What company do we want to be in Mikes Bikes, what should our strategy be?????
Analysis of problem:
Breaking down my problem and what made me feel anxious about it, resulted in a number of answers.
1st- there are 5 market segments but 6 teams, which means that potentially and most likely we have to share a market. This possibility of sharing a market is especially true given the fact that some firms will want to be in every single market and thus we could end up with something like 4 firms in one market if everyone chose to focus on one segment with their new Bike. Which means we would be competing head on with many other firms.
2nd- there are 4 untouched markets to begin with, each has its own description and different number of customers. Some are large and some are small. Because we don¿t know what market others will choose its hard to pick a market and what firm we want to be, what long strategy should be. We don¿t know anything about our competition and can¿t do an industry analysis like many other companies can in the real world to assess the competition situation in order to come up with a strategy, find what is missing/a niche etc.
Formulation and testing of a tentative theory to solve the problem.
Thankfully i have now done the readings for this week which have given me few insights and solutions to my problems.
1- No matter what other teams do we need to have a differentiation strategy. We need to create a Blue Ocean strategy (Kim & Mauborgne, 2004). That way even if 4 teams all target one market, we would be different from them because our product will be different, will be offering a different value to the customers. This would be achieve by analysing chosen market specs (i don¿t want to say what market we chose as other people will be readings and can steal our strategy) and creating a New Bike with the specs that are not right in the middle of the large circle but somewhere different (still with-in the large circle), based on the analysis of the target segment wants and likes. This way, as Kim and Mauborgne (2004) suggest, we would be creating new land/new space where we are not competing with other companies, don¿t need to share/divide our customers with other companies. Thus we will be perusing both a differentiation and low cost strategy simultaneously as Kim and Mauborgne (2004) suggest for a Blue Ocean company.
Action (or deciding whether to act):
I realise that only after the 2nd and 3rd roll over will be able to truly analyse our competition and what their chosen strategies are. From this we can form a strategy canvas as suggested by Kim and Mauborgne (2002). The strategic canvas will include: strategic profile of an industry by depicting very clearly the factors that affect competition among industry players, as well as those that might in the future; the strategic profile of current and potential competitors, identifying which factors they invest in strategically; our company's strategic profile-or value curve- showing how it invests in the factors of competition and how it might invest in them in the future (Kim & Maubourgne, 2002).
Also for now we will focus on creating a Bike for the type of company we want to be, for a certain segment and making our factory the type of factory for the certain type of Bikes we will be producing/the type of company we will be. At the same time we will be focusing heavily on marketing of our new product to let the target customers know about our product, the value they will be getting and attaining their loyalty.
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