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Leveraging Analytical Tools for Competitive Strategy: The Power of the Four Actions Framework

Chapter 2 explores crucial analytical tools and frameworks for formulating effective business strategies. Emphasizing the Strategy Canvas and the Four Actions Framework, the chapter highlights the importance of shifting focus from competitors to alternatives and from customers to non-customers. It outlines key actions: Eliminate, Reduce, Raise, and Create for design innovation, with practical examples from industry leaders like Yellow Tail and Subway. Key characteristics of a strong strategy include focus, divergence, and memorable taglines to establish a compelling market presence.

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Leveraging Analytical Tools for Competitive Strategy: The Power of the Four Actions Framework

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  1. Chapter 2:Analytical Tools and Framework Team 6 Garrett Johnathan Alex Allison

  2. Strategy Canvas • Compares core competencies for competition

  3. Strategy Canvas in Blue Ocean • Focus on: • Move focus from competitors to alternatives • Move focus from customers to noncustomers • Don’t Focus on: • Offer more for less • Choose between differentiation and cost leadership

  4. The Four Actions Framework

  5. The Four Actions Framework • Eliminate- the first question ask you to look at your competition and how you can eliminate factors that you have long competed on • Reduce- this factor forces you to look at overdesign of product and over serving customers • Raise- here you must eliminate compromise • Create- discover new sources and create new demand

  6. [yellow tail]’s Framework Eliminate Reduce Wine complexity Wine range Vineyard prestige • Wordy terminology / distinctions • Aging quantities • Above-the-line marketing

  7. [yellow tails]’s Framework Raise Create Easy drinking Ease of selection Fun and adventure • Price versus budget wines • Retail store involvement

  8. Subway’s Framework • Eliminate • Unhealthy atmosphere • Raise • Food standards • Reduce • Sugary drinks, fatty sandwiches • Create • Fresh fit combo meal

  9. Three Characteristics of a Good Strategy [yellow tail] • Focus • Easy Drinking, Ease of Selection, Fun/Adventure • Divergence • Set themselves apart as a new, laid back wine • Compelling Tagline • “Go-To” • Conveyed as America’s go to wine • No knowledge of classified wine necessary

  10. Three Characteristics of a Good Strategy • Focus • Divergence • Compelling Tagline • These serve as an initial litmus test of the commercial viability of blue ocean ideas

  11. FOCUS • Identify key factors of competition • EX: Southwest Airlines • Quality, Speed, Price, Innovation… • Choose on factor • Focus on that one factor

  12. DIVERGENCE • Break out of the common competing Techniques • Price wars, meals, seating • Revolutionize the industry • Point-to-point travel between midsize cities • Previously: hub-and-spoke systems • Make changes to the way things done in the industry • EX: Southwest Airlines

  13. COMPELLING TAGLINE • “The speed of a plane at the price of a car-whenever you need it.” • What is a tagline? • A short descriptive phrase • Tagline should be: • Short and Clear • Truthful • Updated • EX: yellowtail • A fun and simple wine to be enjoyed every day

  14. The Strategy Canvas

  15. Reading the Value Curves • 1st question value curves answer is does the company deserve to be a winner? • Does it meet the three criteria: focus, divergence, and compelling tagline • A business does not want it’s value curve to converge with that of its competitors • Does your company’s value curve show high levels across all factors?

  16. Reading the Value Curves • Incoherent strategy: company does not have one main goal, but has many independent sub strategies • Are there strategic contradictions? • Is your company internally driven? Inside-out strategy or outside-in strategy?

  17. Key Points • Diagnostic and Action Framework for building a compelling strategy • Create unique identity and value • Use the Four Actions Framework to create a new value curve • Focus on one key competitive factor and differentiate yourself from your industry • Using the value curve can help reveal strategic information that can aid a company in gaining market share and becoming a powerhouse in their industry

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