In Monday¿s class, Peter told us that he has removed the ¿training wheels¿- meaning that we could no longer roll back and forth in the offline mode. The CEO and myself looked at each other in horror and I knew we were both thinking the same thing. ¿There¿s no way to ¿test¿ our decisions anymore. What are we going to do now?¿ All of a sudden, it felt like the game has changed, things are starting to get serious and we need to rethink how we go about deciding on our final decision. If we can¿t roll forward to check the results then we won¿t know if we made the best decision possible¿. Safe to say, the realization was a scary thing but then again, it was selfish to believe that Peter would allow us to use the offline mode for the real roll over as that removes to essence of decision making. So knowing this, our group had a meeting immediately afterwards where we agreed that increasing our communication and collaboration is the best way to avoid making bad decisions. If we each understand how our given roles fits with one another, we can be mindful of our own decisions as well as being responsible to ensure that team members are deciding accordingly. I believe that paying attention to what members are doing is crucial to making sure your own decision is in sync with theirs.
The resources this week has reintroduced me to the variety of business strategies (which I¿m guilty for forgetting) such as the blue ocean concept and the strategy canvas. I believe that after reading the resources and understanding these strategies, I have a deeper understanding of the different strategies that is available for an organization to utilize.
In the first reading ¿Charting your Company¿s Future¿ written by Kim & Mauborgne (2002), they look at using strategy canvases as a way for organizations to gather information together so that they are able to make goods decisions. The four steps to drawing strategy canvases are: visual awakening, visual exploration, visual strategy fair, and visual communication. These steps involves methods such as comparing one¿s business strategy to the competitors¿, identifying areas for improvement, discover alternatives, receive feedbacks from consumers in the markets and comparing the before and after strategic profiles of the company. As Kim & Mauborgne (2002) goes on to say, ¿completing the four steps of visualizing strategy will put strategy back into strategic planning, and it will greatly improve your choices of coming up with a winning formula¿. I¿ve just realized that my Mikes Bike team came to agree on a team strategy this week through using the same process as described above. Instead of working independently and then ¿mish mashing¿ it all together, we laid out all our ideas on the table so that we could work on each part together. This helped us communicate better, everyone was included in the decision process and new creative ideas were introduced as well. For the real roll over we have decided to take a huge leap of faith and pursue a completely different strategy from the one we used in the practices. The reason why we chose to change our initial plan is because it is challenging and will put our team co-operation skills to the test. Now that we¿ve found an effective way to putting ¿strategy back into strategic planning¿, we¿ll have to wait and see if it¿s a winning formula.
The second reading discusses the Blue Ocean Strategy, I was very interested by this concept because it offered us a new way to look at the consumer market. Kim & Mauborgne (2004), describes the red and blue ocean as two different business universes. On one hand, there is a known market place with existing competitors fighting over the same consumers. The red ocean has established rules and boundaries which organizations operate inside in order to be competitive. Furthermore, because there are so many companies competing in this one ocean, it is hard to differentiate, stand out or establish brand awareness. On the other hand however, is the blue ocean. It¿s blue to indicate the unknown, the yet explored or unoccupied space. The reading suggests that companies who can push the boundaries of a red ocean and move into a blue ocean, are able to create demands and gain loyal consumers in that market, they are now- in a sense ¿playing by their own rules¿. In Mikes Bike practice roll overs, our team tried to create many bikes with the goal of trying to get it as close to the center of the perceptual as possible. If our bike is closer than our competitors then that¿s good! It means that we are satisfying the majority of the market right? And then from that we can spike our prices and customers would buy our bikes as it was what they wanted- Right? I guess in a way this is a pretty accurate theory, but what if other competitors are creating the bikes that are in the center as well? All of a sudden, it¿s about which organization can give the ideal bike at the cheapest price.
This reading has helped me see that we were fighting in a red ocean, because every other team were competing for the same tiny market segment. This realization has been taken into account when we decided on our new strategy: do we want to battle in the red ocean or seek out a blue ocean? Both oceans are risky for their own reasons but I don¿t want to lurk on this concept for too long.
The last reading was on why business models were important. What I learnt was that a business strategy and a business model are two separate things but in order to be successful, an organization needs to have a model that compliments the strategy (and vice-versa). I agree with this statement, as so far, our Mikes Bike team has a business model – which is to plan together and to always be on the same page when we come to make our decisions. I feel that our model has made it easier for us to implement our new strategy. Our focus and co-ordination has placed us first in our world this week, and I believe this is a true reflection that even though we¿re pursuing a completely new strategy, our business model is keeping us from going astray (Magretta, 2002).
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