Business Strategy

Management Strategy

By:

Trevor Farquharson

100074094

A report submitted to:

Dr. Conor Vibert

Rhodes Hall - 314

Acadia University

As part of the BUSI 4953

Business Strategy Course

November 17, 2006

The article, Are You Sure You Have a Strategy? By Hambrick and Fredrickson explains that many "strategies" these days are no more than statements that involve a part of strategy but are no more a strategy than is a vague statement like, "We're pursuing a global strategy." According to the article, a strategy is a central, integrated, externally oriented concept of how the business will achieve its objectives. When upper levels of management have a faulty, incomplete, or poorly articulated strategy, the result is commonly a huge waste of time and resources on activities that are not unified, going in slightly opposing directions. Also, having a proper strategy does not mean that any company is all set to go. Properly articulated objectives and a company mission are involved with the strategy but are also completely removed from it in that they are a guide to the strategy. There are five key elements to a good strategy: arenas, vehicles, differentiators, staging, and economic logic. The first three of these essential elements of strategy might be considered the overall plan of a strategy, whereas the last two are more factors that are just as important, but really stem from the first three (Hambrick & Fredrickson, 2001).

The arenas have a different meaning for different types of businesses which I will illustrate shortly, however, the basic question to answer for this element of strategy is, where will we (the company) be active? / What business will we be in? When answering the questions in each of these stages, the answers should be as specific as possible in terms of whatever it is that the arena encompasses for a particular business, product category, geographic areas, or even value-adding strategies (Hambrick & Fredrickson, 2001).

The vehicles again have slightly different meanings depending on the context and the type of business involved. The question to be answered, in general, is how will we get there? Some things to consider are the following: does the company have what it needs internally? If not, how will it reach out to achieve the presence it desires in the market segment? Possibly through a joint venture with another company, maybe by acquiring another company, or maybe through some form of licensing (Hambrick & Fredrickson, 2001).

Differentiators are basically the ways in which a firm can make itself different enough from the competition that it can win in the marketplace. It does not necessarily mean that a firm has to max out on any one category of differentiation. Often times, it is the proper mix of mid range differentiators that can make a company successful. Also, something strategists should keep in mind when deciding how exactly to differentiate their firm is that certain differentiators support each other and if they want to take advantage of these possible synergies, they should focus as much as possible on those differentiators. Finally, the differentiators must also be chosen with the firms' competencies and abilities in mind as well as the important selling points that are likely to catch the most consumers in the chosen arena (Hambrick & Fredrickson, 2001).

Staging is a part of strategy that is often neglected, but has the power to make or break a strategy. Staging is basically deciding on the order of moves as well as the timing and speed of these moves to make reaching the main goal of the strategy as realistic as possible. Factors to keep in mind when planning this important part of the strategy would be the limitations on resources of the firm, the urgency of each separate element in the strategy, and if certain elements need to be completed (or partially completed) to facilitate / allow other elements of the strategy to come together (Hambrick & Fredrickson, 2001).

Economic logic is normally the part of strategy that very few overlook because it has to do with profits. In short, the question to be answered here is, how will we make a profit? This does not mean providing countless reasons why it will sell or why you will be able to produce the product for the lowest price. It means having a more vast and general idea of how your pricing will work for your product. For example, you might be able to use a premium pricing strategy if your product is valued by consumers as much better than the competitors or if there are no competitors (Hambrick & Fredrickson, 2001).

Jean-Louis Drapeau explained the case for Nanoptix Inc. where he works as the VP of Sales and Marketing. In terms of the arenas, the company is broadly involved in the technology sector. More specifically, it designs and manufactures transactional peripherals and thermal direct printers. These products are targeted mostly towards casinos, lottery companies, point-of-sale kiosks, and transportation industries (Drapeau, 2006).

In terms of vehicles, the company realizes that there are certain parts of the value-chain where it is most effective and it uses strategic partnerships to assist it in the places where it is not as strong. The firm also makes use of its core competencies, namely sales strategies and R&D coupled with outsourced manufacturing to effectively reach all its customers with their products (Drapeau, 2006).

Nanoptix differentiates itself by being strongly focused on its strong technical R&D skills. To build a sustainable business, the company has spearheaded the arduous task of diversifying the products and markets. Also, unlike most firms in the industry who spend much longer worrying about registering / patenting their intellectual property, Nanoptix tries instead to bring new technology to customers as quickly as possible at a reasonable price. The company is committed to its customers not only during the design phase, they focus on following through with after sale service that sets them apart from a number of companies (Drapeau, 2006).

The company