You can approach strategy defensively and fight with competitors. Or approach it offensively and make them irrelevant.
Tim uses relevant and well known case studies to show business leaders how they can leverage a distinct advantage through value innovation, holistic study of your customer experience, and the elimination of wasteful spending.
The most important thing to remember is that strategy is not about you or your capabilities. It’s about your chosen customer and their journey.
8. @PraxentSoftware
What was the hair on fire
problem with the customer
experience at Blockbuster?
Blockbuster takes in almost $800 million in late fees,
which accounts for roughly 16% of its revenue
One customer in California was fined $40 by Blockbuster
for being late in returning “Apollo 13.”
10. @PraxentSoftware
High
Low
A strategy analysis
Movie Rental Industry
Hot Title
Inventory
Blockbuster Video
Penalty
Free
Instant &
Unlimited
Netflix
Price Diverse
Selection
Convenient
Location
Neighborhood
Feel
Friendly
Service
14. @PraxentSoftware
Defensive:
Take the structure of the industry
as given, and position the
company to match its strengths
and weaknesses to it.
Offensive:
Alter the underlying structure and
forces of the industry, thereby
altering the competitive
environment itself.
You can approach strategy defensively
and fight with competitors. Or
approach it offensively and make
them irrelevant.
19. @PraxentSoftware
Segmenting your customers
By attribute
• Working professional male
• Age 28-36
• Lives in the suburbs
• Married with 1.6 kids
• $90k-$120khousehold
annual income
By circumstance
• Busy guy who hates to shop,
needs the perfect fit for an
upcoming interview
• Needs a father’s day gift for a
busy guy who hates shopping
• New dad who has no time just
hit weight loss goal; needs new
clothes for work
24. @PraxentSoftware
Where they
are now.
Where they
want to be.
Mind the Gap
What separates your customer from the value?
• Time
• Distance
• Financial
• Bundled offer
• Negative emotion
• Hard work
• Relational friction
• Reliance on a human
25. @PraxentSoftware
Case study
Netflix
• Removed distance with
DVDs by mail
• Removed relational
friction with no late
fees
• Went on to remove
time and introduced
unlimited streaming
entertainment
29. @PraxentSoftware
Case study
Sunnova
• Sunnova removed
financial distance from
the process of buying
solar residential energy.
• Homeowners lease
solar panels which
produce energy for less
than they pay today.
31. @PraxentSoftware
Examine the entire customer
experience
Before
purchase
During
purchase
After
purchase
Look for and eliminate all
points of friction:
• Time
• Distance
• Financial
• Psychological
• Hard work
• Relational
• Reliance on a human
32. @PraxentSoftware
Is your industry penalizing it’s
customers?
• Silvercar has built an $XX
business by removing the
penalties from the industry.
34. @PraxentSoftware
Decrease cost. How?
Look for wasteful
spending across the
industry and reduce or
eliminate it by a
massive factor.
• Labor
• Real estate
• Capital / Assets
• Manufacturing
COST
35. @PraxentSoftware
Crowd
Sourcing
Leverage crowd sourcing to reduce the labor
cost of design, engineering, problemsolving.
10k contests per
month, $142m paid
out to designers
185k data scientists
competing to solve
your problem
36. @PraxentSoftware
Leveraged
assets & time
• Eliminated cost of
real estate and
labor from the
hospitality
industry by
leveraging the
unused real-
estate of others
• 2M listings (90X more
per employee)
• 640k hosts
• 500k stays per night
• $25B valuation
• Owned properties? Zero.
37. @PraxentSoftware
3D Printing
• Local Motors reduced
cost of manufacturing
by 1000x by leveraging
3D printing
• 5-22x faster process
for a car to produce
(depending on vehicle)
39. @PraxentSoftware
Remember…Strategy is about difference
and being different requires tough choices
Factor A Factor B Factor C
High
Low
Factor D X-Factor
COST
BUYER
VALUEDare to be bad…
So that we can be great.
43. @PraxentSoftware
Remember…Strategy is about difference
and being different requires tough choices
Factor A Factor B Factor C
High
Low
Factor D X-Factor
COST
BUYER
VALUEDare to be bad…
So that we can be great.
45. @PraxentSoftware
Strategy Canvas
Curves International
Price Amenities Equipment
Variety
Workout
Time
Availability
Of
Instructors
Motivating
Environment
Non-threatening
Same Sex
Environment
Convenience
Traditional health club
High
Low
Curves
46. @PraxentSoftware
A case study
BUYER BENEFIT
• Comfortable, non-
threatening
environment
• Friendly group classes
create accountability,
builds community
• Convenient: Located
nearby with plenty of
parking
47. @PraxentSoftware
A case study
COST
• Small 2,500 sq ft
facilities in strip
centers (vs. 15,000
sq ft gyms) lowers
real estate costs
• One class at a time
lowers labor costs