Saturday, August 30, 2008

The Mind of the Strategist by Kenichi Ohmae

To begin with, in the book “The Mind of the Strategist”, Kenichi Ohmae emphasizes that it is a particular state of mind that helps in building successful business strategies. The good news is that this state of mind can be acquired and practised to reach its full potential!

Kenichi Ohmae has divided the book in 3 major parts. In first part, which he calls the “Starting Point” or “The Art of Strategic Thinking” he talks about Analysing the problem or the issue, as faced by an organization, into their constituent parts to clearly understand the particular character of each element. This will help us in understanding the “Four Routes to Strategic Advantage” –
1. Key Success Factor in the Business
2. Building on Relative Superiority
3. Pursuing Aggressive Initiatives
4. Exploiting Strategic Degree of Freedom

In the second part, called “Building Successful Strategies” Ohmae writes about the “Strategic Triangle” or the three major constituents of any business strategy. These are:
1. the corporation itself,
2. the customer
3. the competition.

In terms of these three key players, strategy is defined as the way in which a corporation endeavors to differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer needs.
The Part three of the book called “Modern Strategic Realities” deals with Environmental influences and how to cope with strategic changes of the present days. Ohmae writes about four strategic changes visible at present:
1. From labor to capital intensity
2. From multinationals to multi-locals
3. Shift from fixed-cost to variable-cost game:
4. Foresighted decision-making

Ohmae also talks about a Five-step process to achieve these strategic changes:
1. The business domain must be clearly defined.
2. Extrapolate the present forces into the future on the basis of cause and effect with a logical hypothesis as to the most likely scenario.
3. Only a few of the many strategic options must be chosen and once the choice is made, people, technology, and money must be deployed very boldly and aggressively towards them.
4. The company must pace its strategy according to its resources.
5. Management must be ready to change the basic direction of the business if changed conditions demand so.

Ohmae believes that it is the combination of analytical method and mental elasticity, which makes strategic thinking extremely relevant to the problem of strategic stagnation in any organization.

The only aspect which I found missing in the book is the Strategic Alliances with suppliers and other business organizations, the two most important strategic decisions for an organization doing business at present.

The best thing about this book is that though it was written way back in 1982, most of the concepts talked about here are extremely relevant even today. Some of these concepts are competitor-based strategies, key success factor, functional strategies, relative superiority, position relative, critical issue, competitive advantage, aggressive initiatives, tunnel vision, flexible thinking, strategic triangle, planning units, back corporation, economic environment, strategic response, strategic change, etc which are considered key elements of modern market strategy. Therefore, it can be said without any doubt that this book is more relevant today than may be when it was published!

Friday, August 29, 2008

A Peek into a Cult Brand

“Cult” brands don’t just happen... they require certain ingredients for success -
• To belong: To become more individual
• they feel they are different from others
• To reinforce something about themselves
• For a sense of purpose
• For a sense of community

Some of the attributes of a Cult Brand would be Differences, Love, Community, Interaction, Tension.

Such brands communicate love not through the product, but through the limited clan of people who take pride in owing such products, by creating a common philosophy which they can all believe, or, through interactions. Simply, such brands are not for everybody! Like – a Mac vs. a PC

A sense of community is of the utmost importance – there has to be strong believe that it’s not shared by everyone! It could also be a doctrine that can be articulated, or a strong belief that “I am more complete in this community”. Therefore, in one hand it does “Polarizes” through “Us and them”; while on the other, it gives an opportunity to rub together with like minded people.

The E-Bay Cult
• It’s a code of conduct built on trust
• E-Bay’s philosophy is right on line
• You take responsibility to abide by it, and to make sure others do.
• Keep people rubbing together
• Mutual responsibility to keep the cult alive

How Harley became a Cult Brand
• Harley is for the “rebel inside”
• Harley is not for everyone – polarization is good
• Harley is different – sound, symbols,
• German/Japanese brands don’t have the “attitude”
• #$@&* Off, I already have enough friends – T-shirt

Which is that Indian Cult Brand you can think of?

Saturday, August 16, 2008

“Insumers” – the new market segment

In US, ~ 23 million people run business from their home, while ~ 10% “telecommute” from their home with their employers sitting across the globe. In India, the numbers could be interesting as well, particularly when lots of companies are allowing their employees to work from their home in order to save precious fuel, electricity, or simply to allow more work-life balance, or during maternity / paternity leaves.

These telecom users have very distinct communication requirements since they are using these services for both personal and official uses, and there could be a good opportunity on the part of the telecom cos, or ISPs, to customize offerings to such users. The “Insumers”, as I would like to call them, since they are not “con”summers, are growing slowly but steadily into new market segment and service providers who can customize offerings, keeping in mind their specific requirements, could very well reap the benefits of an innovative first mover.

To create a market value for this “insumer” segment, the telecom companies need to focus on having a dedicated insumer product strategy with the right mix of product offering, service features, etc keeping in mind the very unique home users.

The insumers could eventually turn out to be an attractive marketing messaging board for the business world.