This week was all about business models and strategy something I like looking into in great detail. This is because unlike most of you, I walk down the street and think about the inner workings of a company when I walk past one, for example walking down Queen Street, when I pass shops like Swarovski etc, being a customer of the store and a business student, I think about the business objectives, marketing etc instead of saying ¿Oh that¿s a nice a poster¿ in regards to their marketing campaign.
This week I came into class all geared up for the real Mike Bikes filled with confidence. This essentially led to my downfall and hence resulting in my team not doing that great. I thought because I am world number 23 and hence in the top 2% of the world for Solo Mike I¿m awesome and thought that I was going to ace Mikes Bikes team. The thing was because we had finished 2nd in the class in the practice rollovers, this had put a whole lot more confidence in as majority of the decisions made had a great deal of input from me. However when I woke up at 1335 hours on Thursday to check how well we did, my company Pedal Power Ltd in which I hold the position of CFO did absolutely CRAP! Out of 6 teams we came out at number 4. Even though the difference in shareholder value wasn¿t that much I believe that we performed horrendously only because I made a few decisions with a lot of confidence rather than a lot of thinking. With a shareholder value of $16.86 and a rating of steady I know that we could have done better, however all that aside, my confidence in myself and my ego are still intact and with that attitude I will soldier on into next week and think more. I understand that we have a few more teams competing against us, but in order to be number you must know exactly what you are doing and not deviate from the set goal which for my company and myself is to win and be number 1.
The other daunting thing this week was that there was no offline mode, so whatever we decided on was solely from the reports provided and there was no chance to even see what would happen even if the competitors had absolutely no intelligence. Even though the offline mode was rare thing for me to use in the practice rollovers, given the fact that this was the real deal I just had to make sure that whatever we did was perfect so that we did not do something stupid causing our shareholder value to decrease.
This week, there was a lot more readings to be done compared to the previous weeks in my opinion I guess because as I didn¿t have a huge workload this week, I actually went through and did the readings in detail.
Having done the Young Enterprise Scheme in 2010 at High school with great successes at both regional and national level, I somewhat understood what business models and business strategy were but I came to use the terms as if they were the one thing (sorry I forgot the term). However the Magretta (2002) reading really explained it well using the Walmart example. Now I have actually come to learn what the two terms are and how best to define it. After doing this reading, I have come to learn that that a business model is how the business and its different elements come together and fit as a whole, and the business strategy is where you would assess and differentiate your business from that of the competitors to get a better edge.
Having read the Harvard Business Review for a few weeks for my other course, I have come to understand that it explains a theory through a story. Doing the Kim, W. C. & Mauborgne, R. (2004), I guess we can say that the markets within Mikes Bikes are red markets because they are already there and broken down into the five segments already. The reading talks about the blue market as the driving force of growth and what every company that is starting up looks for. Reading this made me somewhat ponder what Peter was talking about with regards to the perpetual map and how you can create a market outside the circles (segments in Mikes Bikes), I am still sceptical as to whether or not we would sell any bikes at that point and wonder if this is the way to create a ¿blue market¿ in Mikes Bikes and create growth within the market. I will perhaps revisit this reading later on once my company had enough of the market share and think of ways of creating growth later on once I am satisfied as to where my company has reached.
In conclusion, this week was one filled with excitement, anxiety and over confidence. Going further I would like to see my decisions being made using my head instead of my ego, because when I made a few decisions I was thinking about my reputation of being in the top 2% in the world etc. I guess this will be achieved with more active and responsive group work where we all critique and question each other¿s work/decision/recommendation instead of just being sucked into that idea of ¿group think¿
Kim, W. C. & Mauborgne, R. (2004). Blue ocean strategy. Harvard Business Review, 82(10), 75--84
Magretta, J. (2002). Why business models matter. Harvard Business Review, 80(5), 86--92