1.
Rigorous Strategic Thinking;
Avoiding ‘Knee Jerk’ Reactions
Delivered By: James Graham

2.
Housekeeping
• Slides will be available on our SlideShare
page, link will be emailed to you
• Recording of the webinar will be available
to download, link will be emailed
• Take the time to complete post-webinar
survey that will pop up at the end
• You can type your questions throughout
the session
• Time will be allocated in the end for the
speaker to address your questions

3.
Speaker Introduction
3
12 years management in
multinational companies
Consulting since 1993
Global Experience
Change Specialist
12 years senior management
in multinational companies
Consulting since 1993
Global Experience
Specialises in Strategy
Formulation and Execution

4.
Agenda
Background and context – the risk of ‘knee jerk’ reactions and incorrect responses
Observing market related events
Collating groups of related events
Interpreting what is happening
Deciding how to respond
Identifying provisional responses
Assessing the best fit response
Progressive elaboration of the solution
Implementing the solution
Q&A
4

5.
The Risk of Knee Jerk Reaction
“A ​quick ​reaction that
does not ​allow you ​time
to ​consider
something ​carefully”
Cambridge Advanced Learner’s Dictionary & Thesaurus
In the mid 1990s, the business landscape was radically altered
by two magical syllables – “dot com”. A five-year boom of wild
speculation ensued, followed by a devastating bust in which five
trillion dollars of tech company market value evaporated.
http://www.computerhistory.org/revolution/the-web/20/394

6.
Background & Context
Boo.com formed 1998
Opened 1999
Closed 2000
Investment $130,000,000
Most users connected with dial up
modems

7.
Why Did Boo.com Fail?
First mover advantage overstated
Aggressive expansion plans (UK/US concurrent launches – Amazon.com opened in US
only)
Very high operating expenses
Conversion rate of visits to sales low (1-3%)
Slow page loads may have reduced sales
Revenues well under plan
Ran out of cash

8.
Knee Jerk – Overestimating First
Mover Advantage
“First-mover status can
confer advantages, but it
does not do so
categorically. Much
depends on the
circumstances.”1
1Fernando Suarez and Gianvito Lanzolla, Harvard Business Review, April 2005. https://hbr.org/2005/04/the-half-truth-of-first-
mover-advantage

9.
Avoiding Knee Jerk Reactions
Observation Execution
Intuitive
Reaction
Collate Observed
Events
Interpret
Implication
Decide How to
Respond
Identify Provisional
Responses
Assess Best Fit
Response
Progressively
Elaborate the
Solution

10.
Always Know Your Situation (5Cs)
Context
• The firm
• The
product/service
offering
• The markets
Constraints
• Firm internal
strengths and
weaknesses
• Value chain
• Financing
• PESTLIED1
factors
Consider-
ations
• What are the
problems/
opportunities?
• What action is
required?
• Objectives?
Challenges
• Competitor
strategies
• Market(s)
velocity
• Implementation
costs
• Changes
required
Choices
• Generic strategy
• Red or blue
ocean gambit
• Market position
• Benefits/risks
1 Political, Economic, Social, Technological, Legal, Environmental, International, Demographics

11.
Observing Market Related Events
Note the type of event e.g.
• Competitor gives larger than normal
discount
• Competitor launches new product
• Customer switches due to unresolved
complaint
• Complaints rise 25% above average for
three months

12.
Interpreting What is Happening
There seem to
be two different
themes
• Competitor
aggression
• Customer service
(complaints)

13.
Deciding How to Respond
• Promotional campaign?
• Maintain margins?
• Launch new products?
Competitor Attack
• Introduce Six Sigma® projects?
• Compensate customers?
• Advertising campaign?
Customer Service

14.
Identifying Provisional Responses
Initial thoughts on
responses
• What options are available?
• What is known about each
option?
• How much would it cost?
• How long would it take?
• Is it a ‘quick fix’ or a permanent
solution?
• Have we got the skills to do it?
• Have we got the people,
resources and materiel to do it?

15.
Assessing Best Fit Response
Analyse each
potential option
• What are the benefits?
• What are the risks?
• How will the competitor’s
respond?
• Are the options affordable?
• Are the options feasible?
• Are the options available in the
time needed?

16.
Progressive Elaboration of the
Solution
Take the best fit response
Plan implementation
• Define product/service is needed?
• Plan the scope of work
• Create a timeline
• Produce a budget
• Publish a risk management plan

17.
Implementing the Solution
Appoint sponsors
• Senior level
• Business unit/division level
Plan the changes required
Analyse impact on the business
Plan changes
Plan communications
Monitor progress, correct as required

18.
Footnote - some Dot.com Successes
Amazon.com
Netflix.com
eBay.com
Coupons.com
Priceline.com
Shutterfly.com

19.
Any Questions?

20.
Future Events with James Graham
Dates Seminar Location
8-11 November Certificate in Strategic
Thinking and Planning
Jumeirah Emirates
Tower, Dubai
24-27 July 2016 Analysing and
Documenting Policies
And Procedures
Dubai

21.
Thank You!