Leg 3 has started. From Capetown to Melbourne (I)

eleonoraescalantestrategy 11 Dec 2017 Leave a Comment

it is cold outside Good Morning to all of you. Before starting, I would like to wish you a beautiful December festivities season. I hope you had a wonderful weekend. Despite the weather. These are cold and snowy times for many of us in the world. Some countries woke up with temperatures below zero Celsius, and even for us, the Central American Tropics, we have experienced low temperatures between 8C and 15C degrees Celsius which is cold by our region standards. I hope the weather will not be so cruel for our seven teams when sailing from Cape Town, South Africa to Melbourne, Australia. The teams left Cape Town yesterday. At the time I am writing this post, Team Sun Hung Kai/Scallywag is leading the teams. But in sailing, any team can lead today, and another one tomorrow. Leg 3 is 6,500 nm. “The fleet has gone South from Cape Town to the Cape of Good Hope, and they are expecting storms and waves of the Westerly Storm Track before arcing back to the north to cross the Great Australian Bight, enter the Bass Strait and so into Melbourne!”.

As far as the material to cover for Leg 3, please find the following information: The outline for Leg 3 is here. Eliescalante Leg 3. Outline.jpg

As you can read, the Leg 3 Outline is completely different. We will make a shift from outside to inside. As the fleet from the Volvo Ocean Race took the time to repair and fix their boats in Cape Town, right now we will focus all our attention on the internal constituents of our company. All that we have seen during Leg 2 has been the industry environment and the customers’ segmentation. Leg 3 has a different dynamic. The focus will be on the interface between strategy and the internal resources and capabilities of the firm. As usual, I am using professor Robert M. Grant book as the main bibliography reference point, but we will see additional material from other authors and new examples during our trip to Melbourne.

its about having.jpg Resources and internal capabilities can constrain or expand options for your choice of strategy. A strategy to exploit an un-served market in the Automation and Robotics industry might not be feasible if your firm lacks the necessary financial capital and human know-how. “Likewise, a strategy that would require substantial entrepreneurial behavior on the part of employees, for example, would seem doomed from the beginning if your people practices reward years of service over individual performance.

These internal capabilities–especially the human ones–matter greatly and are too often overlooked by strategists. A strategy can succeed only if it has the backing of the right set of people and other resources; these must be properly aligned with the strategy”.

Eliescalante Leg 3. Theme 1 Resources and Capabilities.jpg

Observing the figure above, we can see that strategy is concerned with matching the internal firm´s resources and capabilities to the opportunities that arise in the external industry environment. I also would like to add there is a need to continue doing research on this topic. Particularly since technology has disrupted our old business models.

I truly hope you can enjoy Leg 3. It is a beautiful topic, and I will dedicate a lot of time to define and share with you several conceptual aspects which can give you an understanding of how to start to add digital capabilities without being lost in the intent.

Let me finish today with an example of how the digital technologies can change a business strategy. I have added technology as a key internal strategic resource for the firm. Let´s see an example. As I have mentioned to you in the past, the retail coffee shop Juan Valdez from Colombia started operations in El Salvador a couple of years ago. As part of their promotion customer appreciation services, Juan Valdez had a frequent card by which after five purchases, you can get a free coffee beverage. Just a couple of weeks ago, Juan Valdez launched a digital mobile application to accumulate points after each purchase (very similar to Starbucks Stars Rewards Program). Juan Valdez digital application will enable the firm to understand the purchasing behavior and frequency visits of their clients. And these results will be immediate. Data information will be instantly gathered, segmented, analyzed. This simple digital application can be used as a source of data for strategic decision making. Of course, this digital system will allow Juan Valdez to be near their clients and have a clear and better clients understanding of their local preferences.