Business Strategy 2 Business Plan Part 2 - Products, Services and Technology | John Colley | Skillshare

Business Strategy 2 Business Plan Part 2 - Products, Services and Technology

John Colley, Digital Entrepreneurship jbdcolley.com

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14 Lessons (1h 3m)
    • 1. Business Strategy 2 Business Plan Part 2

      2:24
    • 2. Critical Evaluation of Leadership

      1:18
    • 3. Vision and Leadership - Starting at the Top

      5:45
    • 4. What Skills Are We Looking For In Management

      6:42
    • 5. What is the Purpose of a Vision Statement?

      3:09
    • 6. Products and Services and Competitive Advantage

      1:47
    • 7. What Do We Mean By Prodcuts and Services

      3:21
    • 8. Why Product Differentiation is Critical

      4:59
    • 9. Product Diversification in Business Strategy

      5:30
    • 10. How Does Quality Management Fit In Your Strategy?

      4:20
    • 11. What do we mean by Competitive Advantage?

      6:14
    • 12. Bowman’s Strategic Clock and Strategic Positioning

      8:43
    • 13. Products, Services and Technology in the Business Plan

      6:22
    • 14. Part 2 Leadership, Products and Services Coming Up Next…

      1:58

About This Class

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Welcome to my Business Strategy to Business Plan Course - Part 2

Discover MBA Level Business Strategy and Create your comprehensive Business Plan simultaneously. Everything you need is here including a highly detailed Business Plan template.  

CRITICAL EVALUATION OF LEADERSHIP

This part of the course invites you to think critically about the role of Management and their skills.  Their vision should be reflected in the Vision Statement.

PRODUCTS AND SERVICES AND COMPETITIVE ADVANTAGE

Our focus in this section is on the Products and Services of the firm and how to create a competitive advantage.

About this Course

Discover Business Strategy to MBA standard - from an MBA (with Distinction from Cass Business School, London) - and simultaneously create a comprehensive Business Plan guided by an award winning 30 year London Investment Banker.

I guarantee that this is a unique course: the only course that teaches you Business Strategy and shows you how to create your Business Plan - at the same time!  The 21 Assignments in this course draw on John's unique experience, including bespoke strategic exercises of his own which you will not see anywhere else.  Step by Step following the incredibly detailed Business Plan template, John will guide you to apply the Business Strategy lessons to create your Business Plan. These will help any students of all levels and in any industry.  

This course has over 160 lectures, over 14 and a half hours of detailed instructional video and nearly 180 downloadable materials (available from a dropbox link you will find at the start of the course).  Despite its complexity, John has created a detailed course matrix for you to use to navigate through the course and understand the synthesis of Business Strategy 2 Business Plan.  There are over 20 Assignments to make the course fun and highly interactive.  The 2 Quizzes will challenge you too!  Every section has an introductory video explaining the learning objectives and lessons in that section.

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Business Strategy 2 Business Plan Part 1 - Fundamental Strategy and Analysis - https://skl.sh/2TnNtZT

Business Strategy 2 Business Plan Part 2 - Leadership, Products and Services - https://skl.sh/2Az9Apr

2nd June - Business Strategy 2 Business Plan Part 3 - Competition, Industry and Markets

9th June - Business Strategy 2 Business Plan Part 4 - Operations and Customer Value

16th June - Business Strategy 2 Business Plan Part 5 - Sales and Marketing

Business Strategy 2 Business Plan Part 5a - Digital Business Transformation - https://skl.sh/2VLbk6b

23 June - Business Strategy 2 Business Plan Part 6 - Financial Statements

30th June - Business Strategy 2 Business Plan Part 7 - Financial Analysis

7th July Business Strategy 2 Business Plan Part 8 - Goal Setting and Performance

14th July Business Strategy 2 Business Plan Part 9 - Growth Strategies

21 July Business Strategy 2 Business Plan Part 10 - Valuation, Exits and Returns

28 July Business Strategy 2 Business Plan Part 11 - Business Plan Synthesis

As the course is published, I will update the links to each course

Enjoy the Course!  If you have any questions or issues, just reach out to me here

Best regards

John

Transcripts

1. Business Strategy 2 Business Plan Part 2: Hello and welcome to business strategy to business Plan on This is part two off my business strategy course. My name's John Colley. I'm a very experienced investment banker entrepreneur. I found it a couple of investment banking boutiques on. I'm really excited to be able to share my business strategy. Have a business plan knowledge with you. In this course, the class is going to be perfect view if you want to better understand business strategy on how to write your business plan at the end of the course. At the end of the whole course, you'll have Britain. Your comprehensive is simply by following the course projects step by step. Now the course itself is divided into 11 separate parts, and every part of the course takes you a step closer to business. You can see 11 parts of the plan off the course here on the screen, and you can see that in this part of the course were in part two. We're looking at leadership services now. We're gonna do this in two steps. The first step. We're going to take a critical evaluation off leadership, which will invite you to think about the bowl of management on their skills. And it's really important as well that the vision that the management has to the business is understood, communicated and captured in the strategy on reflected in the business plan. Then we're going to take a look at products and services and competitive advantage on competitive advantage is one of the key aspects of any business strategy. So it's really important you get your mind around this. In this course, every course project helps you to create your business plan step by step. So in this project, you're going to be asked to drop to write your first draft of your business plan for your products, services and technologies. Okay, so that is going to be what we set out to provide templates for you and some drafting notes . So it's gonna be a lot made as easy as possible for you. But you can also reflect the knowledge you're going to get from the course itself on. Take that depth of knowledge and understanding of Mrs strategy, put it into your business plan. Now I'm really excited to share this with you, and I know you're gonna absolutely love it. So get going. Hippie and roll button. Now on. I'll see you in the course. So this is business strategy to business plan? This is part two off my 11 part course on. I know you're gonna absolutely love it. 2. Critical Evaluation of Leadership : critical evaluation of Leadership Section Learning objective. This section invites you to think critically about the role of management and their skills . Their vision should be reflected in the Vision statement section introduction. An important part of strategy, its conception and execution depends on the leadership of the organization. This is why this section is here. We want you to think critically about the contribution off the business leadership to setting the strategy and delivering it. Does the organization benefit from a visionary leader? We examine the good and bad traits of senior management and follow this up with a summary off the management skills we think are important. The management should be responsible for setting the initial direction of the strategy through their vision statement. So we discuss what it is and its purpose in our project. At the end of this section at the end of this section, you will have a new perspective on management and leadership, which will enable you to critically assess the leadership often organization 3. Vision and Leadership - Starting at the Top: vision on leadership starting at the top in approaching our analysis asked business strategy formulation. Andi, our business plan organization. We have to start somewhere. So let's start at the top and let's look at the management on. Let's look at vision on leadership. Senior management are clearly responsible for leading the business. Yes, they will report to stakeholders, investors, the owners of the business because they may not be the owners. Sometimes they are. But this means that they have a responsibility for providing vision and leadership on this includes that the fact that they have to actually start setting the culture on the whole feel off the organization, because if they are really harsh in authoritarian, that sort of style will put permeate down. Whereas if they're more inclusive and delegating and mawr involved with people, then they will get that sort of organizational structure and environment. So they're very influential on the culture of the organization, and it's up to them to set the tone. They have to align everything in the business with strategy. So this is all the things we're going to talk about internally and externally with the business. It's their responsibility to get all of this, pointing in the same direction and working together on. Of course, it's critical that they provide a leadership style that encourages the people below them to work effectively. And this means working together as teams and therefore teamwork is a critical element off the responsibilities off a leader. So leadership is one of those topics which I could actually probably write an entire course on. But let's just try and focus for the moment on what we are looking for in a good leader, because when you're evaluating and presenting your management to investors or whatever, this is the sort of thing that they will be looking for as well. Good leaders are effective communicators. They are people who can basically speak to anybody of whatever level, whether it's investors or it's the guy sweeping the corridor in the in the office canteen. But they need to be able to explain what they want down, how they want to do it on. To get across the reasons why it's important. Communication is absolutely critical. They must be accountable and responsible. They might be at the top of the organization, but this doesn't mean to say that they can blame somebody else all the time. They know they have to take responsibility for everything that goes on in the organization , and the term the but stops here fundamentally applies to them. They need to be long term thinkers. This is where the vision bit comes in. The whole point about business strategies were looking and trying to set the company up for the future. On this vision, this long term thinking has to come from the top. Certainly people below them can contribute to it, but they need to have that perspective right from the get go. They need to be self motivated. There's nobody around them to get them to motivate them. They need to be enthusiastic, keen toe work. They don't need to be pushed into it, their investors and the owners. The company shouldn't be cracking the whip or chasing them. They should be very, very dynamic and self motivated. Confidence is important as well, because you need to come across and instill confidence in others. And if you don't have that confidence in yourself, that is not going to happen. People orientation is very important. They really need to care about the people that they have working for them. They have a big responsibility. So show a socially, economically and emotionally for the people who work in their organization. And if they're not interested in people, then that will be very difficult for them to do effectively. They need to be emotionally stable. You can't have people going off the handle the whole time. You need people who can deal with crisis situations calmly and decisively on, not be in a flap or get or het up or go, you know, so basically threw their teddies out. The pram. Emotionally stable. Very good thing for leader. So what makes a bad leader? Well, pretty well, the opposite of everything. I've just told you people who are too bossy people who are fearful of change, unwilling or unable to communicate, effectively dismissive off the ideas of others not invented here syndrome will only push ahead with their ideas. And if somebody comes up with a ah, good idea, they won't listen to them. They'll just dismiss them out of hand. What a waste. What a waste that would be lacking empathy, which is the opposite of being interested in people inconsistent, prone to blame, others if there's a problem, it's not my fault, you know? It was even though you're the CEO. No, no, no. I'm gonna punish this guy because although it might my mistake, I need a scapegoat for it. Not very good management. Andi, of course, in decision is is absolutely appalling. They have to be decisive because if they don't take that lead and set that tone, then it won't come from others. So that's a quick introduction to vision and leadership in this section. We're going to explore it a little bit further, but I want to start at the top, and I want to put into your mind the importance off having strong, decisive, clear, forward thinking, visionary people running the organization. 4. What Skills Are We Looking For In Management: take a look now at management skills and ask the question. What skills are we looking for in management? Management skills are learned and developed. This is something which you can gain from experience. We're not talking about things you're born with, and you know things like charisma. We're talking about practical, useful skills on its We will go through them in some detail, but it's actually something which, when you're evaluating somebody for a managerial position, you need to ask yourself whether they've got these skills because it's a critical part of the job they're gonna have to do. It's no understatement to say that good management skills are critical throughout an organisation, So we're not just talking about the management skills off the people at the very top of the organization. We're talking about anybody who has any responsibility all the way through. And hopefully, as these people grow and develop, they'll get promoted and rewarded, for you're having the right skills and delivering the right results, management skills and leadership skills we've just touched on. Leadership skills are often seen very much as interchangeable, but I specifically want to address management skills in this lecture, Robert Katz Waas on American social and organizational psychologist, And he had identified three basic types. Off management skills, technical skills, operational design, sales and marketing. So these these aware you actually know the technical ins and outs off details. Now an example. And I'm gonna use my military experience here as an example when I was a troop leader and I was in command of of, ah, troop of three tanks in the British Army, you know, we needed to know as the officers responsible for the troop how the guns worked, how toothy servicing work, how the radios worked. You know, we had to be able to do every job in the tank, so it was important that we knew what the servicing shed your waas. We knew how to change a track on on the tank, so those technical schools were absolutely critical. But why? You also needed to have conceptual skills. So you know, we were supposed to be doing the thinking. We were supposed to be showing initiative, anticipating solving problems, dealing with situations that are unexpected as they arose. So conceptual skills, very important and of course, critically. We needed human and interpersonal skills because you were leading people, and although you were the officer and they were not officers, they were non commissioned officers and in fact, just private soldiers. You nonetheless had to teach to treat them with a great deal off entirely due respect, you know, for the skills they had on do you needed to nurture them and develop them on. You know, you wanted them to be motivated and enthusiastic and to be part of the team part of the troops. There was an awful lot off human and interpersonal skills that came into that particular job. It's a very good metaphor for explaining what Cats has identified. Let's talk about a few practical organizational skills, and I'll keep the metaphor running planning. Obviously, you need the ability to plan. Now that thing can include all sorts of different things. I mean, within the military, you know, you were planning ahead for the troop activities. When I was escorting second in command, I was planning training. I was planning events, going off site, doing, you know, whether it was skiing or adventurous training or, you know, all sorts of different things. That planning was critical. On one event, I ran a combat stress related study weekend, Onda brought over some speakers and turned into a big event that required a lot of planning , skills planning and organization skills. Really important Communication, of course, is critical. When you're an officer in the army, you know, you have to be able to explain what you want down on to give orders, which you expect to be obeyed. But you give them in a way that is not it sounds very in civilian life. Sounds very dictatorial, giving orders. But, you know, you gave clear instructions and you set the tone and people got things done. Decision making was another one where, you know, you put into a situation where you know, you had to make a decision whether you when you were talking about being out in the field and we're on exercise on, we were advancing to contact on. We had we came across an enemy position. You had to make decisions about what we're gonna do next. You have to report the enemy position on, decide quickly how you're going to tackle it. A delegation. Equally important, you know, you have to be able to say well, the least asking to be done, and I want you to go and do them and then come back to me and report to me when they've done and explained that everything's being done properly. It's a delegation, and it's in a civilian sense. That's a critical part off any business that you can't have everything done by the CEO. That's why he has a board of directors. That's why he has a management structure problem solving really important. Clearly, you get faced with a problem you need to solve it on. This was, you know, something again which you found in the army because you couldn't go on. Ask somebody more senior to you, you know, to solve the problem. If you were faced with the problem, whatever it waas whether it was in the camp where it was in the field, you know, you had to get on and come up with a solution for it. It was interesting when I was being assessed for the Royal Military Academy. Santos. One of the things they tested you on Well, what they called command tasks. And they gave you a situation where you had to get a barrel from a to B across an obstacle and you had a couple of little bits of open on a couple of planks and you have the other six guys in the squad and you had to come up with a solution on. Then tell them how to. You wanted to organize and get the barrel for me to be on. That was a critical part of the assessment, believe it or not, for officer training school on. Of course, motivation is really important. You need to motivate the people around you on, make them want to work with you and make them want to work for you on make them feel enthusiastic and part of the organization. So I hope there's have been a few little illustrations off why practical organizational skills are important on those are again illustrations off the importance off having the right skills throughout your organization in order to make sure that as you develop your business strategy, implementation is going to effectively happen 5. What is the Purpose of a Vision Statement?: take a look at the purpose off a vision statement. Many companies have got mission statements and vision statements. We're going to look a vision statements in this this'll lecture and try to understand why they're important and why they're useful. In essence, what they set out is the long term vision off what the company wants to achieve over the next 5 to 10 years. We need visionary management to come up with the vision on. Then we need them to be able to communicate their vision on. That's what they use the vision statement for its a defined direction for the company over the medium and long term. A vision statement to be effective needs some core competences, some core aspects to it. And here are some off the key things, which I think you have to find in a vision statement for it to be effective, the visions that clearly needs to be forward looking. It needs to lift you and take you into the distant future and make you feel like you're looking, and you get the understanding off what the company is going to be like a way down that road . It needs to be uplifting, motivational, aspirational. There has to be a positive reason for you what to want to go with this business into the future. On that motivation and aspiration needs to be brought into the vision statement, so you feel very positive about it. The statement should reflect the existing culture and core values off the business. So if you were looking alike looking at something like Apple, then you know you obviously want something that reflects the the excellence, the design, the commitment to quality to continual innovation, all these sorts of positive things which are part of that organisation's inbred culture. The statement needs to incorporate benefits and improvements for the organization going forward. The organization can't stand still. It must develop. It must improve in the future with innovation and making the whole experience for its employees more positive. So there's there's lots of positive future developments which must be expressed through the statement, and it should underline the main raison de tre, the main reason for existence off the organization with some real purpose to it. It's difficult again, without examples, but I'm sure you can understand what I mean when you want to be to understand clearly you know what the purpose and what the goal of the organization is. So that's a quick look at vision statements on the purpose off them. They are important, they are helpful. And if you're trying to put together a business strategy, you need to be able to communicate the long term strategy on. That's where the vision of the management is communicated through a vision statement. 6. Products and Services and Competitive Advantage: Products and Services and Competitive Advantage Section Learning Objective. Our focus in this section is on the products and services of the firm and how to create a competitive advantage section introduction. Now we come to the first major section in the course, dealing directly with both the business strategy on the business plan. Note that the last lecture explains the content of the business plan on the headings you will have to cover. These can be downloaded as a PdF with slide deck in the resources station. The main emphasis of this section is to identify how to create products and services which are competitive, have unique characteristics. Andi are differentiated from the competition. This is at the core of strategic advantage. So we discuss product differentiation, diversification, quality management, competitive advantage and provide Bowman Strategic Clock as a very useful framework to help you to think about the strategic positioning of your products and services in the market. The section concludes with the first business plan assignment, which will enable you to complete the products and services section off the business plan. Based on what you have learned in this section, use the business plan template, which is provided To do this at the end of this section At the end of this section, you will be able to understand how to strategically position a product or service in the market and have the frameworks to understand the key aspects of competitive advantage. 7. What Do We Mean By Prodcuts and Services: ask a basic but important question, which is what do we mean by products and services? If we're going to start to look at products and services within a business which is obviously a key part of any strategic analysis, we need to have a clear understanding of what we're talking about on its it is sort of inherently obvious, but I think it's worth making the point and putting a few markers down. In essence, a product is a tangible item which is in sale on the market. Where is a service is an intangible item, so obviously, if I make a car that's tangible. If I provide a theme, the some help with the servicing off that car, you know, checking the oil and all the rest of it, that is a service. The two related on products and services are often closely aligned because obviously you need to have the car in order to offer the service. If I sell an online course and then provides some coaching afterwards. Although the online courses a product and arguably it's Elektronik, so it's probably intangible is not something you could feel, but you can see it. But the coaching is intangible. You can't touch will see that. So I hope you see the difference between those two. A product line is a group off related products under the same brand, and a product line could be related within its own. The evidence itself by functionality, target market price range or, indeed, just the brand of the company. The obvious one is if you think about Hinds with their 57 varieties or their Kellogg's with their breakfast cereals. But they've got breakfast cereals will be a product line, but then they've got there breakfast bars, and they've got all their other different lines, so you can see how it's a collection off products which have something in common on. I've already explained what those things might be now. A product mix or product portfolio is the complete set of products and services offered by the company. So you'd look at Kellogg's or Hinds and you look at their entire collection or products or services, and that would be their product mix or their product portfolio. Andi, obviously following on from what we just said about product lines within the product portfolio, the next level of differentiation would be the product lines, products and services change and adapt all the time. The market doesn't stand still. And if you're in business, you need to be continually looking at your products and services on keeping them up to date innovating. Investing in R and D because as one product or service becomes out dated. Inevitably, something replaces it in the market. The obvious example is Blockbuster video. When people stopped renting actual physical video cassettes and started streaming from Netflix, Blockbuster went bust on. Netflix took its place. So you have to be continually aware that your products and services do not stand still in the marketplace. So that's a little introduction. What do we mean by products and services important to put a mark it down but will go on to explore a little bit more about some of the characteristics of products and services, because you need to be thinking about them strategically in your strategic analysis and in preparation for putting your business plan together 8. Why Product Differentiation is Critical: Let's discuss a really important issue now, which is product differentiation on. I want to explain to you why, for your business strategy, this is so critical. Product differentiation is essentially the thing that makes a product unique. Often we talk about a U. S P, a unique selling proposition or unique selling point. And it's this particular point, this feature, whatever it happens to be, that differentiates the product from its comp competition. And it's not only helping the product to differentiate from from its product competition, but it helps your firm your business to differentiate your products and services from your rivals. So it has a really important economic factor on marketing factor in the whole of your business strategy. And it's absolutely the court when you go in and visit venture capitalists to try and raise money. One of the things they always want to know is what is three unique selling proposition? What is the unique selling point about this product or service that is going to differentiate it for the market? It's absolutely critical on therefore, when you're doing your marketing and we'll look at marketing later on when you do your marketing, getting that message. Getting that point across to your audience that your product or service is in some way unique and therefore stands apart from the crowd is absolutely vital Now. You can differentiate, of course, the most simple basis on price so you can have a pricing hierarchy. And if you think about it, if you go into supermarket, you can either buy the branded digestive biscuits. Or you can buy the own label digestive biscuits on the own label. Digestive biscuits are standing out because they're cheaper, so that differentiation is saying, Look, don't go and spend your money on this expensive packet of biscuits we offer you the same quality of biscuit are biscuits are justice nice? But because we haven't had to spend a whole load of money or marketing and advertising, we can sell you our own label biscuits much, much cheaper. So why don't you buy those? So that's price differentiation. Non price differentiation is basically when you are arguing that your product is in some way better due to a feature, it might be its form, its shape, its function, color, customization, durability, quality. Seven. Whatever happens to me, there's something unique about your product Now, if you think about the Apple iPhone that stands out, why does it stand out? Well, apart from the quality differentiates it, the apple brand differentiates it. The functionality with I mean, I just got on an Apple iPhone 11 pro Max, which is the best friend I've ever had by a country mile, and its functionality is absolutely amazing. The quality off the software differentiates it. So you have all these factors which make it stand out from the crowd, which is why I was prepared to pay a premium for it. Types of differentiation can be vertical or horizontal. You can differentiate on quality so you can have a lower quality product at a higher quality product, and you may deliberately want to remove features and have a basic product in the market on make it more affordable to more people. But then, if people want to get the higher feature, the higher quality products they pay a premium, and you can differentiate your products in the marketplace that way, so use a basic better and best horizontally again. You can differentiate with them, you know we're back to features color shapes, packaging flavors, whatever it happens to be. So you have vertical and horizontal differentiation. The advantages of differentiation apart from the fact that fundamentally your business should be able to compete with other businesses, get greater sales, raise margins is at the core off why you want to differentiate your product. You can achieve a higher babe price point with a higher, high, highly differentiated product, which, of course, then goes back into your higher margins and more sales. And, of course, you can build your brand loyalty around highly differentiated but differentiated products, which is exactly what Apple did when they came out with their first products early in the history of the company, they differentiated themselves in the market. Steve Jobs didn't amazing selling job, making apple different everything else, and that's what made them stand out. So product differentiation is critical to your business. It is critical to your marketing on it's something you really need to understand and think about how you're going to bring it into your business strategy and therefore how you're going to implement it in your business plan. 9. Product Diversification in Business Strategy: Now I'd like to talk to you about product diversification as part of your business strategy . The whole idea between behind product diversification is that it is designed to increase your sales and profits, and you do this by adding additional products and services that your company can sell. When you look at the and soft product market matrix, you'll see that it's one of the four main growth strategies that and soft puts forward in his model at a business level. What we're talking about is moving into a new market segment, but similar to that where the company's already operating so that it can sell related products and services to its existing customers. At a corporate level, it's moving into market segments beyond the current scope off the business operations. To expand this point, there are basically three types off product diversification that you can actually execute. The first is concentric, where you're adding similar products and services and you're selling them in similar markets and to or existing customers. Horizontal is adding new and unrelated products and services, but you're still selling them to your existing customers. So you are finding mawr things to sell to your existing customer base conglomerate is where you're adding totally new, unrelated products services, and you're selling them in new markets and to new customers, so you can see there are different risk elements associated with that on the obviously, the further you go down that particular hierarchy, the riskier it gets. So in conglomerate, you're going into completely new products and services in completely new markets and completely new customers. So that's obviously why is risky? What are the different? The advantages off diversification? And if you're considering, this is a business strategy than this is what you need to pay attention to. First of all, obviously, it's the all the eggs in one basket issue that if there is an industry downturn, you've got more than one set of customers to sell to, and you've got a larger range of products and services. Obviously, it gives you more options for your products and services. So the more you diversify, the more potential you have for further further diversification. Because it almost becomes like a branching tree structure. It can be a defensive move where you're in an area where your products and services are suffering a lot of competition and you can help to defend from that by moving out on doing other, executing other and selling other products and services, perhaps your existing customers, perhaps, to new products and markets. So if you're getting killed in one particular market, you can move out of that market and move elsewhere. And if you have a cash cow and it's in a slowing market than the cash thrown off by that particular business unit can be invested into new opportunities, so that becomes diversification. The risks are clearly that your entering in all cases, either new products and services, new markets and new customers obviously them or of those in combination that you have, the higher the risk. But I guess business isn't without risk, so I wouldn't dismiss diversification. But bear in mind that the MAWR new elements to add to your diversification strategy, the riskier it will become. Now, when you're evaluating whether or not you should move in a particular direction with your diversification strategies that were no actually debating now whether you should diversify were actually discussing what you might look to diversify into. So there are three tests that you can apply. The first is the attractiveness test and look at Porter's five Forces model to evaluate the attractiveness of an industry. So you're looking at the competitive rivalries, the power of buyers, the power of suppliers, the power off new entrance. Andi, the, um, what's the last barriers to entry? So you've got those five forces, and you need to evaluate that particulars to quite carefully the cost of entry, which is the barriers to entry. But the cost of entry into a market needs to be carefully evaluated, because if you're gonna have to spend so much money that you're never getting it back, so you effectively or capitalizing on your future profits, then it's not worth moving into that industry. And finally, on the better off test, which is basically arguing that the new unit must gain some competitive advantage from the firm itself that will help it to differentiate itself in the new product on market. So it was apple going into an apple car. You've got the apple brand right behind it, so that would give it a competitive advantage. But if you didn't have that, if you're a white label manufacturer and you just decided to go from computers to cars. You wouldn't have that same competitive advantage. So the better off test considers this and helps you to make decisions about whether or not that's the right industry or product or service to diversify into. So that's product diversification. It's an important strategy. When you're looking at your products and services and you're evaluating your business strategy, it's certainly something to consider. 10. How Does Quality Management Fit In Your Strategy?: now I want to challenge you. How does quality management fit in your strategy? Quality management is a key part of any business strategy, and it involves overseeing the operations of a firm to ensure that quality is high and consistent. There are four stages to quality management, first of all, planning where you identify the standards and how to meet them. Secondarily, you have improvement adapting processes to improve quality. Then you look at control how you're going to continuously monitor what you're doing to ensure quality and finally, assurance, ensuring that processes continue to deliver quality. Quality management involves all the stakeholders in the business from the investors all the way down to the lowest man on the shop floor. It involves its all encompassing. It's holistic involves all the firm's products, services, processes and culture to ensure that quality is delivered and the ultimate measure off quality management is customer satisfaction. Quality management comprises three components. You're looking at product improvement. You're looking at process improvement, but you're also looking at human capital improvement and you have to address all three. Now I'm not going to go into the details of these models. We will be touching on some of them in other parts of the course. But these are the models, and techniques where quality management can be can be applied on where you can take the lessons from these models to improve your own strategy and improve your own quality management inside your firm. So the things you should be looking at our kaizen zero defect methods six Sigma quality circles, Taguchi methods the Toyota production system cans I engineering. It goes on a TR I said B p r q o q. R M i S o and then top down and bottom up methods on. We will be touching on some of these in some more detail and other parts off this course. The key principles of quality management are it has to have a very strong customer focus. You need to have a very strong and firm dedicated leadership within the organization to ensure that quality management is pursued as a strategy. It requires the engagement of all the people in the firm. To make it work, you need to have a process approach to ensure that once you identify what you need to do, you implement processes to make sure it happens, it has to be continuous. It's not something you can do at the beginning of the year and then forget about. It's a continuous improvement cycle. It needs to be based on evidence based decision making, so you need to analyze what you're doing. Learn from it on, then make take lessons from that on the basis of the evidence inside the firm. And you need to have very strong relationship management skills, both with your supplies on. With your retailers going out to your customers. The benefits of quality management probably almost speak for themselves. But let me go through some of them. Clearly, you get great consistency in your products and services, which is a good thing. You improve the efficiency inside the firm and you reduce waste particularly important with this, the whole environmental and climate thing that's going on at the moment you improve customer satisfaction, which, of course, is the ultimate measure off high quality. You improve your marketing effect effectiveness. You can improve the integration of new employees because you have all these systems in place makes it much easier for them to come in and join the firm, and you end up with a system on a home organization which can continuously improve its products, processes and systems. So quality management is something that you cannot afford to ignore. And it needs to be almost baked in your business strategy from top to bottom, which is why I've raised it at this point in the course. 11. What do we mean by Competitive Advantage?: What do we mean by competitive advantage? This is one of the issues which is absolutely at the core off business strategy on. Therefore, it's worth spending a little bit of time on it, just focusing on it, particularly while we're thinking about products and services. In its essence, it's an advantage that allows the firm to out compete its rivals. But critically, it must be difficult for those rivals to duplicate. Let's look at some examples access to raw materials. Clearly, if you've got access to raw material that your competitors don't and it's vital to the product and services, you're off to a winner. The obvious example, or one of the obvious examples is De Beers and their access to South African diamond mines . Access to highly skilled labor can be critical. If you think about the conglomeration, all the focus off technology skills in Silicon Valley, then getting access to those skills can be absolutely critical. This is often why you see the big firms like Facebook and Google making acquisitions of smaller companies there. No, actually, that interested in the product. What they're buying is the highly skilled engineering teams within them. Unique geographic location can be really important. If you think about the Port of Liverpool in the 19th century, it was at a huge advantage. Why? Because it was the most convenient port on the western coast of the British Isles to give access to the U. S. Markets. So if you were trying to supply the Port of London, then you'd have to sail past Round Island, go through the channel and come up through the tide way, which was a much longer route. And once the railways were in that railway network was established in the UK then port goods could be landed at the port, a live report on then transshipped across country very quickly with the railways, so that gave it a tremendous advantage. Geographically, access to new or proprietary technology can be critical if you think about Google and it's AdSense product that that technology enabled it to dominate advertising. You know, in the last 20 years, particularly online, and it's that technology which is the U. S. P. And of course, with search algorithm being involved all the time, they are continuing to press ahead, make it more sophisticated and continue to build in resilience to that competitive advantage ability to manufacture at the lowest cost possible. Well, the obvious example that is China, that is, the go to low cost manufacturer. What will happen after the Corona virus thing? Who knows? But that has bean its USP for quite a long time on, of course, finally, brand image recognition, and we keep on coming back to Apple. That's the obvious example of the global brand with huge recognition. But equally you could say the same of Coca Cola, which allows Coke to differentiate itself and give it a real competitive advantage over its competitors, even competitive, like Pepsi. So to establish a competitive advantage, you know, need to know a few critical things. Firstly, you need to know what benefits your products and services offer to your customers. Secondly, you need to really understand your target market. You need to understand who your customers are, and thirdly, you need to understand your competitors and your competitive landscape on the whole point about that is, you need to understand what the advantages that your competitors are trying to create that are trying to out compete with you. And once you have that information, you can start to define your own competitive advantage for your target market, which is not offered by your competitive. You see how that matrix comes together. So there are three essentially three strategies. First of all, is cost leadership. Essentially, you're the lowest cost producer. Another example. This is the Japanese motorcycle industry in the 19 sixties and seventies secondary. The second strategy is differentiation. This is producing high quality products or services or innovating with products and services. And if you think about the Apple in the 19 eighties, when the early Apple Macs came out and how different and innovative they were, it was very exciting. And equally then, when Steve Jobs comes back to Apple after being sacked by the the chairman in the early nineties, then Steve Jobs comes back and he reestablishes thes, highly innovative, high quality, differentiated products on that becomes the foundation off. The rise and dominance rise to preeminence, as is now off the apple and apple brand. And then thirdly, you have focus, and you can have two types of focus. You can have cost focus, which is being the lowest cost producer, but focusing on a narrow segment on example. There is regional low cost airlines. They're not competing with the long haul carriers there, just focusing on the very short haul routes. And then, secondly, differentiation. Focus where you have a highly differentiated product, but also in a narrow segment on the example that would be the luxury brands like Louis Vuitton Chanel, where they have a very, very high quality, very high price, highly differentiated products, but only focused on a base more part of the market. So that is the essence off competitive advantage. If you're looking at your product portfolio in your business, you really need to question yourself on ask what is the competitive advantage that your products or services or products and services are offering, and you really need toe come up with something that's unique. That your other competitors can't offer that's got high barriers to entry, is very difficult to duplicate, and it's gonna offer riel value to your customers. 12. Bowman’s Strategic Clock and Strategic Positioning: While we're talking about competitive advantage, I thought it be useful to show you. Bowman Strategic Clock, which really focuses in on strategic positioning on, expands the competitive advantage of strategies from 3 to 8. So this is really taking competitive advantage. A step further on, Bowman has created a clock, literally a dial with eight different positions on it on it shows you different strategic positioning options. And I think it's a very useful model to make you think quite hard about some of the good options and some of the not say good options. And basically it has two axes price on perceived value, which is similar to low cost and differentiation. You can see the parallels there, I'm sure. So this is what it looks like and you can see the number one is at approximately seven o'clock, and then it goes around clockwise and number one is low price, low value added, so you can see it's in this of Lolo segment of the off the Matrix, and if you think about it, this is a four by two by two matrix. But you've got intermediate positions between the two blocks of the matrix, so number two is between the the bottom segment. On the top segment, which is low price number three is hybrid. Number four is differentiation. Five is focused. Differentiation sits. Six is risky, high margins seven is monopoly pricing and ate his loss of market share. And we're gonna take a slightly more detailed look at each of these to understand what is a good strategy on what is a not so good strategy. So if we start with Number one, which is low price and low value added, this is basically bargain basement selling on its a week strategy. Because all it really depends on is nobody being ableto undercut you. There's little or no product differentiation and the example that comes to mind mind our pound stores, where they're basically selling low pay, low margin products, dirt cheap on their simple differentiators. The fact that there is cheapest chips on that is a weeks trashy. It's sustainable. You won't make a huge amount of money except if you do very high volumes. But it's only sustainable if you can't be undercut. Secondly, is low price now. This is the equivalent to the low cost leadership in the competitive advantage model Essentially, it's cost minimum night minimization reliant on economies of scale. So you're during high volumes, making low profit margins but high profits If you do the volumes. These markets are typically characterized by intense competition. Often you see a lot of price wars the supermarket, the big supermarket models in the U. K. Where you've got Tesco Sainsbury's to a lesser extent, Waitrose, certainly as is in there. They're competing on cost minimization at low profit margins are high volumes, but then income. Little and LD from the continent to private German supermarket chains where they're going even lower. Cost on. They can't do this because they have a much lower, smaller product range. I think the big supermarkets, Tesco's will have 30,000 plus different products, but little and how do you have 1/10 that have about 3000? So you can see how low cost leadership can be a two edged sword on. There are strategies to come in and on beat even the low cost leaders. You seem to have all the economies of scale. Number three is hybrid, where you have a combination of low price. But you also have some differentiation s so In a sense, it's the best of both worlds for the customers, because you're giving them a very good price of the product. But you're also offering them a differentiated product. And the thing the example that comes to mind to me is a hotel chain in the UK called Premier Inn, where they tell you how comfortable their beds are. And they stress a good night's sleep on the nice breakfast. But at the same time, they're really low cost product, so it does work for premier in They have a successful marketing program where they're stressing their low cost but also the quality off their rooms and their beds on their breakfast. So number four is differentiation on. This is where you are, stressing the highest customer spirit perceived customer value. So you're offering a highly differentiated product. You're lying on strong branding, and because of that, you can charge high prices. And of course, Apple is a very good example. Off that strategy, Number five is focused differentiation, and this is where you are still going for a very focused product or going for very high price levels. But you're going for a very narrow market segment and this is again. This is the focus differentiation strategy you see in a competitive advantage. The example. Luxury brands leave attention Al Amani, where they have only the very best quality products at the very highest prices. But they're only really appealing to the luxury end of the market. People with plenty of disposable income in distrust. E six. We have risky high margins, which is the first off the worst strategies, if you like doomed to fail. Question mark. These are high prices, but without any perceived value added on actually was struggling to think off a a new example of this because it is such a disastrous strategy because your pictures basically saying I'm not really adding any perceived value, but I'm still gonna put a high price on it and see if there a few foolish people out there who prepared to pay the price. Not really what I would call a competitive advantage. Monopoly pricing is number seven. This is essentially where one business offers the product with no concern for the customer on Duin. No worry about the competition because there isn't any Andi. Often you find this is why monopolies where they naturally exist are highly regulated to stop them taking advantage of this. But if you think about nationalized industries who fundamentally have no competitive pressure and completely well, do whatever they want and don't really tend to spend much time worrying about their customers things like, you know, the British car industry in the seventies, things like British. The railway system in the UK before it was nationalised in privatised, so a privatised, not nationalised after privatisation, it got a lot better British Telecom before it was privatised, even to a certain extent, you know, b O, A. C and British Airways before they were privatised. So there is a an inherent complacency in these organizations. They tend to become very bureaucratic. They tend to become very inwardly focused on. They tend to not really care too much about the customers and frankly, in many cases, definitely make much difference whether they make money or not, particularly, they're run by the government, so monopoly pricing can be a riel riel strategy and people you do find it. But again, it's not really a sustainable strategy, and finally, what is called loss of market share? This is basically a mid price product with low value added. So it's a sort of a damp squid. And again, it's very hard to argue that there's any sense in trying to adopt this strategy whatsoever because it's again another one, which is a recipe for disaster. So those are the eight strategies. As you can see, 67 and eight are uncompetitive, where basically that price is greater than the perceived value. But the Bowmans clock does give you those eight strategies because basically, he's taken the four strategies the one the one and the to the for forced. The four options, if you like from the competitive advantage on expanded them to eight, and it gives you more to think about, particularly a bit more granularity, a bit more detail and helps you to think about strategic positioning and competitive advantage. So I hope you found this model useful. It's not what I would call one of the mainstream models, but certainly when you're focusing down on things like competitive Advantage or any other topic, it's always helpful to delve a little bit deeper on see what you can come up with, particularly if it helps of clarity off more strategic thinking 13. Products, Services and Technology in the Business Plan: I want to tie in your products and services Strategic analysis Now to the business plan headings they are provided at the end in the appendix as well as at the beginning of this course. The products and services section is clearly a critical section in any business plan on it's important that you go through it very carefully. Equally. It provides you with a great opportunity for reviewing the business and taking a strategic view. So I've got the We've been discussing the various aspects off business strategy as far as the products and services concerned. Now, the in the appendix to this slide deck, you've got the different business plan headings for this section products services. Now one of the things that, um you will find is that there is a certain amount of repetition and other points will be dealt with in other parts off the course. But don't worry about that. That is just the nature of it. So I want you to use thes sections to think about the strategic position, the company So you're adding extra depth to your strategic analysis on, I want you to think about it. Using the SWAT analysis, the strengths, weaknesses, opportunities and threats off these various headings from this. Ask yourself. So what? So you identify strength or weakness? So what in key parts together? So what? And see what conclusions come out of that that questioning on. Then you can start to draft recommendations against those conclusions, and I'll be using that methodology throughout this course. So I'm going to go through the whole of this business plan section. As I said, there are overlaps with other parts off the strategy strategic analysis. But that is just part and parcel of the fact that I'm trying to dovetail too Complex sets off data here. The strategic analysis is with the business plan. So this is not repetition, but its reinforcement off the different points on the complexity of the analysis were attempting to put together. So let's start obviously with products, and the first question is what need does this product or your products portfolio address? What is their value added to the customer? So the need is the pain or problem that that the products is solving on the value added is the way that you solve it on the the way that will you will motivate the customer to give you money because it's our value to him. You'll need to summarise the technology and patients behind all this. And one of the key issues here is Do you have any defendable intellectual property which will create a barrier to entry? So you see, now we're looking at Porter's five forces. You'll need to summarise the businesses service offerings if if it's applicable. We've looked at public products, and obviously Nicholas services separately. What is the company's business? Model said The key question is, How does it make its money? Is it a manufacturer is reseller is an affiliate. You know, there's different business models there discussed and other parts in the course you'll need to make clear what the business model is. Andi then tied into that explain the unique selling propositions unique selling points off the company's products and services, and that is all about product differentiation and how the company differentiates his products in the market. And we've discussed that in this section you'll need to set out the strategy and objectives . So we're talking about the core strategy of the business. So here we're now looking, if you like at the whole off the issues being discussed in this business strategy course, But you're gonna have to narrow it down to a core business strategy and explain what that is on. Then tied into that, you're gonna have to go through your strategy for sales and marketing. Explain the I T systems in the company. Explain on Set out the Value Chain who your customers are and who your competition are on again. We will address these indifferent strategic sections off the business plan as we go through , so you can see it's like a two dimensional matrix theme business plan. Down this way, you've got the the strategic analysis this way on. You've got overlaps dotting everywhere, but it's important that you keep the two sets of data separate in your mind and then understand how you could relate them to each other going on. Then you'll need to explain that your growth expectations to the business and here we're talking really about other, amongst other things, product diversification. So, you know, are you going from market? The extension market expansion, geographic extension exude graphic expansion? Or are you doing this with your customers? So there's a Siris of strategies to be thought off here on product investigation, which we discussed earlier, is one of these you'll need to highlight and explain any investment in research and development any future products. You have a road map for that. What new technology you might be using any new tape, patents and copyrights that are coming down the road on. Then you'll need to go it and explained the manufacturing operations, and we'll be looking at those in the internal analysis off the business you'll need to cover your fixed assets will be looking at those in the financial statements, your production capacity, your supply or suppliers. Sorry, suppliers, seasonality, your software partners, channel partners, the sectors you operate in and the premise premises you have. So again, you've got a number off key aspects to the business or relating to products and services. But at the same time, they will crop up in other parts off this whole strategic plan on this whole strategic planning course. So those are the products, services and technology in the business plan. You'll find the detail in the appendix. Andi, I hope you're beginning to see how you can into relate the strategic analysis you're doing with the business plan. You'll need to produce 14. Part 2 Leadership, Products and Services Coming Up Next…: well, well done for getting through Part two off this course. I want to give you a quick summary, and then I'm going to give you a heads up on what's coming up in Part three. So I really hope you enjoy this. I hope you got a lot out of it, and I really hope you enjoyed doing the assignment on writing that part of your business plan. We looked at the critical evaluation off leadership, making you think about the role of management and their skills and particularly looking at vision on making sure that the management's vision was coming through into the strategy and into the plan. We've looked at products and services, and competitive advantage is typical to say, competitive advantage. But competitive advantage is something that's critical toe any good business strategy and to any business, and it's really important that you understand it. So now in Part three, we're going to move on to competition, know your enemy, which is a quote from Sun Zu, The Art of War and this section is dedicated. Understanding the competition that the firm is facing in the marketplace on, we're going to look at some classic business class models to evaluate this. We're also going to take it a step further, and we're gonna place that competition in the context off industry and markets so that you get a much broader view off what competition really is all about because it's not just another single firm competed against. You were going to look at the competitive conditions in the whole of the external marketplace on bring the whole competition element into the context of industry as well. So I'm sure you're gonna find that really interesting and really stimulating. So enjoy the project in this part of the course, and I look forward very much seeing you in part three. So this is being part two. We'll be looking at leadership products and services, and I hope you're now really getting into the course, and you're really getting enthusiastic and looking forward to taking Part three