What Strategic Choices Do We Have?

What Strategic Choices Do We Have?

Note: Updated Oct 2023.

Strategy has two core dimensions that were regarded as the market-product duopoly, from which emerged the product-market fit concept, first coined by Andy Rachlef. I prefer for these dimensions the terms: Problems-to-Solve and Solutions-to-Deliver.

Others call them where-to-play and how-to-win, although the 'playing to win' paradigm only applies to the business sector, it does not apply to the public sector (municipalities, governmental agencies, NGOs, public institutions, public schools and hospitals, etc.), where there is only one potential winner: the citizen

The Penta Model for Jobs-to-Be-Done

One model that helps us identify the distinctive Strategic Choices available to us concerning the Market Boundaries (problems-to-solve) and Competitive Factors (solutions-to-deliver) dimensions, is the Penta Model, presented below in its latest version, which is adapted to the Job-to-Be-Done concept.

For more information on the Jobs-to-Be-Done concept, read Prof. Clayton Christensen's latest book Competing Against Luck (Harper Collins, 2016). For more information on the relationship between the Jobs-to-be-Done and the Penta Model, read this: Linking Jobs-to-Be-Done to Strategy.

Since the Penta Model has been built on research and breakthrough concepts provided to us by many Strategy thought leaders, you can find more examples than those provided here, related to one Strategic Choice or another (or to several of them), in one or more of the following reference books:

Furthermore, the Penta Model was built for extending Prof. Arnold C. Hax's Delta Model, aiming to cover all the relevant Strategic Choices models, including the BOS, the RBV or the Disruptive Innovation, and complement the how-to-win positioning dimension model with the modeling of the where-to-play dimension. Here is Penta Model's starting point: Prof. Hax's 2010 Delta Model (source: The Delta Model, Arnoldo C. Hax, Springer, pg.7)

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Important observation: Any of the Strategic Choices pair (where-to-play and how-to-win) may support a viable Value Proposition, with the exception of some combinations that are toxic (e.g. Market Edges - Top Market and Lowest Cost).

Penta Model Alpha (where-to-play)

In the Penta Model Alpha, we have 5 distinctive Strategic Positions (the corners) and 10 distinctive Strategic Choices categories that represent Market Boundaries alternatives that can be used for building our Value Proposition (and focusing our Strategy), along the where-to-play dimension.

The A1 ... E2 are the where-to-play Strategic Choices categories, adapted for the Job-to-Be-Done concept. They represent a portfolio of choices from which we can select those that will allow us to target the Jobs that our potential customers need to do.

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If we would be talking about customers and products or services, instead of customers' Jobs-to-Be-Done and ways-of-Doing them, we could overlay the Ansoff matrix quadrants over the Strategic Choices in the model. Although we are overlaying different concepts, this may help us to better understand the model.

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If we would be again talking about customers and products or services, instead of customers' Jobs-to-Be-Done and ways-of-Doing them, we could also overlay the Adjacent Moves (described by Chris Zook in Beyond the Core) over the Strategic Choices in the Penta Model Alpha. We are overlaying different concepts, as well, but this may also help us to better understand the model.

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If we would be talking once more about customers and products or services, instead of customers' Jobs-to-Be-Done and ways-of-Doing them, we could overlay even the Six Path framework (described by W. Chan Kim and Renée Mauborgne in The Blue Ocean Strategy) over the Strategic Choices in the model (except for New Geography Jobs, for understandable reasons). Once more, we are overlaying different concepts, but this may again help us to better understand the model.

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Finally, we can move even one step further and define the Penta Model Alpha choices categories around the customer needs types and the Jobs-to-Be-Done (JTBD) paradigm, and around the Zones-to-Win framework. The result would look like this:

Penta Model Alpha - Zones-to-Win

The Strategic Choices for where-to-play

Now, let us dive into this Penta Model's Strategic Choices categories and better understand why does it have five corners instead of three, as in the Delta Model. However, we will start with the Penta Model Alpha, which defines our main Where-to-Play choices, something that the Delta Model never did (it was limited to only How-to-Win choices).

A. Strategic Positioning for Segmented Jobs

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? The Strategic Choices A1 - Mid-Market jobs focus our Strategy on the distinctive customer Jobs categories for which our products or services may be highly-specific ways of Doing.

If we would be referring to customers, instead of customers' Jobs-to-Be-Done, we would identify an equivalent of these choices with the traditional Marketing STP (Segmenting, Targeting, Positioning), but the equivalence is strictly informative.

The Jobs market segmentation is performed based on the aspirations of customers in certain situations characterized by specificity, specialization or proficiency, that require customized ways of doing them, or when facing the constraints of circumstances that require compliance with regulations or with mandatory safety or security requirements.

Take a look back at the Airbnb example. What customer Jobs segments (and what Jobs reasons) are they targeting? The Jobs of travelers looking for interesting journey destinations and/or convenient & home-like accommodations, as well as those of hosts looking for guests for their spare property space. Does Airbnb target any of the specific customer demographic, professional or geographic segments of the market? Not at all. They target highly-specific Jobs segments of any customers, part of any demographic, professional or geographic market segment.

Customer Jobs segmentation: Virgin Holidays

Take a look at the customer Jobs segmentation used by Virgin Holidays. What do you think, do they target segments of customer demographics, or segments of Jobs that their customers intend to do? Even for the families (a typical demographic), the Value Propositions and the where-to-play Strategic Choices are targeting a variety of customer needs and desires.

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One more perspective on doing JTBD segmentation, instead of segmentation performed based on customer attributes (age, location, profession, etc.). Tony Ulwick, who brought the Jobs-to-Be-Done concept to the attention of Clayton Christensen, around the year 2000, has a nice framework for doing that: Outcome-Based Segmentation, which says that we should not segment our customers based on who or how they are (customer attributes). Instead, we should segment them based on the jobs that they have to do, on the outcome they want to achieve. We should segment them based on their Jobs-to-Be-Done. So, we can then target not the customer X, Y, Z, but the jobs A, B, C that certain customers are trying to get done. Ulwick has even created a nice 8-step tool for identifying our customers' Jobs-to-Be-Done: the JTBD Market Definition Canvas.

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Find out more about this tool in this article, authored by Tony Ulwick: The JTBD Market Definition Canvas

? The Strategic Choices A2 - Market Edges jobs focus our Strategy on the distinctive and special customers Jobs categories that are driven by comfort reasons related either to belonging to an elite or special group, or to the need for luxury or vanity satisfaction. Traditionally, the customers with such Jobs are part of what is called High-end/Top market.

Since we are talking about market edges, we also have the other side of the market: the customers who need to address the dissatisfaction with high costs, high upfront costs or depreciation, or who have to deal with the constraints of their income limitations. Traditionally, this is called Long Tail market, or Low-end/Bottom market. To find out more, read Chris Anderson's book The Long Tail: Why the Future of Business is Selling Less to More (2006).

If we look into the airline industry, we find the High-end market by the First-Class of many airlines, whilst the Low-end market is represented by the budget offering of No-frills, or Low-cost airlines.

These two Jobs segments are set apart from those targeted by the A1 - Strategic Choices because they require very specific ways of Doing the Job. We won't get into more details here, but I bet that you can easily imagine the capabilities of offering extraordinary products or services and a pampering customer experience, on one hand, and of dealing with large volumes of lower-value products or services, provided to a great number of customers, on the other hand.

What do you think, which customer Jobs in the above example (Virgin Holidays) are targeted by their Value Propositions for Market Edges (luxury/delight: High-End market, or budget/income constraints: Long Tail market)? We can easily see that Virgin Holidays are using a mix of Strategic Choices, which is not limited to targeting Segmented Jobs, only. Look closer at the mosaic of their Value Propositions and you'll spot those targeting the Top-End market (Luxury, Platinum, Sandals & Beaches) as well as those targeting the Long Tail market (Group bookings, Self-catering, Family, Multi-destinations).

B. Strategic Positioning for Convenience Jobs

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? The Strategic Choices B1 - Time-sensitive jobs (or Customer Proximity) focus our Strategy on Jobs generated by the aspiration for more efficiency, speed or better availability, including the quick access to specific products or services (e.g. critical spare parts deliver, emergency services, search & rescue, etc.), but also for convenience tasks, related to physical or virtual proximity and the desire for more ubiquity of such tasks (e.g. meal ingredients purchased from the closest proximity grocery instead of the distant supermarket, click & mortar stores, restaurants with home delivery, etc.).

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Another area of Strategy focus, based on these choices, are the Jobs driven by customers' dissatisfaction with the current products or services, addressing the discomfort, misfit or time consumption of the ways to reach or use them (e.g. learning a new language, curing an illness, having an audit performed, etc.).

? The Strategic Choices B2 - Customer Proxy jobs (or Sales Channels) focus our Strategy on Jobs segments that require the convenience provided by the direct or highly-customized relationship between the customer and the product or service provider. We are talking about targeting specific stages in the sales/distribution chain that satisfies the comfort requirements of direct customer relationship (e.g. local agents, account managers, franchisees, distributors or supplier's own retail locations), or re-positioning and re-defining the customer. Don't be fooled by the narrow definition of what the way of Doing the Job means - it always includes the marketing, sales & support functions of the customer relationship.

On the other hand, these choices may address customers' aspiration to have their Jobs Done in a way that offers a high specialization level, as opposed to various generalist alternatives (e.g. buying a GPS car navigation system from a specialised automotive accessories shop, rather than from the non-food section of a supermarket).

Redefining the customer: McDonald's

With the new 2006 'Forever Young' design, the first major redesign in nearly 40 years, McDonald's has taken a big leap forward in redefined their customers. What did they do? The restaurants have been remodeled, featuring dining zones with 'distinct personalities'. A linger zone was designed to accommodate people who were inclined to dawdle and socialize while sitting comfortably on armchairs or sofas. Another zone offers counters and stools for customers in a hurry who might just grab a bite and go. A third zone is designed for families or groups, with seating arrangements that can be reconfigured for various needs, like birthday parties.

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Moreover, crisp colors and hard plastics have been replaced with earth tones and flexible pads covering the booth chairs. The McDonald's menu has been 'redesigned', as well, offering more of what is referred to as healthy food, including breakfasts without burgers, white meat and large fresh salads.

What happened at McDonald's and why? Following a significant drop in prestige and financial performance, during the late 1990s and early 2000's, McDonald's realized that something has gone wrong with their system. For many years their main focus was the growth of their restaurants network: during the late 1980s and early 1990s, the growth rate has been of up to 2,000 new restaurants opened every year. The franchisees (their customer proxies) took the biggest chunk of this expansion and, at some extent, they became the main 'customers' of McDonald's, being helped to get up and running as fast as possible and their employees even trained in off-site Burger Academies.

All this focus on fast network growth and on the franchisees has backfired, as the McDonald's restaurants became synonymous with low-quality locations, unhealthy eating and even cleanliness deficiency. McDonald's realized that they were focusing on the wrong customer and that they had to turn their Strategy to reinvent the customer experience and focus on the consumers, instead of the network of franchisees.

Who are your customers?

I remember asking the management team of a construction materials manufacturer (roofing materials, roof tiles, etc.): "Who are your customers?" The answer was: "The chains of construction materials stores [their customer proxies]. They are the ones who pay our invoices for the goods that we deliver to them!"

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The next question was: "But who are those who ultimately buy your products?" It turned out that they didn't even had a formal term for them ... "We may call them consumers, or end-customers, but we don't do any direct business with them!" It didn't took more than a year until they had to reconsider who their real customers are, mainly due to the pressure from their 'customers' to lower their prices. This is how they realized that they don't really know who the end-customers are, but also that they lack entirely the capabilities to build any kind of relationships with them.

What followed was a marketing, sales & customer support functions restructuring, followed by a massive campaign aimed at building a direct relationships with the end-customers whose highly-specific requirements for the Jobs-to-Be-Done was to repair or completely change the roofs of their homes. Their new Value Proposition included a {materials + services} Way-of-Doing the jobs, together with a selection of their former 'customers', who have been trained by the manufacturer to perform houses roofs maintenance & replacement services within exclusive local territories.

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C. Strategic Positioning for Integration Jobs

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? The Strategic Choices C1 - Value Chain jobs focus our Strategy on the Jobs segments generated by the aspiration to have a single supplier for all the parts of the Job that involve solution components from different stages of the value chain. The benefit of these choices is often linked to the responsibility for the entire Job fulfillment (e.g. having the car repaired with original parts by a repair shop in car's manufacturer's network, buying a software/hardware platform and the bespoke software development services, provided as an integrated package, by the same IT supplier, etc.).

The same choices can focus our Strategy on addressing the constraints of some Job segments that require an advanced trace-ability along the value chain (e.g. the vaccines or diabetes drugs that require a strict temperature trace-ability along the factory-store-transport-retail-patient cold chain, organic or Halal food that require the complete trace-ability along the production cycle, from the natural/specific origin along the entire food-chain, to the preparation process and retail distribution, etc.).

? The Strategic Choices C2 - Adjacent Jobs focus our Strategy on multiple Jobs of customers seeking the comfort of trust and familiarity of an existing relationship with a supplier that has adjacent business lines, offering more than one type of product category or services to the same customers (e.g. multiple utilities and/or communication services charged on a single bill, credit cards issued by our preferred grocery store, like Tesco or Sainsbury's, using the administrative and communication services, IT equipment rental or cafeteria/food-catering services, provided by the supplier from which we have rented our office space, etc.).

At the same time, these choices can focus our Strategy on Jobs caused by customers' dissatisfaction with too many separate suppliers for related needs (e.g. having a company registered by an integrated services provider, instead of dealing ourselves with various authorities or service providers, purchasing the air travel tickets together with the car rental and hotel reservation from the same travel agency, etc.).

D. Strategic Positioning for Alternative Jobs

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? The Strategic Choices D1 - Substitute Jobs focus our Strategy on the Jobs that are caused by the comfort need for a new, innovative, different product or service, often provided by new market entrants, replacing the current obsolete or too boring ones (e.g. typical cases for consumers of fashion, luxury, entertainment, high-tech, etc.).

The most popular Strategic Choices that target Substitute Jobs today are the likes of Uber (substitute for taxis) or Airbnb (substitute for hotels). But that's even more. Take a look at the Airbnb Experiences and at Virgin Holidays (or at any travel agency, for that matter). Isn't Airbnb targeting substitute Jobs-to-Be-Done of customers who normally use travel agencies for finding new city break experiences? So, Airbnb went beyond offering just booking for private residence accommodation, as a substitute for hotels, and are now offering 'Booking for new Experiences', as a substitute for travel agencies' city breaks.

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The same Substitute Jobs Strategic Choices choices address the Jobs driven by the dissatisfaction with the current products or services that are no longer effective or compatible with other products or services purchased later (e.g. moving into a new house and buying new, more flexible, more modern and modular furniture, instead of bringing the furniture from the previous home, moving from PC to Laptop and from Laptop to Tablet or Fablet, changing the on-premise servers with cloud solutions for business applications, etc.).

? The Strategic Choices D2 - New Geography Jobs focus our Strategy on new geographical markets (not necessarily international), driven by customer's aspiration for Jobs that should ideally be Done by suppliers with national or multi-geographies coverage for their nation-wide or international locations (e.g. suppliers follow their key customers that expand geographically), or by the constraint of performing supply-side functions that cannot be performed by local suppliers, or when they are performed at lower standards than the ones offered by suppliers that move in from outside the region or the country.

We can find hundreds of examples of suppliers expanding from developed markets (e.g. from Western Europe) into developing ones (e.g. Eastern Europe), offering products or services superior to those of local suppliers and sometimes, even more, accelerating such geographical expansion by acquiring local suppliers that own established infrastructures, customers portfolios or brand awareness.

E. Strategic Positioning for Emergent Jobs

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? The Strategic Choices E1 - Trend Market Jobs focus our Strategy on customers' Jobs that are based on the comfort provided by their fulfilled search for innovative and exciting new products or services, for modern or trendy functions and experiences, for which they are early adopters (e.g. web-based courses delivery, innovative use of drones, new fashion designs, innovative consumer electronics, hybrid/electric cars, etc.).

The same choices can focus our Strategy on customers' Jobs driven by their dissatisfaction with obsolete products or services they are currently using (e.g. old versions of software or operating systems, cars with high fuel consumption, legacy IT systems that no longer fit evolving business requirements or versions with discontinued support, old equipment that has maintenance problems due to spare parts no longer manufactured, etc.).

? The Strategic Choices E2 - New Market Jobs focus our Strategy on accomplishing Jobs that didn't exist before, desired by marginal customers or by non-consumers (those who don't buy neither from us, nor from our competitors), who aspire to have Jobs performed by products or services that don't currently exist in the marketplace, because they require new experiences never fulfilled before as they expect it. Take a look at the wealth of the Blue Ocean stories and you'll have plenty of examples of such new customer Jobs.

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At the same time, these choices can focus our Strategy on the Jobs that many customers didn't think to be within their reach, not long ago. But new technologies or methods made them available, so the constraints can now be bypassed. Take a look at the wealth of the Disruptive Innovation stories and you'll have plenty of examples of such new customer Jobs.

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Penta Model Beta (how-to-win)

In the Penta Model Beta, we have 5 distinctive Strategic Positions (the corners) and 10 distinctive Strategic Choices categories that represent Competitive Factors alternatives that can be used for building our Value Proposition (and focusing our Strategy), on the how-to-win dimension.

The F1 ... J2 are the how-to-win Strategic Choices categories, adapted for the Job-to-Be-Done concept. They represent a portfolio of choices from which we should select those that allow us to provide customers with the best possible ways of Doing the Jobs that they need to do.

Important observation: Any of the how-to-win Strategic Choices may support a viable Value Proposition. For instance, our Strategy may be focused on Customer Intimacy, supporting a Competitive Advantage that can beat, for specific customers, the advantages of our competitors with Value Propositions based on Cost/Price or Product Differentiation. However, the Value Propositions are based, most of the time, on a mix of multiple how-to-win Strategic Choices, leading to some more competitive Value Propositions that are preferred by more potential customers who share the same Jobs that needs to Be-Done.

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For a better understanding of these Strategic Choices categories, we can overlay the Delta Model Strategic Choices (described by Arnoldo C. Hax in The Delta Model), as well as the Generic Competitive Strategies (described by Michael Porter in Competitive Strategy) over the Strategic Choices in the Penta Model Beta.

Please note that Porter's Focus Generic Competitive Strategy is not a how-to-win Strategic Choice category (Competitive Factors), but a where-to-play one (Market Boundaries) that overlays the Segmented Jobs positioning.

The Penta Model Beta is extending the coverage of the Generic Competitive Strategies and of the Delta Model with additional Strategy Models, including the Resources-Based View of the Firm - RBV (as described by Edith Penrose in The Theory of the Growth of the Firm), the Capabilities-Driven Strategy (as described by Paul Leinwand and Cesare Mainardi in The Essential Advantage), the Disruptive Innovation Strategy (as described by Clayton Christensen in The Innovator's Dilemma) and the Blue Ocean Strategy (as described by W. Chan Kim and Renée Mauborgne in the Blue Ocean Strategy).

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Finally, we can move even one step further and define the Penta Model Beta choices categories around the solutions to Jobs-to-Be-Done (JTBD) paradigm, and around the Zones-to-Win framework. The result would look like this:

Penta Model Beta - Zones to Win

The Strategic Choices for how-to-win

F. Strategic Positioning for Best Product

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? The Strategic Choices F1 - Lowest Cost (or Price Leader) focus our Strategy on customers' decisions to select our way of Doing the Job based on the value-for-the money criteria, and in most cases, on the lowest purchasing price. Several observations:

  • The Value Proposition that uses these choices may represent the foundation for the Competitive Advantage for only one vendor, if all competing vendors choose to transfer their cost advantages to price advantages. If this is the only criteria used by the buyer to take the purchasing decision (not at all unusual), all the other vendors (with higher costs and prices) will loose.
  • No price-based Competitive Advantage can be sustained (on medium-long term) unless the costs structure supports the profitability and this has implications for the mandatory support of a Capabilities System that can reduce the external costs (resources suppliers, distribution channels, etc.) and internal costs (the internal processes) to maximum.
  • The price seldom refers only to the upfront price but by the TCO (Total Cost of Ownership), which depends on the Business Model employed to deliver the Value Proposition to the customer (e.g. the HP printers, the Nespresso coffee machines, or the Gillette shavers are cheaply priced upfront, but their consumables are sooo expensive, low-cost airlines with most complementary services, at a cost).

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The same choices can focus our Strategy on customers' decision to select our way of Doing the Job along the budget fitness criteria, although this criteria may be met by more than one vendor (e.g. public tenders with over-budget bids disqualification).

? The Strategic Choices F2 - Differentiation (or Product Differentiation) focus our Strategy on customers' decisions to select our way of Doing the Job based on its usability for Doing the Job. In most cases, this depends on the characteristics of our products or services offered to the customer (e.g. quality, features, durability, speed, warranties, SLAs, etc.). Please note that the characteristics related to compatibility or fitness with customer's specifics (other than the budget) are addressed by a different group of Strategic Choices (see below).

On the other hand, these choices can focus our Strategy on customers' decisions to select our way of Doing the Job based on the accessibility to the characteristics of our product or services. If the customer buys a bare-bone solution and needs to pay extra for many of its components (some of which may me not be really optional), this may place our offer at a disadvantage, compared to competitors' offers that have all the components included (e.g. the price of some drone frames that have flight capability are only a small fraction of the fully-equipped configuration, compared to competing ones which are fully equipped, out of the box).

G. Strategic Positioning for Customer Focus

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? The Strategic Choices G1 - Customer Intimacy focus our Strategy on customers' usability of our way of Doing the Job, represented by the life-cycle experience of customer's relationship with the vendor. These choices are aiming to exceed customer's expectations during the full cycle of the relationship, from presales or advertising, to product/service use, to service closing or product disposal.

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These choices involve an advanced interactivity with the customer at all contact points and require an excellence level in Customer Management, Co-creation and the anticipation of all possible customer expectations before, during and after employing our product or service for Doing their Job.

At the same time, these choices can focus our Strategy on accompanying our way of Doing the Job with an anticipatory and fast responsive accessibility to all the Customer Support or User Training functions that the customers might require.

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? The Strategic Choices G2 - Customer Value Added (or Horizontal Value) focus our Strategy on the added value of our way of Doing the Job (e.g. complementary information or assistance in best using the product or service, services associated with the product, like installation services for the heating, ventilation or security systems, preventive maintenance for industrial equipment, etc.).

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The same choices can focus our Strategy on customers' decisions to select our way of Doing the Job based on the fitness with other products or services in the same class or category (e.g. one-stop-shop offers, like integrated cable-telephony-internet-mobile, complete set of appliances supplied by the same vendor, specialised stores, etc.).

H. Strategic Positioning for Transaction Control

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? The Strategic Choices H1 - Exclusive Channel (or Channel Dominance) focus our Strategy on locking-in customers' accessibility to of our way of Doing the Job, in the locations in their proximity. This may be achieve by locking-in certain sales channels, limiting customers' choice between competitive products or services and locking-out competitors' access (or reducing it) to the customers who use those sales channels (e.g. exclusivity of the distribution agreements, filling-in a limited shopping area before the competitors, etc.).

What do you think, which brand of beer would sell best in this crammed grocery store, irrespective of its price or quality?

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The same choices can focus our Strategy on locking-in the sales channels or locations that have the best fitness with the places where the customers use to shop (e.g. high customers traffic locations, locations close to customers' home or work places or on the most frequented home-work transport routes, like the pick-up stations for people who shop online at work and pick-up the goods purchased on their way home, etc.).

? The Strategic Choices H2 - Dominant Exchange (or Multi-sided Transactions) focus our Strategy on the value of choice provided by our way of Doing the Job, by locking-in the customers with the multitude of third-party products or services, made available through product platforms (e.g. supermarkets, shopping malls, online stores with a large number of categories, etc.), where sellers and buyers meet in a convenient way, but the sellers have to accept the conditions imposed by the platform owner. This includes service platforms, like Airbnb, Uber, eBay or Amazon, Yellow Pages or Alibaba.

For example, the white labels represent a way in which supermarkets control the transactions, gaining an incremental revenue, beyond the commissions and taxes paid by the brands displayed in their shopping aisles.

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At the same time, these choices can focus our Strategy on locking-in the customers with an advanced usability of our way of Doing the Job, represented by the facilitation of choice from the most used products or services, as rated by popularity or level of interest, by previous customers' reviews, by specialist reviews or by association (e.g. Amazon's 'buyers of this product also bought these other products ...').

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I. Strategic Positioning for Unique Advantages

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? The Strategic Choices I1 - Proprietary Standard (or Business Ecosystem) focus our Strategy on locking-in the customers to an added value of Doing the Job, based on our network of complementors that are aligned to our formal or de-facto standard built around our successful product or service (e.g. operating system with compatible software applications, software platform with applications interfaced with it through our proprietary APIs, equipment with standard connectors for third-party accessories, etc.).

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The same choices can focus our Strategy on locking-in the customers on the fitness of a category of adjacent products or services that have guaranteed inter-operability, due to the built-in compatibility design (e.g. family of tools with interchangeable parts, software products that have common modules, allowing an advanced exchange of data or seamless complementary functionalities, etc.).

? The Strategic Choices I2 - Unique Enablers (or Unique Resources / Capabilities) focus our Strategy on providing customers' accessibility to ways of Doing the Job through products or service that include rare resources or resources that are difficult or expensive to access by competitors. The Resources-Based View of the Firm (RBV) and the VRIN/O concept (Value, Rareness, [in]Imitability, Non-substitutable/Organized) provide a wealth of examples for these choices.

They are also the main choices for companies that operate based on geographically-defined licenses issued by unique or dominant vendors (to exclusive regional or local agents), or by regimentation authorities, which give them rights of exclusive or limited delivery of products or services within a certain territory (e.g. utility companies that operate in a regulated or partially-deregulated industry, telecom operators, exclusive distributors within a certain country or region, etc.).

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The same choices can focus our Strategy on the high usability of the ways of Doing the Job, based on the most popular, successful or dominant products or services available, based on unique or differentiating capabilities and distributed through a professional network of distributors and support services providers (e.g. top-brand automobiles distributed through a network or retail partners and authorized service units, audit or advisory business services available through a professional network of local practices / franchises, etc.).

The Capabilities-Driven Strategy model (developed by Strategy&, former Booz & Company) can provide a wealth of additional examples for these choices.

J. Strategic Positioning for New Value

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? The Strategic Choices J1 - Disruptive Innovation focus our Strategy on providing customers' accessibility to ways of Doing the Job that have never been accessible before, either due to the lack or immaturity of the required technologies or methods, or due to the prohibitive purchasing costs (e.g. high-definition, auto-focused and stabilized pictures taking embedded in mobile phones, quick access to music by downloading from the Internet, access to electric cars or hybrid cars, etc.).

The same choices can focus our Strategy on the advanced usability of the way of Doing the Job, due to a simpler or easier functionality of our products or services that have been complicated to use before, or required advanced training (e.g. high resolution pictures or videos taken with smartphones with auto-focus and image stabilization, self-publishing platforms that allow anybody to publish a book within days, etc.).

The Disruptive Strategy model, developed by Prof. Clayton Christensen, includes a lot of examples on creating New Value based on disruptive innovation.

? The Strategic Choices J2 - Conceptual Innovation focus our Strategy on providing customers with ways of Doing the Job that offer a new combination of value factors that are not included in products or services existing on the market. This approach departs from the traditional combination of value factors that the current vendors compete on.

At the same time, these choices focus our Strategy on innovating new ways of Doing the job that address the fitness with functional or emotional needs or desires of either marginal customers or non-consumers that are not sufficiently fulfilled by any of the current alternatives available to them.

The Blue Ocean Strategy model, developed by by W. Chan Kim and Renée Mauborgne, offers a variety of examples of applied Conceptual Innovation Strategic Choices.


Did you like the article? Then share it with those that might find it helpful. As always, your observations, questions or critique are more than welcomed.

Eduardo Muniz

GM/Strategic Change Consulting Practice Lead at The Advantage Group, Inc.

6 年

Hi Mihai: Just to get a better understanding of your post may I ask What's your definition of Strategy? I am interested. Thanks in advance. I look forward to learning from you

Choo Huat, Billy Teoh

"C-Level Executive Coach"

7 年

Thanks Mihai for your valuable sharing of the Penta model. Excellent insights for me to explore deeper. ??

Choo Huat, Billy Teoh

"C-Level Executive Coach"

7 年

How to choose where to play? (and the timing to do so). And the choice taken to how to play to win it? The alignment and strategic options that can predict higher probability of success will be key. How do validate the choices taken both at "where" and "how", would be more interesting for me. ??

Choo Huat, Billy Teoh

"C-Level Executive Coach"

7 年

The integrativeness of the Penta model looks representative of many existing strategy models (and possibly covers more comprehensive then most models). However, it will be interesting to have an insight of which choices chosen, could predict the right strategies using the Penta model, that you are aware of, that could be shared.??

Choo Huat, Billy Teoh

"C-Level Executive Coach"

7 年

Thanks Mihai for familiarizing me to the model. Do you have any reference of which Organization may be using this model currently? ??

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