PROF. GAUTAM AHUJA : COMPETITIVE STRATEGY

Prof. Gautam  Ahuja is a Harvey C. Fruehauf Professor of Business Administration and Strategy in SC Johnson School of Business, Cornell University. He was in the region recently and was teaching in a custom executive education programme to 22 Senior Leaders of a Global Steel and Energy Giant. He led an insightful 3-Day Custom Executive Education programme on ‘Why have a Strategy’ and aimed at Creating a competitive strategy with a need to “Think inside the Box”

It is important for an organization to identify and define the right strategy to provide a sense of direction and to outline measurable goals.

 

Every organization needs to formulate 3 key levels of Strategy.

 

Corporate Strategy

  • Focus on understanding which business should one be in
  • Create the right framework of ‘Vision and Mission’ for the organization

Business/Competitive Strategy

  • Given a business, how should one compete in it?
  • Cost Leadership, Differentiation, Focused Approach

Functional Strategy

  • How should I organize various functional level strategies
  • Aligning, Coordinating and Combining strategies across verticals

 

Along with establishing a strategy, one must understand the integrated set of choices in a strategy. These choices are the key Components of a Competitive Strategy for both Internal and External consistency as highlighted by the Professor.

 

Product-Market Domain (PMD)

– Product: What do we sell?

– Buyer: Who do we sell to?

– Geography: Where do we sell?

Value Proposition (VP)

– Why they will buy (when they have other choices)

– Why you will make money (when they buy)

Activity Set (AS)

– How: Set of actions (marketing, finance, HR, manufacturing, etc.) to deliver the chosen value proposition to the chosen product – market

In the sense of creating the right model, having strategic flexibility is must to identify major changes in the external environment, quickly commit resources to new courses of action in response to those changes, and recognize and act promptly when it is time to halt or reverse existing resource commitments to achieve strategic objectives and goals.

Organizational Flexibility in a Fluid Environment – Five Organizational Traps That Limit Flexibility

  • The Visibility / Perception Trap
  • The Design / Imagination Trap
  • The Inertia Trap
  • The Execution Trap
  • The Energy/Motivation Trap

 

The sessions also highlighted in making the participants understand and help build a ‘Global Perspective or Mindset for recognizing complex range of competition and explore challenges, formulate, implement, test, and adapt a strategy to compete around the world.

 

The Key Take- Away:

Frameworks for

  • Describing and understanding strategy (PMD, VP, AS)
  • Categorizing and systematically recording strategic activities
  • Conducting competitive analysis at the activity level

Three criteria for evaluating strategy

  • External consistency: Is the strategy addressing the major opportunities and threats in the environment?
  • Internal consistency: Are the PMD, VP, AS in “sync” with each other?
  • Flexibility: Can the strategy be easily and effectively modified in the event of a change?

 

“Think about your product as a bundle of attributes/dimension”

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