MARKET ANALYSIS, STRATEGY & PLANNING

The Digital Economy is rapidly transforming the way organisations operate and is challenging the market incumbency of many traditionally large and successful businesses. It is at times like this that the organisations that can clearly identify and annunciate a forward looking, effective and consistent strategy to their people and their economic ecosystem will take greatest advantage from this market opportunity.

With this in mind, Galbraith & Co. have developed a fresh and innovative approach to strategic planning. We call this methodology StrategyINSIGHT and it is based on the critical focus of gaining and maintaining market leadership.

• Market leadership offers high, long-term returns and greater security from competition. Strategies should seek out new leadership opportunities rather than rely on head-to-head competition with incumbents over small differentials in market share.
• In an era or digital products and applications there are now an ever-growing set of market leadership opportunities that would enable a business to move away from maturing and highly competitive environments. Businesses should aim to gain leadership in numerous but tightly related sectors.
• To win these positions in fast-growing markets, business must have a relatively unique value proposition that other entrants cannot match. This means a high degree of internal alignment with profitable customer segments, and a commitment to ongoing incremental innovation.

To achieve this we have adopted and enhanced a number of the world's best business strategy and planning tools developed by some of the world's leading business thinkers to provide a simple yet powerful strategic planning methodology that is unique in its field.

A NEW APPROACH TO STRATEGIC PLANNING

Galbraith & Co. can now offer our clients the opportunity to gain competitive advantage by utilising, in a simple consistent framework, some of the most powerful business strategy and planning tools developed over the last two decades.

StrategyINSIGHT utilises three of the most crucial breakthroughs in business strategy in the last two decades as building blocks for this methodology, namely:

• Michael Porter's Competitive Strategy¹ that helps managers locate and identify the best competitive positions within their marketplaces and industries, that can offer sustained levels of profitability;
• Robert Kaplan's Strategy Map² that translates these unique competitive positions into a visual format of a strategy on a page that clearly portrays how key processes and systems must align to the new competitive opportunities; and finally
• Clayton Christensen's & Michael Raynor's method of Sustaining Innovation³ combines the business's competitive attributes into an interlocking bundle of features, the basis for a program of incremental technological improvements that can capture market share.

StrategyINSIGHT integrates these powerful planning techniques in to a seamless, easy-to-apply, medium to long term strategic planning program that even strategic planning novices can adopt.

Asia Pacific marketplaces are changing rapidly through the combined effects of technological change and increasing wealth and investment inflows. Countries in the region are now developing their own domestic markets for devices and applications.

Each of these tools taken alone is insufficient for the task of developing and communicating a comprehensive business strategy.

Our integrated approach has particular benefits for strategic planners:

• The specificity of market leadership positions makes it easier to drive consistency and alignment through all parts of the Plan.
• Strategy formulation and execution are linked from the outset, via the Strategy Map;
• The exercise if highly graphic which aids understanding and can be used as a prototype with senior management to stimulate feedback and comment;
• Innovation is built into the design and is not an afterthought; and
• It is relatively speedy and inexpensive!

STAGE 1

Conduct an analysis of the local marketplace. Using Porter's Five Competitive Forces we identify the changing dynamics of the local marketplace and industry in terms of new entrants; nature of existing competition and rivalry; the advent of new or substitute products; and the bargaining power of both customers and suppliers. The output is a list of sweet spots, emerging market and/or product segments that offer opportunities for market leadership while still meeting revenue expectations.

STAGE 2

Develop a Go-To-Market Strategy for the company with primacy given to finding adjacent segments (those sectors where the company has a technology and product lead; has established commercial relationships; and can quickly achieve a level of market leadership, without resort to costly competition). Entry Strategies are then devised for New and Emerging segments, the longer range bets; and for Organic Growth in Competitive segments.

STAGE 3

Use the Market Leadership Positions to calculate relevant industry based returns. Each industry will have its own quite often fixed distribution of market and industry shares. Incumbent market leaders will often have 50-60 per cent of the market with second and third having between them another 20-30 per cent. The Strategy identifies the prospective market position for the company in each market segment and this is then translated into financial targets.

STAGE 4

The Go-To-Market Strategy and its targets are then translated to the Outcomes Perspective of the Strategy Map. The translation into the graphic and numerical form of the Strategy Map acts as a rigorous check on the assumptions of the initial marketplace analysis, and allows for detailed target setting. Financial targets are disaggregated to each of the then Go to market Strategies, and then onto segments within each. Each segment can display financial targets and information about products or customer requirements.

STAGE 5

Over the last decade, enterprise resource programs have consolidated and re configured the basic transaction processes (financial management, human resources, customer contact, etc) that constitute the back end of organizations. Design workshops are seeing the deployment of intelligent, knowledge management tools and social media that can both integrate many of the Enterprise Resource Planning (ERP) programs and vastly improve communication and collaboration across the organization.

A two day workshop with the senior executive team develops the detail of the Strategy Map and new systems and capabilities are strategically aligned each of the Go-To-Market strategies: Adjacent, New and Emerging and Organic Growth in Incumbent segments. Alignment of processes with Outcomes on the map is to direct resources, along with management and staff attention, to a handful of must-do-wells linked to the Got To Market Strategies. This is the backbone of the Execution Plan.

STAGE 6

The Sustained Innovation Design. The Map takes the form of a prototype of the new business and the management team works it through several iterations. Innovation is an integral part of this prototyping. Porters Activity Systems are used to identify up to eight, interlocking competitive internal advantages. This competitive cluster forms the basis to innovate to deliver even more value to customer segments.

Please contact us if you would like additional information or would like to speak with our specialists.

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¹The Five Competitive Forces That Shape Strategy: Harvard Business Review, January 2008. http://en.wikipedia.org/wiki/Michael_Porter.

²Strategy Maps: Converting Intangible Assets into Tangible Outcome: Harvard Business School Press, 2004. http://en.wikipedia.org/wiki/Robert_S._Kaplan.

³The Innovator's Solution: Creating and Sustaining Successful Growth: Harvard Business School Press, 2003. http://en.wikipedia.org/wiki/Clayton_M._Christensen.