This week has been primarily about strategy, deciding with my group what strategies we should take for Mikes Bikes. This is one of the first things we discussed as a group, deciding what strategies are likely to get us to the top, as we really need to look at the big picture. I believe it¿s very important for establishing a good outcome for our group. I went into this week with an open mind, with a real willingness to increase my knowledge of strategy. I was slightly nervous when offline mode was disabled; this makes strategy even harder, or possibly just the execution of the strategy! It was a reasonable move though; it¿s a lot more realistic to the real business world. Businesses have to work off forecasts and need to make decisions far in advanced, being able to role forward and see what happens is rather unrealistic!
The first article I read was one on blue and red oceans; this was a very interesting concept! A key idea of strategy for Mikes Bikes is that competing in overcrowded industries is no way to sustain high performance, which we would all like (Mauborgne, 2004).The business universe consists of blue and red oceans; red oceans are the known market space where industry boundaries are accepted and rules are well understood. Here rivals try to outperform each other. In Mikes Bikes the markets are clearly classified for us so could be said to be red oceans, we can aim for different sections within that market. Blue oceans are all the industries not in existence today; demand is created rather than fought over. There is ample opportunity for growth. I personally believe our strategy falls into the blue ocean; we believe the key to success is being different. It is obviously difficult in Mikes Bikes to know if this is in fact the case, we may end up all having a common strategy! We may think our strategy is new and innovative but it could be the opposite. The most important thing is to differentiate ourselves and not become too hung-up over market share and our competitors.
The article by Mauborgne (2002) makes it clear that we all need to look at the big picture. It was stated from research that very few organizations have a clear strategic vision. So few turn into action as executives are stunted by the muddle. Strategic plans have to be clear to everyone involved. You must know the development of your business and the competition and continually adjust the business to fit in with the changing environment in which your business operates. Mauborgne (2002) stresses competition in her article, we as a team keep our competition at the front of our minds, making sure we don¿t become solely focused on ourselves and loose track.
Finally a business plan is rather different from a strategic plan. According to the article by Magretta (2002), a business model is one which is a scientific calculation of how your business will work together. A strategic plan is the consideration of the competition to your business model. I have learned that these two can definitely not work without the other, they form a process. I believe our team has a good strategy but we should work on our business model, so the process runs smoothly and is even more effective.
Kim, W. C. & Mauborgne, R. (2002). Charting your company¿s future. Harvard Business Review, 80(6), 76---83
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