This week¿s readings appropriately focussed on the great variance in a company¿s chosen strategy and the potential pitfalls to avoid. Having finished the practice rollovers and as Peter said ¿removed the training wheels¿ it was time to sit down and thoroughly consider the elements that worked and those that didn¿t in our decisions. Our group found that what we initially believed to be the best strategy was in fact just one, narrow approach to the task and although we stuck to what we trusted for the first real rollover, we do have a few new ideas and considerations that will no impact our decisions for the rest of the semester.
In regards to the readings I found them particularly interesting and thought provoking, not to mention extremely useful for the beginning phases of our market simulation. In breaking down a strategic vision, Kim & Mauborgne (2002) argue the need for focus on three fundamental qualities – focus, divergence and a compelling tag line. I found myself agreeing with all three and was able to apply them to our Mike¿s Bikes group. Our group chose to remain focussed and centred around elements of the game that were pivotal to maintaining our strategy and consequently we were able to reduce our expenditure in other areas that we believed would not play a significant part in this ideal. However I now understand that there is a significant difference in being focussed and being short-sighted. Time (and not necessarily a lot of it) will tell which end of the spectrum we lie on. Upon reflection I think our team could have taken a much deeper look into the market to truly analyse what trends were/could be emerging. I also believe the areas we chose to cut costs in or avoid expenditure in, should still have been considered to ensure that we were optimising our chances of success. Right now, I believe us to be short-sighted and our company¿s value curve (Kim & Mauborgne, 2002) is likely to reflect this. In the upcoming rollovers I think our approach may need some reconsideration and restructuring.
Additionally we chose not to succumb to the pitfalls of a diverging approach (Kim & Mauborgne, 2002) to our strategy. As Kim & Mauborgne discuss, there comes a point where altering your strategy to the market and your competitors can in fact have negative impact on your company¿s well being. I struggled with this concept as I was initially a firm believer that the ability to be flexible and dynamic in market conditions that have a somewhat unpredictable nature to it was a positive and desirable attribute in a company. However I then came to comprehend that if we chose to react on the market alone, without any underlying strategy, we would always be one step behind everyone else – we would never be ¿price leaders¿ as Peter mentioned in class. I believe for our firm to find the correct balance we must understand that we need self-efficacy in our strategy but understand that small adjustments (in terms of specific expenditures) may be needed. However, I now understand that a re-evaluations and uprooting of an existing strategy is not always the best choice.
Complimenting this was the discussion of blue versus red ocean strategies (Kim & Mauborgne, 2004). The former encompasses all existing industries in which companies fully understand and are able to predict market actions and reactions, where as the latter comprises companies that alter the existing boundaries, fuelling the engine of growth (Kim & Mauborgne). I found this article simply re emphasised my understandings from the previously mentioned article; that reaction to the market is not the only avenue for success. I hope that our team will be able to realise, implement and execute a blue ocean strategy before too long and I strongly believe that our overall strategy needs to reflect and align with this. After all, how can we possibly expect to be leaders when we focussing on the past and what we can do to follow it. My current job entails elements of learning and development programmes for internal training and it has taught be that the company is genuinely market focussed but also recognises that in order to truly separate themselves from their fellow, high-profile competitors, they need to encourage innovative approaches to training (structurally and methodically) and always remain one step ahead. One thing that I would like our team to adopt in the near future is a degree of comfort with risk and unpredictability that will facilitate a blue ocean strategy. Without this confidence and comfort the reality of us realising our goal may simply be well-intentioned optimism that lacks conviction. In light of these readings, there is certainly plenty for me, not just as CFO but as a part of a team, to think about and will have to get the creative juices flowing before we are ready to take the next step.
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