HypercompetitionHypercompetition

The 7 S’s of Hypercompetition Vision for Disruption

Superior Stakeholder Satisfaction - Customers and Employees Strategic Soothsaying - To envision the future - and move beyond to create it

Capabilities for Disruption Speed - like that employed by Rammel initially in the blitzkrieg across Europe,

and later Patton, with their tank brigades Surprise - in the context of Pearl Harbor and the Normandy Invasion

Tactics for Disruption Shifting the Rules - as Dell accomplished in the PC market Signaling - as IBM and Microsoft to hold off competitive innovation Simultaneous and Sequential Attacks - attacking on more than one front, on a

continuous basis where your competitor least expects it - leads to disorientation and disruption of their plans

Strategic LeverageStrategic Leverage Concentrating scarce resources given industry structure and company’s

competitive position Precisely identifying company’s area of leverage

What are feasible strategies? What are constraints to ability to maneuver?

Powerful buyers/suppliers, high degree of competition, mobility barriers Competitive position and past behavior

Position - leader, #2 or 3, follower, new entrant Nature of conflict - win/win, limited warfare, win/lose, lose/lose

Objective strategies and tactics What capabilities or enabling competencies are required in order to exploit the leverage

Outcome Definition of attainable objectives Determination of required competencies Enabling of “creative disruption” - changing rules of game to your advantage

Target Marketing/SegmentationTarget Marketing/Segmentation Define long-term vision (10 year plan) - what business want to be in as market evolves, how

want to play and where Look for potential areas of growth, to expand

New uses of product, new users, bundles for particular customer Critical mass vitally important to compete long-term

Establish segmentation plan - Goal #1 in Segment (Highest ROI) Define types of products/services Focus on satisfying and owning a segment or a niche - not the whole market, look for unoccupied

niches Stay in constant contact with customers and markets - moving targets

Timing - which segments in what order with what entry timing Strategic - enter early to establish competitive position Play to strengths - concentrate strength at point of competitor’s weakness Use element of surprise - don’t alert competitors to your moves Introduce fewer products with higher likelihood of success Divide and conquer segments - one by one, niche by niche, making constant improvements

Differentiating/PositioningDifferentiating/Positioning Differentiation - Key to Profitability

No other strategic decision has larger profit impact than superior differentiation Has to register to customer that you are

Better, faster, newer, more cost-effective than competition Me-too products/services don’t capture share of mind, poor ROI

Must develop meaningful differences - that matter to customer Give customers what they want - when they want it Focus on one or two differentiators to be clearly superior

Build upon them and sustain them over time Be first to market with them

Positioning - designing and communicating your distinct personality in the marketplace Positioning is what you do to the mind of the customer

Volvo - safety, IBM - service, BMW - performance SA - Leading the Way in the Information Age

Customers need to clearly describe your position with great consistency Needs to be rooted in understanding of how Target market:

Defines value and makes choices among products and competitors

Options to DifferentiateOptions to Differentiate

Speed - React quickly. Capture the leadership position by being first to market. Get it to customer faster - Perform series of programs and processes simultaneously

Reliability - Earn customer loyalty. Deliver products and services of consistent quality.

Give the customer what they want, the way they want it, when they need it. Do what you say you are going to do. Do it consistently. If something happens - don’t

make it the customer’s problem. Service - Satisfy the customer - meet their needs for service.

Augment the product - can achieve premium price for commodity product. Key to competing where there is product parity.

Driving down level of dissatisfied customers also improves level on satisfied ones Technology - Innovate. Find new applications for emerging technologies and

identify customer value. Bigger, faster, cheaper, new approach, disruptive

Options to DifferentiateOptions to Differentiate Relationships - Nurture them. Everyone in the organization must be market-driven.

Devote more effort on keeping profitable customers Cost much more to get new one than keep old one - up to five times more

Not good enough to have the most technologically advanced product, provide good service - when everyone else can

Objective - Keep customers you have and maximize lifetime value Focus on delighting the customer so they are not interested in leaving Fix the problems - highest leverage area

Design - Perception is everything. Design the look and feel of products to standout in marketplace.

User -friendly - to start-up, to use, repair Deliver on dimensions important to customer

Features - know what attributes customers value, will pay for and focus here. Personality - define yourself. Create distinct image.

Achieve brand image for positioning and corporate personality that represents set of values customers are interested in

InnovationInnovation

Gain innovative advantage - shorter innovation cycles capture new opportunities: SPEED KILLS

Build relationships with major directional customers Anticipate customer needs given changes in technology and lead them in development of

information management solutions Keep abreast of emerging, and potentially disruptive technologies

Improve product and process innovation capabilities that support concept development and overall performance and cost enhancements

Leverage capabilities with internal development group, suppliers, customers, associations, universities and partners

Target design-to-prototype cycle time reduction of 25%+

Define and Achieve Leadership with Directional Customers Establish strategy for each Directional Customer

Strategy defines needed products, services, marketing and selling strategies and efforts to achieve operational excellence in the eyes of this customer

If satisfy the “most difficult” customers - this will pull organization to higher level for rest of customer base

Top and Bottom Line EnhancementsTop and Bottom Line Enhancements

Ways Sales and Marketing can boost sales and profits Identify market trends to access accurately the future profit potential of a business

Analytical scenario of future market conditions

Develop business strategy, marketing strategy and plan that Creates strategic leverage and builds upon strengths/core competencies of the firm Identifies new competencies needed to achieve/sustain leadership Utilizes customer profiling, segmentation, and target marketing to

Grow current customer base and market segments Identify and build profitable new market segments and niches Better match of product/service bundle to customer needs

Achieves a differentiated market position - competitive advantage in product/service offering, way you do business with customer

Helps grow their business and impact their bottom line Provides higher value to reduce price competition Positions you as the best in category in the mind of the customer

Top and Bottom Line EnhancementsTop and Bottom Line Enhancements

Identify new product/service capability to add to product portfolio Serve current customers - reduce cost of sales Serve new customers Improve margins

Identify and develop new channels to attract more customers and better serve them E-commerce

Determine profitability of specific Products/Services, Sales territories, Customer groups, Accounts within them,

Trade channels or channels to market, Order sizes Fully assign expenses associated with serving those accounts Understand which contribute how much to your profit

Eliminate “losers” Prune unprofitable product/services and customers

Top and Bottom Line EnhancementsTop and Bottom Line Enhancements

Increase profits by spreading Sales and Marketing costs over larger sales volume Achieve differentiated product/service offering to make selling efforts easier and

less expensive Develop effective support programs - Customer Service and E-commerce Support implementation of new sales, marketing and customer service approaches -

Customer Relationship Management Large Account Management, Strategic and Conceptual Selling Sales and Marketing Automation

Sales and Marketing activity profitability analysis - Improve productivity, spending efficiency and impact of marketing tools - Sales Force,

Advertising, Sales Promotion Sales and Marketing efficiency studies - how can sales and marketing activities be

carried out more efficiently - Sales & Marketing Audit Critically examine overall marketing and sales plan - objectives, policies, strategies and

programs in light of changing market conditions

Marketing Objectives and TacticsMarketing Objectives and Tactics Goal - Customer retention, loyalty, share and value maximization Customer Targeting and Target Marketing

Work to build relationships with most profitable customers Market concentration - focus on customers where can best improve their profits - reduce their costs, improve

their sales or productivity Make your joint growth a partnership

Specific strategy for each market and specific offer for each customer Win the battle for Customer Loyalty - Commit resources to win

Set “extremely high” standards and make customer satisfaction everybody’s business - everyone is responsible and its “my problem”

Be obsessive in knowing, even better than the customer, what he wants Enables you to anticipate product/service needs

Design products/services to maximize customer satisfaction -delight them Focus on demands of most demanding customers

Create and manage expectations - manage performance to achieve it

Strategic Alliances/Acquisitions - take the offensive, do it faster Provide complete package desired by customer

Compete effectively against “large” competitors Use alliance to position for future acquisition - eliminate fears/barriers

Plan of Attack - Top/Bottom Line GrowthPlan of Attack - Top/Bottom Line Growth Prepare the Marketing and Sales programs

Identify market trends to access future profit potential of a business Scenario of future market conditions - potential areas of change, growth

Perform Customer Profiling, Need & Competitive Assessment Market and Customer Segmentation opportunities, Directional Customers Identify New Opportunities/Needed Competencies to achieve/sustain competitive advantage, leadership position Understand how to help grow customer sales and profits, meet their needs

Profitability Analysis - products/services, territories, customers, accounts within them - what/who contribute how much to profits

Identify strategy that creates strategic leverage and builds upon the strengths/core competencies Create Product/Service/Technology Roadmap

Investigate potential of disruptive technologies, products, approaches Define Differentiation and Positioning strategy that provides

Competitive advantage in product/service offering, way do business Best in category position in mind of customer Reduction in selling efforts, expense and emphasis on price

Establish products/service portfolio, pricing, promotion and sales approach to serve market and customer targets, improve profitability

Plan of Attack - Top/Bottom Line GrowthPlan of Attack - Top/Bottom Line Growth Communicate/Execute the Marketing and Sales programs

Grow and maintain current customer base Develop high-level relationships with key customers Move away from unprofitable products/services, segments and customers

Identify and build position within profitable new market segments and niches Pursue new product/service and market opportunities, customers to diversify sales

base Become customer and region neutral

Investigate and Pursue Strategic Partnerships/Acquisitions Improve sales force and promotion effectiveness, productivity

CRM/S&M automation, SS, LAM Advertising, Sales Promotion

Develop effective sales support programs to attract more customers, better serve them Customer Service Define and execute e-Commerce strategy

Build an energetic and achievement-oriented Sales and Marketing team

Define need for increasing product/service coverage, presence to the sale and hit rate to grow market share

Develop and implement tailored, winnable strategies based upon: Growing specific customer satisfaction, sales and profitability Achieving meaningful differentiation/positioning in mind of Customer

When Airframe Manufacturers think of information management solutions - they think of SA

Will pursue 1-2 differentiators and be clearly superior - technology and reliability, could possibly tie in design or features and speed

Disrupting the “status quo” and creating a continuous series of temporary advantages

Speed, Surprise, Change the Rules, Attack on more than one front Identification of feasible strategies

Understanding and utilizing changes in the market and technology Leveraging strength and concentrating this strength in attacking weaknesses of major

competitors Brand image, portfolio of products and technologies, service/support organization

Understanding differences in purchasing behavior by individuals and regions

Implementing strategy in sequence to concentrate resources and win

Targeted Sales and Marketing StrategyTargeted Sales and Marketing Strategy

Sales StrategySales Strategy Focus entire Company on the customer - to help them achieve their strategy

and bottom line Focus is on development of customer relationship - not the deal Sales works to solve customer’s problems - any and all of them Everyone works to secure account revenue/maximize customer service

Objectives Satisfied Customers, Long-term Relationships, Repeat Business, Referrals

Deliver Value to and Make Customers More Profitable and Successful Differentiate on the quality of ideas and tangible bottom-line impact on customer’s

business Need to understand customer’s industry/business as well as application of products

and services Can impact Customer Speed and Productivity/Efficiency - receipt of inbound shipments,

manufacturing process, shipment, marketing & sale and service of finished goods Can build value proposition around business know-how, supply chain optimization,

operation support, ease of doing business, organizational strength as well as product/service design

Improving Sales EffectivenessImproving Sales Effectiveness

Account Maximization Strategies - 6 ways to win Know Customer’s business and market in which they operate

Position to make them more successful Become part of the organization

Integrate into operations of the customer (have our own badge) Become a Consultant

Layer value onto product & service offering from delivering tangible, bottom-line impact

Demonstrate how products/services/ideas impact their business results Create good operational processes

Easy to do business with - technical service, order placement, invoices, etc. Work account at all levels

Within a function and across functions Leverage relationships

Utilize success in one dept to others in company, other locations, subsidiaries, JV’s and outside the company (referrals)