STRATEGY BY SECTOR and free report

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A recent Strategy and Business report considers Winning Moves for 12 Industries.The focus is on internal factors that make a difference whilst recognising that a wide range of external factors have significant impact

From the internal perspective success is determined by different mixes of capabilities that organisations deploy such as knowledge,processes,tools,skills,people and organisational design.

Two types of overall capability are mentioned:

1.Competitive necessities ( such as a reliable network for Telecom operators and environmental/safety requirements for oil companies)

2. Distinctive capabilities –  that are unique to the company’s identity, linked to its strategy and hard for competitors to copy. Furthermore a company’s operating model,investment decisions and product/ services mix enable distinctive capabilities.

The Booz and Company team reviewed 12 industries and identified one or two distinctive capabilities that are sources of strength. The full report provides in depth examples

1. Chemicals – deploying natural supply chains using all functions such as customer service,marketing,logistics and storage effectiveness to serve customers in a differentiated way. This includes implementing rigorous production and distribution strategies tailored to customer needs
2. Industrials – improved and holistic product management ensuring product managers have accountability and a cross functional role giving them authority for timing of innovations,pricing,channel strategy and overall success of product portfolios and life cycles
3. Aerospace – whilst the industry is poised for intense growth it also is becoming increasingly competitive. Faster and more intense innovation is a major capability involving shorter product launch cycles and increased RandD investment
4. Technology – the combined trends of cloud computing,connectivity and big data analytics are forcing a rethink on ways of doing business. This represents an opportunity for technology companies to become active partners of industry verticals ( the value chains of interrelated companies in particular sectors) as they embark on digital transformations. The capability required is one of designing new customised operating models for new types of customer travelling down the digital road
5. Automotive – a key capability is optimising operations for greater profitability by getting the fundamentals right : creating new vehicles that the market wants,aligning supply with demand and investing in smart technology. Furthermore developing agile response systems deep in the supply chain is essential – for example relying on component production in one geographical area can be high risk as evidenced by the impact of floods in Thailand and the horrific tsunami in Japan
6. Pharmaceuticals – the industry can no longer rely on prescription drug blockbusters.distinctive new capabilities systems will need to be built to take products to market with focus on emerging markets. The report details new approaches such as value enhancing patient services,multi stakeholder marketing,closer coordination among teams ( medical,sales,marketing,market access and pricing), improved stakeholder engagement in the distribution chain ( wholesalers,pharmacists,patients)
7. Consumer Packaged Goods – shopper marketing is one capability that represents an area for growth . The aim is to influence consumers at time of purchase and includes components such as in store shelf displays,digital kiosks,smartphone apps and e coupons – all of which generate digital data that marketers cause to refine their approach . One trend is that those companies that are critically aware of and making best use of this approach are outpacing their competitors.
8. Healthcare – a key capability will be to ensure system level coherence with shared incentives and seamless interactivity between providers,payers and patients
9. Telecom – the key capability requirements are development of new applications and services, creation of excellent user interfaces and delivery of excellent customer service
10. Retail – the report mentions that retailers will need to upgrade their merchandising capabilities holistically by integrating people, IT systems, analytical engines,price elasticity,promotion returns, store clustering,processes ( including promotions,campaign tracking,performance measurement), organisation design ( positioning roles,responsibilities and decision making around the ” centre of gravity” of the enterprise)
11. Retail Banking – the banking sector is hyper competitive and there is a strong need to differentiate with capabilities that set organisations apart. In general there is a need to develop customer oriented systems . Furthermore companies such as Amazon,American Express, UPS have converted capabilities built for internal use into new revenue sources and every bank should do the same
12. Wealth and Asset Management – a capability opportunity can be gained by implementing vibrant systems that solve real customer problems and transform the client- advisor relationship. New information technologies such as tablet computers, 4 G networks, cloud computing have reached a tipping point allowing firms to run their operations and engage with clients in innovative and more efficient ways.

This useful analysis prompts consideration of other sectors and the distinctive capabilities that they will need

Strategy books 

Useful strategy websites

Strategy and Business

McKinsey Quarterly

Harvard Business Review

MIT Sloan Management

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