Playing Field, Competition, and Our Organization
(Student will update all sections color-coded in RED)
Introduction
As the Chief Strategy Officer, the purpose of this Executive Briefing is to highlight our current
competition in our playing field. Our company, Embassy Suites, is a solid competitor in the
playing field when compared to our competition. One thing that sets us apart is our low daily
rates and our complimentary evening reception. The competitors, Springhill Suites and
Courtyard by Marriott, both have solid rankings with catering to extended stay travelers, offering
complimentary breakfast, and all suite rooms. The ultimate goal of this analysis will lead way to
recommend a game winning change for the company that will allow us to increase in revenue
and profits.
Playing Field
Company Name
Organization
within the
company
Industry
Market Size
Recommended
Playing Field
Rationale for
Recommended
Playing Field
Embassy Suites
Hotel Division
Hospitality Industry
The market size estimate for the playing field is plenty. There are
several hotels that cater to extended travelers in the playing field that
and each offers complimentary breakfast options.
Three-star two room suite hotels in mid-atlantic US area that caters to
extended stay travelers and serves complimentary breakfast with daily
room rate of $100-$250 per night
The ability to increase revenue based on adding an additional outlet to
the hotel chains.
Competitor 1: Springhill Suites
Size
Most Significant
Strength
Most Significant
Weakness
Recent
Performance
Major
Developments?
Springhill Suites is similar in size with regard to rooms and hotel size.
The hotel is the largest all suite brand under the Marriott portfolio. As
a result, the hotel chain is a market leader for their targeted market.
Under the Marriott portfolio, largest all suite brand targeted to
extended stays, also offers comp breakfast. Hotel offers inviting and
modern décor. Over 360 locations.
While the hotel offers comp breakfast, they do not offer comp evening
reception.
Due to large portfolio, with more hotels with modern decor, hotel is
winning above competitors.
An optional bar plan is available to enhance the evening experience
with detailed bar programming to help drive profitability. The Suite
Unwind Program offers a seasonal beverage and snack cart (for
purchase) in the evenings (Springhill Suites)
Competitor 2: Courtyard Marriott
Size
Most Significant
Strength
Most Significant
Weakness
Recent
Performance
Major
Developments?
One of the most longstanding and similar in size hotels
Longest two room suite chain with solid and consistent reputation of
meeting the needs of customers
Lacks evening reception
Due to their long-standing solid reputation and amount of hotels, the
chain is winning
Courtyard has introduced game-changing amenities like The Bistro —
a leading fast casual restaurant (Courtyard Marriott.com).
Our Organization: Embassy Suites
Size
Most Significant
Strength
Most Significant
Weakness
Recent
Performance
Major
Developments?
Solid in playing field; hotel offers two room suites, comp breakfast,
similar to the competition
Complimentary breakfast and added bonus of complimentary evening
reception; atrium setting, under Hilton brand.
Less modern and inviting décor in rooms; 245 locations which is less
than both competitive hotels. Limited F&B outlets that allows for
evening dinner.
Due to added addition of comp evening reception, this caters to
guests and helps level the limited F&B outlets so can be deemed as
the company winning in the playing field
Digital check in options which allows check in to rooms without having
to visit front desk
Key Conclusions
In conclusion, all hotels effectively cater to their market. However, there are some additions that
could be added to bring Embassy Suites ahead of the competition. The brand is expected to
add over 100 more hotel in the next few years. This addition will help the company gain more
business by being able to offer more availability in more areas throughout the United States.
The comp evening reception is one of the most significant strengths that helps the hotel
compete effectively. This is one function that causes the hotel to truly stand out as it is the only
hotel that offers complimentary reception. While the other hotels offer bundle packages or the
ability to pay for evening drinks, Embassy Suites is the only one to offer this feature on a free
basis.
References:
Courtyard Marriott. (2019). Retrieved from https://hotel-development.marriott.com/wpcontent/uploads/2019/09/Courtyard-NoAm-August-2019-One-Pager.pdf
Embassy Suites Brand Overview. (n.d.). Retrieved from
https://newsroom.hilton.com/embassy/page/embassy-suites-hotels-brand-overview
Springhill Suites Alexandria. (2019). Retrieved from
https://www.marriott.com/hotels/travel/wasax-springhill-suites-alexandria/
JWI 540: Strategy
Assignment 2
Assignment 2: How to Win: Strategic Options Assessment and Recommendation
Due Week 8, Sunday, midnight of your time zone (Weight: 25%)
Introduction
“Strategy means making clear-cut choices about how to compete. You cannot be everything to
everybody, no matter what the size of your business or how deep its pockets.”
– Jack Welch –
Whew! You have generated some great insights about the Playing Field and Competitors and your own
Organization from the work you did in Assignment 1. Now you will transition from looking back to looking ahead
and develop the primary “How to Win” strategy that will be your game-winning move!
Your CEO has clarified that you need to think expansively and recommend a Move that is transformative rather
than incremental. To help with this, you have decided to consider each of the seven common winning moves
outlined in the Week 6 lecture, and intend to pick one of them as your preferred game winning move. This is an
exciting opportunity to actually create the plan instead of just execute the plan and thus you want to do your best
work.
You know that your Game Winning Move will be a decisive choice for the company. But in choosing this Move
(as is the case with any strategic initiative), the company will risk money and resources. If your Move is the right
one, you will grow sales and profits and beat your competitors! If your Move is the wrong one, you risk
disappointing your investors and letting your competitors gain competitive advantage. Given the importance of
this Move, you want to evaluate each of the seven Moves and do a deep dive on the attractiveness and
feasibility and risks of your chosen Move.
Your CEO is expecting an executive brief in Week 8 that summarizes your analysis of the Move you feel offers
the most potential and your conclusion on the Game Winning Move that will you be presenting in Week 10.
Instructions for Assignment 2
Important note: We are striving to help you create game-winning moves, and not just evaluate other people’s
game winning moves. For this Assignment, do NOT recommend a Move that is identical or very similar to a
real-life example for your company. As an example, don’t recommend that Tesla/Apple/Google/Uber/etc. invest
in self-driving car technology or recommend that CVS acquire Aetna as those are all in the public domain.
Instead, recommend a Move that is novel and innovative for your company.
Prepare an executive brief for your CEO which provides the following information:
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be
copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course
guide is subject to change based on the needs of the class.
JWI 540 – Assignment 2 (1186)
Page 1 of 4
JWI 540: Strategy
Assignment 2
1. Opening paragraph summarizing the purpose and content of this brief.
2. Consider the applicability and attractiveness of each of the 7 common winning moves (from the Week
Six lecture notes) for your organization and your competitive situation in your chosen Playing Field. List
your top three most attractive Moves in order from most attractive to least attractive.
3. For your most attractive Move, provide specifics about the Move you would recommend. For example, if
you chose acquisition, who might you buy? If you chose geographic expansion, where would you
expand? If you chose discontinuous innovation, what would the innovation be? Explain why you think
it will generate financially attractive growth (which includes both incremental revenue growth and
commensurate incremental profit growth).
4. How does this Move align (or conflict) with your key strength/weakness identified in your Playing Field
template?
5. Most Moves require investments of resources and money. What are some significant investments that
would be required to implement this move? Note, we are not looking for dollar figures; instead, we are
looking for the key categories of investments (like hiring people, investing in new capabilities, or building
new manufacturing plants, etc.)
6. Most Moves have risks that need to be considered. What are the most significant risks and what is your
recommended risk mitigation plan?
7. How do you think the competition will react to your Move?
8. Conclude with a final paragraph or two which includes a summary of your Game Winning Move and
conclusions on the above topics.
Formatting and Submission Requirements
• The executive brief submission should be 2 to 3 pages (not including the cover page or
appendixes/references page.
• Typed, single-spaced, professional font (size 10 – 12) with one-inch margins on all sides.
• Include a cover page containing the title of the assignment, your name, professor’s name, and the course
title and date.
• Include a references page at the end documenting sources and citations used. You must cite three or
more current media sources.
• Use headings to identify main topics and subtopics.
• You are welcome to include charts, tables, and graphs in-text or in an appendix.
• Develop and support your research with facts and in-text citations, appendixes, and references.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be
copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course
guide is subject to change based on the needs of the class.
JWI 540 – Assignment 2 (1186)
Page 2 of 4
JWI 540: Strategy
Assignment 2
RUBRIC Assignment 2
Criteria
1. Recommend a
specific Game
Winning Move.
Weight: 30%
2. Alignment and
Investments.
Weight: 20%
Unsatisfactory
Low Pass
Pass
High Pass
Honors
The student does not
provide a Move
ranking and/or
unsatisfactorily
describes their
recommended Move
and how it might
generate financially
attractive growth for
the company.
The student
partially describes
their recommended
Move, but does not
include a Move
ranking. The
student only
partially describes
how the Move might
generate financially
attractive growth for
the company.
The student rank
orders 3 Moves and
satisfactorily
describes their
recommended
Move and
satisfactorily
describes how the
Move might
generate financially
attractive growth for
the company. The
Move might or
might not be
reasonably logical
or reasonably
feasible, but must
derive from the 7
common Moves.
The student rank
orders 3 Moves and
completely
describes their
recommended Move
with sufficient
specificity to provide
a clear
understanding of the
Move. Student also
completely
describes how the
Move might
generate financially
attractive growth for
the company. The
Move must be
reasonably logical
and reasonably
feasible and derive
from the 7 common
Moves.
The student rank
orders 3 Moves and
exemplarily
describes their
recommended Move
with sufficient
specificity to provide
a clear and
unambiguous
understanding of the
Move. Student also
exemplarily
describes how the
Move might
generate financially
attractive growth for
the company. The
Move must be
reasonably logical
and reasonably
feasible and derive
from the 7 common
Moves.
The student does not
include or
unsatisfactorily
describes how the
Move relates to their
company’s
strength/weakness
and significant
investments that
might be required.
The student
partially describes
how the Move
relates to their
company’s strength
and weakness. The
student partially
describes
significant
investments that
might be required.
The student
satisfactorily
describes how the
Move relates to
their company’s
strength and
weakness. The
student
demonstrates
satisfactorily
describes some
significant
investments that
might be required.
The student clearly
and concisely
describes how the
Move relates to their
company’s strength
and weakness. The
student
demonstrates sound
logic and reasoning
on some of the
significant
investments that
might be required.
The student clearly
and concisely
describes how the
Move relates to their
company’s strength
and weakness. The
student
demonstrates
exemplary logic and
reasoning and
foresight on the
most significant
investments that
might be required.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be
copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course
guide is subject to change based on the needs of the class.
JWI 540 – Assignment 2 (1186)
Page 3 of 4
JWI 540: Strategy
Assignment 2
Criteria
3. Risks and
competitive
response.
Weight: 20%
4. Provide an
effective and
persuasive
conclusion that is “fit
for use” for a CEO.
Unsatisfactory
Weight: 15%
Pass
High Pass
Honors
Student does not
include or
unsatisfactorily
demonstrates risk
mitigation. Student
unsatisfactorily
anticipates
competitive
response.
Student partially
demonstrates
anticipation of the
risks of the Move
and partially
provides risk
mitigation plans.
Student’s
competitive
response
predictions partially
address the likely
outcomes.
Student demonstrates
satisfactory
anticipation of the
risks of the Move and
provides satisfactory
risk mitigation plans.
Student’s competitive
response predictions
are not unreasonable.
Student
demonstrates good
anticipation of the
most significant risks
of the Move and
provides sound risk
mitigation plans.
Student’s competitive
response predictions
demonstrate sound
logic and reasoning.
Student
demonstrates
exemplary
anticipation of the
most significant
risks of the Move
and provides cogent
and novel risk
mitigation plans.
Student’s
competitive
response
predictions
demonstrate
exemplary logic and
reasoning.
The conclusion is
missing or presents
an unsatisfactory
summary of the
Move, risks, and
investments.
The conclusion
partially summarizes
the Move and
partially addresses
other factors like
risks and
investments.
The conclusion is a
satisfactory synopsis
of the key elements of
the Move. Conclusion
satisfactorily asserts
the recommended
move, while
simultaneously
providing some
perspective on risks
and/or investments.
The conclusion is a
complete and
succinct synopsis of
the Move.
Conclusion
persuasively asserts
the recommended
move, while
simultaneously
providing reasonable
fair-balance on
investments and
risks.
The conclusion is an
exemplary and
succinct synopsis of
the Move.
Conclusion
persuasively asserts
the recommended
move, while
simultaneously
providing
reasonable fairbalance on
investments and
risks. Excised from
the brief, the
conclusion
paragraphs could
effectively be used
as the elevator pitch
for the Move.
Brief is missing
significant content and
generally
unprofessional in
appearance or due to
multiple mechanics
and usage errors.
Brief is partially
well-written and
semi-professional in
appearance.
Several mechanics
and usage errors
make parts of the
text difficult for the
reader to
understand. Some
recommendations,
assertions, and
facts are supported
with in-text
citations,
appendixes, and
references.
Brief is satisfactorily
well-written and
generally
professional in
appearance. There
may be a few
mechanics and
usage errors, but
they do not have a
major impact on the
flow. Many
recommendations,
assertions, and
facts are supported
with in-text
citations,
appendixes, and
references.
Brief is succinct and
well-written and
within the threepage limit (excluding
cover, references,
and appendices) and
professional in
appearance. It
includes a cover
page. Mechanics
and usage errors, if
any, are minor and
have no impact on
the flow. Most
recommendations,
assertions, and facts
are supported with
in-text citations,
appendixes, and
references.
Brief is succinct and
well-written and
within the threepage limit (excluding
cover, references,
and appendices)
and very
professional in
appearance. It
includes a cover
page. There are no
mechanics or usage
errors. All
recommendations,
assertions, and facts
are exemplarily
supported with intext citations,
appendixes, and
references.
Weight: 15%
5. Present
information
professionally within
the three-page limit,
and support
recommendations,
assertions, and facts
with in-text citations,
appendixes, and
references.
Low Pass
Most
recommendations,
assertions, and facts
are not supported with
in-text citations,
appendixes, and
references.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be
copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course
guide is subject to change based on the needs of the class.
JWI 540 – Assignment 2 (1186)
Page 4 of 4
JWI 540: Strategy
Week Six Lecture Notes
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 1 of 8
CREATING MEANINGFUL DIFFERENTIATION
What it Means
Failure to create a value proposition that is meaningfully different from those of your competitors will reduce
your business model to a commodity play often with a race to the bottom on pricing. When thinking about
meaningful differentiation, however, not every winning move requires a breakthrough invention like the
iPhone. There are plenty of companies that make money in sectors that are commoditized (think of the retail
gasoline business, for example). However, even in highly commoditized and mature industries, there are
still opportunities for meaningful differentiation.
Why it Matters
•
If your self-assessment shows that your organization is not focused on making dynamic, gamechanging moves, then this is a significant warning sign that whatever competitive advantage you
currently hold is vulnerable to erosion.
•
It’s easy to underestimate the power and capabilities of competitors. Too often, the assumption is
that rivals aren’t getting faster, better and more innovative. This is how a company can lose its
competitive edge in a short timeframe.
•
The future of your business must always be at the top of a leader’s mind: it enables organizations to
make smart moves faster than their competition.
“Getting the right strategy means you have
to assume your competitors are damn
good, or at the very least as good as you
are, and that they are moving just as fast
or faster.”
“If the rate of change outside exceeds
the rate of change on the inside,
the end is near.”
Jack Welch
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 2 of 8
WHAT IS “MEANINGFUL” DIFFERENTIATION?
For differentiation to be meaningful, it must be something that makes your offering stand out, AND it must be
something that matters enough to customers that they are willing actually buy it. Any strategic move aimed
at creating meaningful differentiation must increase your competitiveness in the market and improve your
customer loyalty.
There are plenty of engineers and designers who are passionate about the products they create and support
who will advocate for ides that make the products better, but that’s not really what’s at the heart of this. The
real question is whether the move to make something better results in an offering that matters to your
customers and is a something that is not easily copied.
The real question in the pursuit of meaningful differentiation is the one that was introduced last week: “What
can you do to change the playing field?”
7 WAYS TO WIN
Below is a brief outline of seven of the most common (and proven) ways that organizations can create
competitive advantages and secure a dominant place in the market.
The list is not exhaustive, and you may discover that some strategists divide things up a little differently.
That’s fine. The purpose is not to force potential strategic moves into overly rigid categories. It is to
make use of groupings as a way to help you create and evaluate a checklist of options that might point
to the right growth paths for your business.
Few strategic moves are undertaken in isolation. While many will be centered on a single core focus
area, most will have other elements (such as branding) working together to support the initiative.
When considering any strategic move, you will have to assess not just whether the idea could be a money
maker, but also whether it could actually backfire by distracting your organization from its core business.
You also have to assess what it would take to implement the move. Is it simple or complex? Is the cost
high or low? Is it risky or relatively safe? Does it align with the mission, or does it require the
organization to redefine why it is in business?
As you review the following, keep in mind that the best moves are those that actually expand the market by
bringing in new customers, rather than just finding ways to get a larger share of an existing pie.
Geographic Expansion
One of the most straightforward ways to grow your business is to expand geographically. You can think of
plenty of examples of such growth, including Target stores expanding into Mexico, or a local or regional
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 3 of 8
company expanding nationally. The logic is that if something is working well in one market, then reproducing
the success elsewhere should be an obvious path to growth – just keep repeating what worked.
However, to say that this type of move is “straightforward” is not to say it is easy. The factors that have led to
success in a particular city, region, or country may be quite different than those in the new geography.
Further, expansion of any sort takes resources. Attempting aggressive geographic growth without adequate
funding and a good plan is an almost guaranteed recipe for failure.
If you are considering a geographic expansion for your business, you will need to carefully assess a wide
range of questions, including:
•
•
•
•
•
•
How do the competitive dynamics in your new market compare to your current one?
How will the expansion be managed?
Are there supply chain or quality-control challenges that could surface with the new geography that
are not present in your current market?
Is the customer base different in the new geography?
What will the management and ownership structure look like? Is franchising a way to go?
If you are considering an international expansion, a whole additional set of issues comes into play
including taxation, regulation, cultural and legal differences, etc. Are you prepared to address these
issues?
Still, despite all this, geographic expansion (when properly managed) is one of the most proven pathways to
generating growth, and one worthy of consideration for any business that has the potential for scalability.
New Price Tiers
Outside of commodity sales or products that have very tightly defined performance requirements (think about
any products that have strict safety standards), nearly all businesses will position their offerings along a
price-performance or price-quality continuum. Typically, there will be groups of customers who, given a
range of choices, will self-select the price-performance intersection that is right for them. The automotive
industry is a classic example of this.
Toyota built a successful business selling reasonably priced cars that were reliable. Believing there was an
opportunity in the luxury segment, they developed the Lexus brand, which has been hugely successful for
them.
Price tier moves can go in the other direction, also. Mercedes and other German automotive brands that
were historically known (at least in the U.S.) for top-of-the-line cars started making entry-level models. The
objective with these moves was not just to sell more cars to a segment that was not part of their current
market, but to build loyalty by getting younger, less affluent customers into the brand earlier, and then
moving them up into their more premium models as they got older and their income rose. In reality, this is
exactly what General Motors was doing back in its prime with its suite of offerings from Chevy to Pontiac to
Oldsmobile to Buick, and eventually to Cadillac. While not every customer had the means to move all the
way to the top, the ability for GM to deliver a wide range of solutions to the same customers was (at least for
a while) a successful example of levering pricing tiers to drive brand loyalty.
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 4 of 8
As you consider the potential of developing a new pricing tier for your offerings, you will need to assess:
•
Whether you can actually deliver a higher or lower tier of offerings. There may be certain minimum
performance demands that (presently) cannot be met at a lower price point. Or there might be
performance limits that cannot be surpassed at any price point. Or, if they can be surpassed, the
cost is beyond what the market is willing to pay.
•
How an up-market or down-market offering will be perceived. A mid-level brand seeking to enter into
a premium-tier space will typically have a lot of work to do to build the reputation and status needed
to succeed. Conversely, premium brands considering a less expensive offering have to assess
whether such a move will jeopardize the brand. Think about ultra-premium brands. What might
happen if Rolls-Royce or Bentley started offering modestly priced, entry-level cars? What if Rolex
started marketing a $500 wristwatch?
Vertical Integration
Vertical integration refers to supply chain moves in which companies take over additional parts of the
production (and potentially, distribution) process.
As you evaluate your supply chain, and how your product is created and delivered to the customer, think
about ways of eliminating interim steps or completely changing how your customer purchases or receives
your product. This tactic can be one of the most powerful ways of changing the playing field.
Supply chain optimization became a hot topic in the mid-seventies through the 80s. A whole consulting
specialization was built around this, but the principles are at least as old as the Industrial Revolution. In the
early 20th century, companies like Ford owned almost the entire production chain from raw materials to
finished products. At one point, Ford even owned the land and harvested the rubber that went into tires. But
one doesn’t have to look nearly that far back. There are plenty of more modern examples, such as Apple
deciding to make their own chips instead of buying from Intel.
Vertical integration strategies are about improving business alignment in ways that allow profits generated
from previously outsourced (or inefficient) production to be realized internally. These operational efficiencies
result in improvements in pricing, speed, or quality. Such efficiencies, if properly exploited, can create value
that is meaningful if passed on to your customers.
Additionally, vertical integration can increase supply chain control and security. Most suppliers sell to more
than one single buyer. That means that buyers (even ones with a lot of power, like Walmart or Apple) still
have to purchase from vendors who have other customers. These competing demands on the seller can
lead to delays and risks, including quality control issues.
The opposite of vertical integration is outsourcing – taking a part of the production process that is currently
done in-house, and finding an external provider to take over the task. Specialized providers are often more
efficient at performing these tasks, since that is all they do. It is their core competency, and they have
developed tools and expertise that would take non-specialists years to replicate.
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 5 of 8
If you are considering a vertical integration (or an outsourcing) move for your business, you’ll have to assess
some important questions:
•
What evidence do you have that you possess (or could efficiently develop) the expertise and
capacity to take over a production phase currently handled by a supplier?
•
Even if you can (profitably) take it over, should you? If the profit margins are lower than those of your
core business, or if taking it over creates a distraction that draws resources and focus away from
your core business, then a move that looks good on paper could actually hurt the business.
•
If you do make the move, what will it allow you to do now that you couldn’t do before, and what
would stop your competitors from making a similar move, thus negating any advantage you had
gained?
Moving into Adjacent Product Segments
Expanding into adjacent product groups can be a winning move for companies whose products are closely
associated with other functions. Think about Nike expanding from clothes/shoes into making golf clubs/golf
balls.
The success of these sorts of moves typically depends on being able to capitalize on one or both of the
following:
•
Leveraging a strong brand connection. This occurs when customers like a brand so much for its core
offerings, that they are open to expanding their interaction with it into other areas.
•
The second common way to move into an adjacent product segment is the “convenience play.”
Consider, for example, a company that only sold furniture, but expands to also sell design services,
or the gas station that adds a car wash. Is it the best car wash in town? Probably not. But if you can
add the purchase of a car wash at the pump when you finish filling up, and it’s here and now, then
why not? It’s not so much about a strong brand connection. It’s about the convenience. If a customer
can buy two items from one supplier, it may just simply be easier than managing two separate
buying processes.
New Distribution Channels
Another way companies create meaningful differentiation is through identifying a new way to distribute their
products or services. Amazon and Netflix enjoyed tremendous growth by leveraging novel ways of
distributing existing products and becoming experts in their fields.
Amazon accomplished this by offering a vast array of consumer products at lower prices, and shipping
directly to their customers' doorstep. In addition to the convenience of home shipping, Amazon eliminated
the "middle man," local stores, and could offer cheaper prices.
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 6 of 8
Netflix accomplished a similar feat by making movies available first by mail, and then through the Internet
through a variety of devices. This paradigm shift in how consumers could access movies stole a huge
market share from the largest vendor of movie rentals, Blockbuster, ultimately leading to its bankruptcy.
Building a winning move around opening new distribution channels is, in some ways, similar to moving into a
new geography, in that the core principle is to get your same product offerings in front of more buyers.
Another example of this is Iams dog food expanding from specialty pet stores into mass market grocery
stores. Originally a premium product, sold only through specialty stores, Iams was well-liked by its
customers, but a significant number of pet owners wanted the convenience of being able to buy their dog
food at the same time and place that they bought their (human) groceries, and were unwilling to make a
separate trip to a specialized retailer.
Opening new distribution channels can enable businesses to gain access to new markets with little to no
disruption to the current function. As such, this is often a lower-risk strategy. However, lower-risk does not
mean no-risk. Opening new channels can take considerable work to not only identify viable channels, but
negotiate distribution terms, and then, once the new channel is operational, manage the channel. There may
be pricing concessions required that can negatively impact margins, and there is a possibility of a backlash
from current distributors who feel your new sales channels are a threat to their business and an insult to their
loyalty. But generally speaking (and despite these cautionary factors), the more ways you can get your
products to qualified buyers, the better.
As you explore ideas to open new distribution channels for your business, you will want to look at all the
ways that your current competitors get to market. You will also need to assess whether it is worth it to gain
market share if your margins are reduced to the point that either your quality or ability to meet demand is
threatened.
Discontinuous Innovation
Every once in a while, individuals and companies hit upon an idea that is so revolutionary, it disrupts the way
that business is done. Often, these breakthroughs are technological in nature, such as Tesla launching
battery-powered autos. But other times, the breakthrough is less about a new technology than it is about
creating value for customers through a different operating model, such as Southwest Airlines building a
business around point-to-point flights, standardized planes, and quick turnarounds at the gate.
It’s well and good to always be on the lookout for innovations that have the potential to disrupt, but if
you don’t have any idea of what the breakthrough would even look like, or the R&D budget needed to
fund it, this may not be a viable winning move at this point in time. Discontinuous innovation is a
wonderful way to gain market share. Every company should spend some time thinking about what it can do
differently to totally disrupt the market, but changes in the very way that products function (Apple’s iPhone)
or that customers buy (Amazon) are rare. Investing too much energy into seeking groundbreaking
“eureka” moves can distract from continuous improvement, and from being a good operator of the
current business.
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 7 of 8
As you assess whether there is a potential for discontinuous innovation for your business, you have to:
•
•
•
•
Identify the most fundamental problems that are just not getting addressed with the current
solutions.
Determine, if you were to innovate and disrupt, how difficult it would be for your competitors to copy
your move.
Look for ways to get more out of your team with brainstorming sessions or with incentive programs
that reward new ideas.
Look outside your industry for ideas that could be transferable.
Mergers & Acquisitions
Especially in crowded industries, one of the most dramatic and powerful ways to change the playing field is
to acquire, or merge with, a competitor. Companies can benefit from economies of scale and by pooling
resources together to increase efficiency. They can also broaden their product portfolio and possibly their
geographical reach.
As you evaluate your possible strategic direction, give some serious thought to whether an acquisition or a
merger may be the most effective way to gain competitive advantage. Don’t let old biases and grudges blind
you to the potential of what such a move could accomplish. The more commoditized your industry, the more
likely your company’s size may be important for success. In fact, M&A is such a significant pathway to
market leadership, that we will focus on it in Week 8 of our course.
There are numerous reasons why an M&A move can be a winning one, but the majority of these come down
to one single thing – efficiency. This pursuit of efficiency typically falls into one of three categories:
•
Economy-of-scale drivers where being larger enables companies to negotiate better deals with
suppliers or distributors, or where manufacturing or selling in larger quantities creates better
operating margins.
•
Ending a futile competition in a market without a growing pie. Think about Sirius merging with XM
Radio, or about the numerous airline mergers that have taken place over the last two decades.
•
Acquiring a capability (or access to a market segment) that would take longer or cost more to
develop organically.
© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not
be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.
JWI 540 (1192)
Page 8 of 8
Purchase answer to see full
attachment