4 strategic planning tools for business model innovation and business strategy design
There are strategic planning tools for just about any goal a business executive can conceive of. However, for managers and entrepreneurs who want to innovate their business model, it can be challenging to make the leap from conventional thinking to the kind of creative but realistic thinking from which the next generation of sustainable profits can be built.
Knowing the types of tools you can use for various types of business strategy tasks can get much more innovative results from your strategy development sessions while reducing the time it takes to arrive at good business models.
Tools to map and dominate uncontested market spaces
1. Strategy canvas
The Strategy Canvas is a tool that was first introduced in the book “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne. It is a graph that plots the positions of business competitors in relation to factors important to the customer market. The horizontal axis plots the competition factors (hopefully established through customer knowledge) and the vertical axis plots the degree of supply or level of service.
With this graph, the differences between current and potential business competitors can be graphically represented. The main point of the strategy canvas is to illustrate the divergence between business and market strategies when it comes to customer needs. By using a strategy canvas, you can create a new innovation of value that breaks the conflict between low cost and differentiation, the heart of blue ocean strategy.
The strategy canvas is also a great tool for IP development.
2. Index of strategic control points
This is a tool used to assess the level of strategic control that a company has in its industry in relation to competing companies and organizations. It was best articulated by management consultant Adrian Slywotzky in “The Profit Zone” (a book I highly recommend). The Strategic Control Points Index ranks these control points according to the level of “profit protection power” they confer on a company.
Simply put, it is a simple description of the path to monopoly (or at least near monopoly) power in any business design. The profit protection power of these strategic checkpoints ranges from “None”, “low”, “medium” to “high”. Some examples of strategic checkpoints given by Slywotzky include:
- 10-20 percent cost advantage on commodities (low)
- Product development leadership for one year (slightly higher, but still low)
- Two-year Product Development Lead (Medium)
- Brand, copyright (a little higher, but still medium)
- Customer relationship ownership (registration)
- Chain of super-dominant market positions (top)
- Value chain management (even higher)
- Standards Ownership (Highest)
3.6 Route framework
This analytical tool is another one of the “blue ocean strategy” and masterfully offers strategists a way of thinking across the “six conventional limits of competition” to systematically construct new assumptions and stimulate advances in product or design design. business. The idea is that one of these unconventional ways of looking at the competitive landscape can open a strategic breakthrough.
to) Look across industries – Compete with alternatives and substitutes for your product / service instead of with those that you think are your competition.
B) Look through strategic groups – See how your new strategy can develop within the strategic boundaries naturally assumed in your industry.
vs) Look through the chain of buyers – Consider how you can change the game by changing the “defined top buyers”.
D) Look for complementary products and services – Think about the whole system of your customer’s typical solution (where your current offering could be only a small part).
me) Look through functional or emotional appeal – Examine how you can create a new value curve by adding emotion to a functionally oriented industry or by removing emotion and reducing a product or service to its functional core.
F) Look through time – Adjust your time horizon to a different point or cycle than is typical in the rest of your industry.
4. Business design matrix
The Business Design Matrix is a great analytical tool that you can use to help understand and analyze your competitors’ business models “at a glance”. It is derived largely from the work of Dr. Adrian Slywotzky. The criteria by which you analyze your competitors, as well as your own organization, include:
- Customer selection
- Profit capture system (s)
- Differentiation / Strategic control
- Scope of offers and presence
These four fundamental considerations provide a basis for deciding your marketing strategy, a foundation on which a broader business strategy can comfortably build.