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Strategy, Redefined.

Strategy, Redefined.
Article
RedefiningStrategy.com, June 2004
Download PDF (185 KB)

Note: The concepts presented in this work have been radically improved as part of a theory launched at BizBigPic.com in August 2006. We recommend reading these in conjunction with the new theory.

Description / Excerpt:

"Over the years, the concept of strategy has been repeatedly redefined in an attempt to maintain validity in an ever-changing business world. Dramatic changes experienced over the past three decades, culminating in the explosion of the Internet, have invalidated one by one all traditional approaches. As a practice, the reliance on environmental stability is loosing ground because the competitive landscape is becoming increasingly difficult to define. The belief that ownership of a core competence will lead to a sustainable strategic advantage is no longer widely accepted, as individual ownership is quickly being diluted by informational leakage. Across the board, the root cause of these dismissals is an accelerated free circulation of information. A more interesting observation is the common characteristic that these theories share: they all focus heavily on competition. The underlying reason for their existence is to defeat the competition, overlooking the customer as the main driving force behind the evolving marketplace.

This article will introduce a new approach to strategy that is built around the customer. By focusing on what the customer is trying to accomplish, and treating all offerings as solutions to their inherent issues, the new theory advises on positioning relative to the customer, as opposed to positioning relative to the competition. While competition remains a very important factor in strategy, rather than defeating the competitors in direct combat, this technique shows the way to win the battle before it actually starts."

ManyWorlds.com Review (June 2004) of the White Paper "Strategy, Redefined.":

"The focus of this detailed and dense 11-page paper is spot on: The proper center of your business universe should be the customer, not your competitors. Mitreanu does not deny the importance of knowing how to tackle the competition, but clearly believes that an overemphasis on this aspect of business theory has damaged the effectiveness of business strategies. In claiming that a customer-centric approach to strategy is new, Mitreanu oversteps the reality of the literature. Plenty has been published with an emphasis on the customer, including the "co-opetition" literature. However, the many thought-provoking elements packed into this paper make it a valuable addition to the literature.

As Mitreanu sees it, the breakdown of standard approaches to strategy (perhaps best exemplified by Porter’s five forces framework) is rooted in an accelerated free circulation of information along with a dissolving of industry boundaries. The only effective response, he argues, is to build strategy around the customer, seeing all offerings as solutions to customer issues and dynamically positioning around those issues rather than around the competition. Strategists can begin this process by grasping the "hierarchical issues tree". This is a dynamic tree that incorporates three problem solving stages: identifying status issues, designing solutions, and acquiring solutions. The primary objective of the first stage is issue simplification. The second stage begins by identifying an ideal solution, then moving towards the best solution. The third stage aims to match issues with real-world solutions.

Mitreanu goes on to look at the pressures in a transaction, with the resulting information-based temporary equilibrium being referred to as the "Transaction Level". The strategist can then move on to mapping a solution. The paper suggests that, depending on the way an organization operates, value generated by a solution may affect the customer at the strategy level, the organization level, or the process level. Mitreanu then delves into the details of the dynamics of solutions as affected by "the commoditization force" and "the innovation force". Building on his account of the dynamics of an offering, Mitreanu next redefines business strategy as a hierarchy of primary components: Customer Issues Centricity; Solutions Portfolio Alignment; and Solutions Interrelationship.

The latter parts of this paper examine strategic advantage sustainability, outlining three major strategic options for adding new solutions to a company's portfolio, then reinforce the customer-centered strategic perspective with a healthy reminder of the critical importance of execution. The paper concludes by pointing out four advantages of this approach to strategy, including its utility in explaining broader economic issues such as offshoring and the strategic importance of IT."

Also published at:

ManyWorlds.com, June 2004
See http://www.manyworlds.com/exploreCO.aspx?coid=CO622041048150
Note: Rated 4 out of 5 by the editors, the paper continues to be one of the "most popular assets" for the overall website, as well as for the topics of Business Strategy, Business Models, and Marketing Strategy.

Value Based Management.net, August 2004
See http://www.valuebasedmanagement.net/articles_mitreanu_strategy_redefined.pdf

BNET, August 2004
See http://jobfunctions.bnet.com/research.aspx?compid=16888&docid=95897
Note: The paper was one of top downloads under the topic of Strategic Planning Process for the month of August 2004.

BetterManagement.com, September 2004
See http://www.bettermanagement.com/library/library.aspx?l=10620
Note: The paper was the featured article under the topic of Performance Management for the month of October 2004.