competitors• Exit barriers
Example: Economies of scope
13
• Hired Michael Eisner. Eisner’s theory;• People will pay a premium price for extraordinary entertainment.
We have the necessary resources to create extraordinary entertainment. Let’s redeploy our resources in a different way and offer something extraordinary to people.
million USD 1984
Theme park operations 186
Consumer Products 53
Filmed Entertainment 2
Market Cap 2.000
1989 1994
787 Increased admission prices at theme parks
845 Focused on movie studios (character development)
28.000Diversified into television (ABC), hotels, retail stores, sport team, cruise line, publishing, consumer, products, licensing, etc.
Example: How to use core competencies
14
HONDA
Manufacturing capabilities Innovation culture
Lightweight, high revving reliable engines
Core competencies
Core products
Generators Marine Vehicles Yard Care
Personelwatercraft
Boats
Trucks
Automobiles
4 Wheel off-road
Motorcycles
Lawn movers
Snow blowers
(*) Knowledge strategies LLC
Examples: Blue ocean strategy
15
• In a decade became one of the largest and profitable business information provider• Until Bloomberg; Reuters, Dow Jones and Telerate dominated the industry• The industry focused on purchasers: IT managers - standardized systems - easier• Bloomberg focused on traders and analysts, not IT managers• Systems designed for traders; easy to use terminals, labeled keyboards, two monitors• Also focused to traders personal life - add information and purchasing services• The traders and analysts force IT managers to purchase Bloomberg terminals
• Insulin - diabetics - regulate the level of sugar - industry focus key influencers: doctors• Purer insulin - achieved in 1980s - exact copy of human insulin• Limited progress on purity - major parameter of competition• Novo Nordisk break away from the competition by focusing on patients
• Challenges in administering • NovoPen: First user-friendly insulin delivery solution - pen to inject insulin with ease• NovoLet: Pre-filled disposable insulin injection pen with a dosing system• Innovo: Integrated electronic memory and cartridge based delivery system
• Transformed the company from an insulin producer to a diabetes care company• Today, almost thirty years since its initial move, %70 percent of Novo’s total turnover
Example: Economies of scale
16
• The reduction of per-unit costs through an increase in production volume• Diminishing marginal cost, decrease in a firm's marginal costs of production
• Changes on a macroeconomic level (reduced borrowing costs, newinfrastructure, etc.)
• Improvements on a business-specific level• A firm can realize economies of scale, or diseconomies of scale, based on
variables outside of its control• BIC PEN
• A large scale production facility• Cost efficiency as fundamental approach, manufactures the cheapest pens• Aim to fulfill global pen demand• Discounted prices for promotional pens (for penetration)• The same strategy utilized for lighters
Example: Economies of speed
17
• SONY developed the Betamax video format which was of superior quality• Most broadcasting companies preferred to utilize Betamax standard in storing
their archives• SONY wanted to utilize this superior standard to sell more SONY devices to
customers• JVC came up with the VHS standard and chose to speed up its adoption by
licensing to other manufacturers and by reducing its price• This strategy resulted in faster and broader sales of VHS devices• Most new film releases chose the VHS standard at the initial releases due to a
larger consumer base that was established• Therefore, SONY lost the war with a superior quality product !!
Example: Winner takes it all
18
• A company (usually in quickly growing environment) should spend a lot of money today toachieve the top spot in market share, because they will likely keep that spot in the future• Being number one today - you will continue to be number one in the future• Customers like to continue to buy from the leading vendor• Less spending on advertising - become more profitable over time• Suppliers start giving you better deals in order to get sold on your service (environment)
• The classic example of someone “winner takes all” strategy is Amazon.com• Amazon is now 20+ years old - it was very unprofitable for half of that time• Critics: It was wasting money in a space (e-commerce) that had very few barriers to entry• Theory: Someone could start a website - sell a product on Amazon for less money - pressuring margins• Reality: Amazon’s strategy did pay off - they mastered the ability to have great logistics and
infrastructure for delivery - attracted virtually every good that could be sold under their umbrella• No competitor (on a scale that they operated) every really emerged, - they have so much valuable
data on their customers - it will be very difficult to knock them off anytime soon
• AirBNB / Zappos.com / BİM
Don’t make strategy harder than it needs to be.
19
• Strategy is at some
level about all
those
• A satisfactory
result can not be
achieved with
analysis alone, or
big picture alone,
or changes alone
• Work must be done
on all of them
Too much concentration on
the analysis: SWOT, business
(customer, competitor, etc.)
analysis, environment
analysis, financial evaluations, etc.
Strategy must be; conceptual,
future-oriented and broad.
Do not mix strategy
with tactics.
Strategy must be developed when
there is a need for a new direction or
before a change in the direction.
DON’T NOT NECESSARILY
Strategy must be defined by answering a few questions.Any intelligent fool can make things bigger and more complex… It takes a touch of genius and a lot of courage to move in the opposite direction. – Albert Einstein
20
• What are your basic aspirations for the organization and the goals that can show the progress?
• From the potential field available, where will you choose to play and not play?
• In the chosen place to play, how will you win against the competitors?
• What capabilities are necessary to develop and maintain to win in the chosen place?
• What management systems are necessary to develop and maintain the key capabilities?
Do not follow the list, just iterate.
21
• Answers must be consistent with one another and reinforce one another• From where to start?
• Starting at the top with mission/vision exercise : Difficult to create a solidaspiration without knowing «Where to Play» and «How to Win». Any mission orvision will do when you don’t thought «Where to Play» or «How to Win».
• Starting from «Where to Play» and «How to Win» : Without considering«aspirations and goals», you may end up with a strategy that is effective, but isn’tsomething you would actually want
• If you want to create a strategy, you have to iterate• Think about «aspirations and goals»• Then think about «where to play» and «how to win»»• Then back to «aspirations and goals» to check and modify• Then to «capabilities» and «management systems» to check whether it is doable• Then back up again to modify accordingly
The rate of change today is much different than in the past.The World Is Flat, Thomas Friedman (*)
22
• “Whenever civilization has gone through one of these disruptive, dislocatingtechnical revolutions—like Gutenberg’s introduction of the printing press—thewhole world has changed in profound ways”
• “….This flattening process is happening at warp speed and directly or indirectlytouching a lot more people on the planet at once. The faster and broader thistransition to a new era, the more likely is the potential of disruption.”
• “The businesses, institutions and nation states that are now facing theseinevitable, even predictable, changes but lack the leadership, flexibility andimagination to adapt—not because they are not smart or aware, but because thespeed of change is simply overwhelming them.”
• This rapid flattening is creating a new environment that called “VUCA”
Dimensions of VUCA environment.
24
How much do you know about the situation
How well can you
predict the outcome of
your actions
- +
+
COMPLEXITYMultiplicity of Key Decision Factors
VOLATILITYRate of Change
AMBIGUITYLack of Clarity on the
Ongoing Events
UNCERTAINTYUnclear About the
Present Situation and Future Outcomes
Management’s role in strategy changes as the business environment change.
25
• Management’s role is not only to organize work, but to direct passionand purpose
• Few strategies come from the top and that most emerge changes ourview of ‘strategizing’. The role of senior manager changes from ‘decidingwhat to do and finding someone else to do it’ to ‘coach, filter, enabler’. -Henry Mintzberg (Emergent Strategy)
• In an increasingly unstable and rapidly changing business world (VUCA)HR and talent management professionals need to change the focus andmethods of leadership development
How should leaders approach to VUCA environment?
26
Complexity counter with clarity Chaos comes swift and hard.
Leaders, who can quickly and clearly tune into all of the minutiae associated with the
chaos, can make better, more informed business decisions
Volatility counter with vision
Vision is even more vital in turbulent times. Leaders with a clear vision of where they
want their organizations to be in 3-5 years can better weather volatile environmental changes such as economic downturns or
new competition in their markets
Ambiguity counter with agilityThe ability to communicate across
the organization and to move quickly to apply solutions
Uncertainty counter with understandingLeaders must learn to look and listen
beyond their functional areas of expertise to make sense of the volatility and to lead with vision. This requires communication with all levels of employees in the organization, and to develop and demonstrate teamwork and
collaboration skills
(*) UNC – Developing Leaders in VUCA Environment
• You never actually win, but are always questing, gaining new skills andresources along the way and continually seeking the next challenge
• “Prediction and being 'right' will be less important than reacting quicklyand taking corrective action.” - Rita Gunther McGrath
• Uncertainty and need for adaptation is increasing• We must discard the fantasies of false certainty and learn to become less
wrong over time• Strategy must be updated through a Bayesian process where there are
no certainties—only probabilities—that evolve and change in real time
Strategy is a never ending game.In preparing for battle I have always found that plans are useless, but planning is indispensable. - Dwight D. Eisenhower
27
Annual strategy making or always on strategy.
28(*) BCG Analysis
NATURE
STRENGTH
S
CHALLENG
ES
• Builds on existing strategic
plans
• Provides broad coverage, keeps
full strategy in view
• Brings deep understanding of
individual issues
• Addresses disruptive events
• Consolidating decisions and
plans made throughout the year
• Aligning business unit strategies
• Treating individual issues
• Making decisions
• Driving implementation
• Not effective in preemptive issue
identification and resolution
• Does not allow for iterations
• If not applied systematically, can
result in a chaotic, piecemeal
strategy
ANNUAL STRATEGY MAKING
A process that sets the overall
strategic direction of the company
and aligns strategic shareholders
(functions)
ALWAYS-ON STRATEGY
A process to identify and resolve
issues and manage the
implementation of specific strategic
initiatives
What and where to decide.
29
• Minor decisions decentralized, major decisions centralized• However the centralized decisions vary according to the
parenting structure
Six major parenting structures and parental decision rights.
(*) BCG Analysis
Select key executivesApprove major …..
Set major ….. targets
Challenge ….. planningAnnual performance evaluation
Encourage …..
Set policies + processes
Drive ……
Monitor detailed plans + budgets
30
Parenting Type
Control Type
Hands-off
Owner
Financial
Sponsor
Family
Builder
Strategic
Guide
Functional
Leader
Hands-on
Manager
Board Financial Strategic + Fin. Strategic Functional Operational
Investments
Financial
Financial
Financial
Financial
Synergy
Financial+Strategic
Strategic
Sharing BestPractices
FunctionalDevelopments
Decisions
Improvement initiatives
Who will increase the value must be the fundamental selection criteria in parenting.
31(*) Ashridge portfolio display
Potential for the parent to add value to the business
Potential for value destruction
from misfit between needs of the business and
parent’s corporate management style
Role of the center is influenced by the portfolio structure.
32
Portfolio Type
Degree of PortfolioDiversity
Model of the Center
Degree of Intervention
Unrelated
High. Businesses have little in common
Performance managing center• Manages by
financial objectives• Select and
motivates senior managers
• Challenges business unit strategies
• Allocates resources
Diversified
Moderate. Businesses are loosely
related
Portfolio developing center• Identifies common
opportunities and potential for growth
• Develops platforms for collaboration
• Helps developing business unit strategies
• Drives strategic initiatives
Related
Low. Businesses are
related
Synergy driving center• Encourages the
exchange of best practices
• Facilities internal cooperation
• Develops common tools and systems for business units
• Creates shared strategic resources
Integrated
None. A single business or a cluster of closely
related businesses
Integrated center• Directly steers
operating units and businesses
• Globally coordinates operations and functions across regions, products and businesses
(*) BCG Analysis
Role of the center is to; give business support, improve operating capabilities and oversee.
33
BUSINESS SUPPORT
Corporate vision and strategy
Portfolio management and resource allocation
Performance management
Support for global expansion
Provide shared services
Synergy and knowledge sharing
Groupwide initiatives and projects
Brand support and portfolio development
Culture, leadership and HR
management
Guide and develop business
units
IMPROVE OPERATING CAPABILITIES
Governance and risk control
Internal Control
Audit
OVERSEE
The defined roles must be shaped by management styles which is also shaped by internal and external situation.
34
Strategic LeadershipOrientation
Control andAccountability
Human
Financial results
Operation
Corporate Culture and Values
Entrepreneurship and innovation
Team work
Competitive
Discipline and operational excellence
CompetencyDevelopment
Process based
Develop within
Attract the best
Outsource
RelationFocus
Business partners
Competitive
Customer and channel
Regulatory and controlling agencies
Visionary
Command chain
Participatory
Trends in strategy (1/4)
35
Prioritizing Short-Term Goals over Long-Term
Objectives
• Traditionally strategic plans - Long time horizons - 3 to 5 years• Advance of technology, widening competitive landscape, pressure on
margins – less weight to long term plans• Leaders : agility in mind - little room for long-term focus• Annual goals and planning vs. quarterly strategic targets• Quarterly planning = better pulse on business success + course-
correct strategy when necessary
Increased Focus on Mergers and
Acquisitions Activities
• More frequent M&A - current economic climate• Consolidation : a better cost structure to increase economies of scale• Venture capital is refocusing more on revenue numbers in valuation,
rather than user growth. Technology companies whose revenues do not match with desired valuations will shop their company to bigger players.
Trends in strategy (2/4)
36
Increased Focus on Technology Investments
• Business transition to the cloud - days of legacy systems and manual processes are closing
• Significant portion of strategic planning time to IT collaboration (functions technology upgrades)
• As more departments use software solutions to increase productivity, the creation of an integrated technology ecosystem
Increased Focus on the Mobile
Ecosystem
• Millennials larger percentage of the consumer market - companies altering marketing and operational processes to fit this generation’s buying behaviors
• 86% of millennials own a smartphone• Mobile search traffic eclipse desktop search traffic as of May 2015
(press release from Google)
Trends in strategy (3/4)
37
All Strategy will be Informed by
Data
• Big data is no longer a buzzword• Companies have access to data, all housed in different software
platform• Business Intelligence tools make sense of all the information.• Strategic planning will no longer rely on gut feeling or conjecture, but
rather will be backed by empirical data• Companies hiring more data scientists to help strategic planning
Trends in strategy (4/4)Biomimicry: Strategy lessons from nature and biology
38(*) BCG Analysis
• Redundancy: Duplication of elements may be inefficient, but can provide a bufferagainst the unexpected
• Heterogeneity: Different types of elements make it possible to react to unexpectedchange
• Modularity: Separate modules, loosely linked, can act like circuit breakers to helpprevent the collapse of system
• Adaptation: Rapid adjustment to new circumstances protects a system against negativeeffects of change
• Prudence: Downside scenarios can often be plausibly envisioned. Invest in simulationmodels and contingency plans
• Embeddedness: Most systems are embedded in larger systems. Reciprocity and mutualbenefit between different levels are essential for stability and continuity
Dr. ArgüdenARGE Danışmanlık/ConsultingArgüden Governance Academy
DrArguden.netARGE.comArgudenAcademy.org
Dr. ArgüdenARGE ConsultingArgüden Governance Academy
Thank you
Dr. Yılmaz Argüdenwww.arguden.net
Example: Blue ocean strategy.
42
• In a decade Bloomberg became one of the largest and most profitable business information providers• Until Bloomberg; Reuters, Dow Jones and Telerate dominated the industry• The industry focused on purchasers «IT managers» who valued standardized systems, which made their
lives easier.• Bloomberg saw that it was traders and analysts, not IT managers, who is important• So Bloomberg designed a system specifically to offer traders a leap in value, one with easy-to-use
terminals and keyboards labeled with familiar financial terms. The systems also have two flat-panelmonitors so that traders can see all the information they need at once and built-in analytic capabilitywith the press of a button
• With this shift in focus Bloomberg could also see the paradox of traders personal lives. They havetremendous income but work such long hours that they have little time to spend it. Bloomberg decidedto add information and purchasing services aimed at enhancing traders’ personal lives
• By shifting its focus upstream from purchasers to users, Bloomberg created a value curve that wasradically different from anything the industry had seen before. The traders and analysts wielded theirpower within their firms to force IT managers to purchase Bloomberg terminals
Example: Blue ocean strategy.
43
• Insulin is used by diabetics to regulate the level of sugar in their blood• Historically, the insulin industry focused its attention on the key influencers: doctors• The industry geared its efforts to produce purer insulin which had improved dramatically by 1980s• Novo had already created insulin that was a chemically exact copy of human insulin• Limited progress could be made further in purity of insulin - major parameter of competition• Novo Nordisk break away from the competition by focusing on patients
• Novo Nordisk found that insulin, which was supplied to in vials has challenges in administering• NovoPen: First user-friendly insulin delivery solution - removes the hassle and embarrassment of
administering insulin - Patients could take the pen with them and inject insulin with ease andconvenience without the complexity of syringes and needles
• NovoLet: Pre-filled disposable insulin injection pen with a dosing system• Innovo: Integrated electronic memory and cartridge based delivery system
• Transformed the company from an insulin producer to a diabetes care company• Today, almost thirty years since its initial move, Novo Nordisk remains the global leader in diabetes care,
with some 70 percent of its total turnover coming from this offering