The word “Business” means many things, but in chapter six, we refer to understanding the market, the design of business strategy and competitiveness. It is the final element in the Balanced Breakthrough model and helps us determine whether a new idea can be viable in the larger ecosystem. No strategist worth their salt can ignore the classics of the discipline from Sun Tzu, Porter, Clayton Christensen, among others.

While chapter six does introduce some classic strategic frameworks from the masters, its real focus is the introduction of a new logic of strategy. The hypercompetitive, global nature of the market now forces us more than ever to strive for distinctive value over incrementalism. As Sun Tzu said, “[success] without fighting is the true pinnacle of excellence.”

What seems to be working

  • The new logic of strategy is every bit as important today as it ever was.
  • Given its runaway success, the story relayed about Apple’s strategic intent with the launch of iPhone seems worth keeping, even though it is a much used example.
  • Porter’s 5 is a classic and still useful to force perspective on market competition.

Areas that need more work or input

  • We still believe Scenario Planning is worth including but it seems like an example is really needed to illustrate how it can be used.
  • The Business Model Canvas from book Business Model Generation is a no brainer addition. We’ve got to include it.
  • With regards to references, books on this topic are coming out daily. One major addition to our list would be Good Strategy Bad Strategy by Richard Rumelt. Do you have any others to suggest?
After you’ve read the chapter, please post your thoughts, constructive critique, and suggestions below. Thank you!
  • joegray

    Porter’s five forces and Scenario Planning both certainly deserve the attention they receive here. Yet I feel that the order in which you introduce these approaches may work better if reversed. In my experience, starting with scenario planning aids greatly in the identification of opportunity areas and the distinctive value you should potentially deliver (as in your Shell example). Once you’ve identified opportunities, Porter’s Five Forces is an extremely valuable tool for understanding just how “distinctive” and competitively sustainable the value you plan to deliver will be in the marketplace.

    It may also help to play out a full example of Porter’s Five Forces in order to demonstrate how a given brand avoided (or could have avoided) being blindsided by a potential entrant or substitute. The fact that Porter’s Five Forces urges teams to look at the competitive environment more broadly and consider longer-term threats is one reason it’s such a powerful, enduring tool (and why it beats tools like SWOT which tend to be more narrowly focused on the present).