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Strategic Learning

In today’s fast-paced market, many businesses face competitive erosion where once profitable segments stall. Key factors include product commoditization, shifting customer preferences, increased competition, and evolving supplier dynamics. Companies must adapt by cutting costs, focusing on higher-margin areas, enhancing operational efficiency, and innovating continuously. The Red Queen Effect highlights the necessity of staying agile even as margins diminish. Understanding and implementing a distinct strategy—choosing to perform activities differently from rivals—is crucial for long-term success and sustainability.

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Strategic Learning

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  1. Strategic Learning Dr. Roy Glen

  2. Competitive Erosion exercise • Think of a part of your business that used to be highly profitable, but now is not. • What has accounted for the erosion ? • Product has become commoditized • Customers no longer willing to pay for quality, features or service • Power has shifted to customers and/or suppliers • Too many competitors • Other

  3. What is your company doing? • Slashing costs • Cutting low margin business • Focusing on higher margin areas • Operational Efficiency programs • New marketing initiatives • More focus on innovation • Looking for acquisitions

  4. The Red Queen Effect

  5. The Red Queen Effect: running faster to stay in the same place • Vanishing margins • Spreading capabilities • Competitive Imitation • Erosion of strategic differences

  6. What is Strategy ?Michael Porter “The essence of strategy is choosing to perform activities differently than rivals do.” “It is the system of activities that provide the defense against imitators”

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