This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/strategic-management-frameworks-and-the-delta-model-putting-customers-before-products-1234 BENEFITS OF DOCUMENT 1. Learn the most influential business strategy frameworks in the world 2. Complement Michael Porter's Five Forces and the Resource Based View of the Firm (RBV) with the Delta Model 3. Learn how to find new sources of profitability in a networked economy using the Delta Model DOCUMENT DESCRIPTION In spite of the enormous proliferation of competing schemes in the business strategy literature, there are two fundamental paradigms that have emerged as the most influential in the last two decades. First, Competitive Positioning, as proposed by Michael Porter from the Harvard Business School in the 1980s, and, second, the Resource-Based View of the Firm that evolved during the 1990s. Porter's framework and the Resource-Based View of the Firm basically perceived the primary role of strategy as achieving a unique competitive advantage. I emphasize the word competitive because that seems to us to be the common principle. In this sense, the objective of strategy becomes beating your competitor either by excelling in the activities of your value chain that allows you to establish a dominant position in your industry, or through the mobilization of unique resources and capabilities. Although these frameworks have often been presented as conflicting views, since they emphasize different dimensions of strategy, they can richly complement each other. However, they both can be enhanced by adding a missing perspective: the Customer. Surprisingly the customer does not emerge as the key player in either of these two frameworks. If you take Porter literally, the customer is represented by the "Buyer" - one of the Five Forces Model - whose bargaining power we should resist or diminish. In that respect, the customer constitutes an additional element of the rivalry that we need to overcome. In the Resource-Based View of the Firm, there is no explicit mention of the customer. By contrast, the Delta Model places the customer at the center of strategy, and defines the essence of strategy to be achieving customer bonding. I also feel that the new technology surrounding the Internet provides novel and effective ways to link to the customer and to the extended enterprise, opening up new sources of strategic positioning that should be properly evaluated.

1. The Strategic Management
Frameworks and the Delta Model:
Putting Customers Before Products
Enrique R. Suarez
International Management Consultant & Professor
suarezenrique@yahoo.com
Based on the Teachings of M.I.T. Professor Arnoldo Hax
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2. Elements of Industry Structure: Porter’s
Five-Forces
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3. Merck’s Value Chain
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4. Porter’s Winning Formula
Pick a business in an attractive industry in
which you can excel. Notice that Porter’s
Framework stressed rivalry and competition.
Therefore, an attractive industry is one in
which we can achieve as close to a
monopolistic position as possible. In turn, the
message of the value chain is to achieve
sustainable advantage by beating your
competitors, if not in all, at least in those
activities that are most crucial to competition.
Strategy is War!
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5. The Resource-Based View of
the Firm Framework
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6. Continue…
l Intangible assets include such things
as company reputations, brand names,
cultures, technological knowledge,
patents and trademarks, and
accumulated learning and experience.
These assets often lay an important
role in competitive advantage (or
disadvantage), and firm value.
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7. Comments on the Resource-Based
View of the Firm
l Corporate resources and capabilities rather
than industry structure are the causes of
superior performance.
l Resource-Based View of the Firm
should therefore complement rather
than replace Porter’s Framework
l It emphasizes the important concept
of sustainability
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8. Continue…
• The Delta Model (after the Greek letter
delta, standing for transformation and
change) encompasses a unique set of
frameworks and methodologies that
grew from Mr. Hax’s conviction that
changes being experienced in the world
of business were of such magnitude that
existing managerial frameworks had
become either invalid or incomplete.
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9. Strategy as Rivalry
• First, it puts our competitors at the center
of our management process. Competitors
become our driving force, our relevant
benchmark. We look at strategy, and
consequently at management, as rivalry. In
order for us to succeed, we have to beat
someone.
• Strategy is destructive; strategy is war. As
recent history has confirmed, again, wars do
not have victors.
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10. Strategy as Rivalry
• Third, the excessive concern about competitors can lead us,
consciously or otherwise, into imitating their behavior. Our
products begin to take on similar characteristics of those of
the leaders.
• The development of our new products adheres to the
prevailing standard of the industry, the channels of
distribution that access our customer base are
indistinguishable – in other words, the industry begins to
converge into a well-established set of norms and standards.
The result of this congruency leads toward the commoditization
of our business, which is the worst possible outcome for all
players.
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11. Continue…
• For superior financial performance to be
sustainable, not only should the business
aim at achieving a solid leadership position,
but this position should be long-lasting,
unassailable, and able to endure the
inevitable changes that the environment will
generate.
• This calls for flexible adaptation to new
circumstances and the will and ability to
transform the organization continuously.
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