Market oriented strategy 2010, Lesson 5 Elmer Fly Steensen

Market oriented strategy: Lesson 5

Business level strategy - inherent logic:

Baden-Fuller & Stopford: The crescendo model of
rejuvenation
Eisenhardt & Sull: Strategy as simple rules

Case: ECCO (I)

Market oriented strategy 2010, Lesson 5 Elmer Fly Steensen

Business level strategy—inherent logic

Baden-Fuller & Stopford: The crescendo model

of rejuvenation

•  How is a business, paralyzed by years of turmoil and

management failures, turned into a vibrant organization
committed to entrepreneurship?

•  While there are many routes a crisis-ridden business may

follow there is one path, which is more certain than many
others…
It is a four-stage renewal process, an orchestrated
crescendo:
Market oriented strategy 2010, Lesson 5 Elmer Fly Steensen

Business level strategy—inherent logic

1. Galvanize
New management team understanding all stakeholders and
understanding problems are complex and cross-functional.
Create a sense of urgency and need for fundamental change

2. Simplify
Divest, outsource or close activities. Concentrate on core.
Remove outdated systems.
Improve results is critical!
Market oriented strategy 2010, Lesson 5 Elmer Fly Steensen

Business level strategy—inherent logic

3. Build
Develop new capabilities, define new visions, increase
experimentation, learning and teamwork, then invest

4. Leverage
Maintain momentum. Complexity may be increased
Market oriented strategy 2010, Lesson 5 Elmer Fly Steensen

Business level strategy—inherent logic

Eisenhardt & Sull: Strategy as simple rules

•  When business environments are simple, companies can make

complex strategies, but when the business environments turn
complex, strategies need to be simple

•  Smart companies in dynamic businesses have done just that by

defining a few hard-and-fast rules that define direction

•  These companies have achieved global success despite small

initial resources by following a strategy of…
•  Jumping into the confusing and pursuing emerging opportunities
•  Keep moving rapidly and flexibly as conditions change
•  Pursuing growth
Market oriented strategy 2010, Lesson 5 Elmer Fly Steensen

Business level strategy—inherent logic

•  Simple rules helps these companies to keep focus in chaotic

businesses by filtering out the opportunities not to pursue

•  There are 5 types of simple rules:

1.  How-to
2.  Boundary
3.  Priority
4.  Timing
5.  Exit
Market oriented strategy 2010, Lesson 5 Elmer Fly Steensen

Business level strategy—inherent logic

•  Simple rules do not develop from deliberate

considerations but over time by experience and failures

•  Simple rules (normally between 2 and 7) should not be

too broad, vague, mindless or stale