Strategic Management

21 Jan

School has resumed for me. It’s no joke juggling between work, school & this thing you can barely call a life. Nothing is impossible, but who would mind a little helping hand? I won’t.

My classes fall on Tuesdays & Wednesdays. Seems like the best choices compared to classes landing on a bluish Monday or ‘I should partay cos tomorrow’s a Friday’ Thursday and ‘I must partay cos today’s a Friday & tomorrow’s a Saturday’ Friday.

It’s my second week of school since my break & all I can say is, it’s not a breeze. Fortunately, my helping hand came in the form of my lecturer who teaches me this module, Strategic management. He has taught me before and I know he’s good. I left work a little late & had to take 2 buses to reach school but I wouldn’t miss his class & boy was I glad I didn’t.

-Flips through notes. SO… ok. Strategic management is all about analyzing your business’s market environment, coming up with plans and finally deciding on the right plan to use to create competitive advantage over your competition.

Naturally, we had to touch on the definition of the word, Strategy. This was the part my jaw dropped as wide as if I was going to remove my teeth but was glad to reach class despite being late.

Here’s the exact part. In the definition of strategy by Bruce Henderson, Founder of Boston Consulting Group. It states that:

your most dangerous competitors are those that are most like you. The differences between you & your competitors are the basis of your advantage.

Agree? I was nodding my head till he said: “NOT TRUE”. How could it be? If business A & business B were in the same industry, they are competitors. They have the same product mix, product line & products. So somehow, somewhere they have to seek a difference between each other to achieve competitive advantage over the other. Right? WRONG!

He asked the class the following questions:

1) Who are the competitors of spectacles manufacturer?
2) Who are the competitors of telco companies like Singtel, M1 & Starhub?
3) Who are the competitors of bookstores?

Some answered the first questions with brands saying that now everything is all about quality with fashion. So if you made the best quality spectacles that made you look good, you win!

In Singapore, telco companies compete against themselves of course. They are so similar (due to strict laws governing telecommunication prices) that they have gone into cable television & fight for rights to feature the best channels from around the world for their customers.

Bookstores sells the same books everywhere. There’s nothing much to compete in unless, we factor in location. Price are pretty much the same too.

Wrong. Wrong. Wrong. My lecturer literally plucked out our heads, turned it a 180 degrees & may not have put it back on. Here’s what he said:

Spectacle manufacturers can make the best spectacles in the world that help you read or make you look like a model but their competitors don’t even manufacture or sell spectacles. Their competitors are doctors. Doctors who provide Lasik surgery or lens implants to correct our sight. It might be pricey for most now, but in the future that might not be the case.

Telecom companies, fighting amongst each other? Not at all. Their competitors have emerged in the form of skype, chatting messengers and smartphone apps that allow low cost or even free mobile to mobile communication. Why call a friend on mobile when you can invest in a headset & microphone to skype them.

Bookstores? They are fighting a losing battle. First, Kindle. Then the Apple iPad & several tablets popping up in the market. Bookstores will cease to exist the day an iPad user downloads a million books with iTunes into their tablets. Schools can stop wasting money & precious trees printing out notes to weigh down & destroy the spines of our young children. Just make it available for download & they can view their textbooks or notes in the iPad.

Steve Jobs didn’t create the iPad to satisfy our needs. When he created the iPad, he created a need for us. He was creating a future. That’s why he’s so brilliant. He created a need.

Just like how Mark Zuckerberg created the need for people to create a presence for themselves on the internet & stay connected online.

My head more or less hit the ceiling & my jaw swept the floor of the class by now. That was how wide my jaw was after hearing all these.

Then I thought about something. There’s Groupon. A phenomenon that blurs the lines between a need & a want, because beauty treatments & food vouchers didn’t use to cost less than $30. For merchants, this is risk & cost free (unless the deal is tipped), advertising. We also know that Groupon business model can be easily copied. Fact is there are many, I mean MANY Groupon clones all over the world. Who are Groupon’s competitors then?

All I know is before Groupon’s arrival, certain companies were content doing what they do best everyday. Now, let’s just say advertising companies are not really loving Andrew mason at all.



2 Responses to “Strategic Management”

  1. sixthirtythree January 25, 2011 at 6:11 am #

    This post definitely fed my brain!!! I am quite glad I read it.

    Bookstores are now going to have to morph into digital book stores, if they are to survive. A good thing, then, since it will save some trees.

  2. gdg January 21, 2011 at 1:12 am #

    nice… now, go to bed.

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