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Highlights of The Association for Strategic Planning's 2004 conference, “Strategy in a turbulent world”
Stan Abraham
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Stan Abraham, (2005),"Highlights of The Association for Strategic Planning's 2004 conference, “Strategy in a turbulent world”", Strategy &
Leadership, Vol. 33 Iss 4 pp. 53 - 57
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The Association for Strategic Planning plans Dwight Allen, Deloitte Research – the world maintain that capitalism and
to hold its fifth annual conference in Los ‘‘Globalization at risk: why your open markets are the best means for
Angeles in November 2005 strategy should allow for a divided achieving economic success and
(www.strategyplus.org). Stan Abraham, a and disorderly world’’ raising a country’s standard of living;
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DOI 10.1108/10878570510608068 VOL. 33 NO. 4 2005, pp. 53-57, Emerald Group Publishing Limited, ISSN 1087-8572 j STRATEGY & LEADERSHIP j PAGE 53
view says that governments really between the US and the EU. For each people, the appropriate organizational
decide who gets what. Industrial scenario, strategists should come up structure, cultural discipline, and
nations (Western Europe, North with an optimal strategy. Common or strategic planning – the strategic
America, Japan, Korea, Australia, and ‘‘core elements’’ among the strategies process that takes you from where you
New Zealand) are not the only ones can be planned for, leaving only are to where you want to be. But for
who need more energy for electricity ‘‘contingent elements,’’ those that are most nonprofits, strategic planning as it
and cars; they must share energy different for each strategy, to be is done in the corporate sector takes
resources with developing nations accounted for. Companies can then too much time and money. Instead,
(Brazil, China, India, Indonesia, and the make a limited investment in a strategy nonprofits need more analytical tools
Middle East). In all major economies, – such as by acquiring facilities or land and better strategic thinking and
including China, demand for oil will with options to develop, or a joint execution.
increasingly outstrip supply to the year venture with options to increase or
2030, forcing them to depend heavily decrease participation. If conditions Peter Bershatsky, Chasm Group –
on imported energy. Producing and change that jeopardize the strategy, it ‘‘Managing innovation: strategy for
transporting this needed energy will be should be curtailed or abandoned; if turbulent times’’
costly, not only in economic measures, conditions continue to favor the Beginning with an adaptation of the
but also in terms of the resources strategy, the initial investment can be industry-lifecycle model in Geoffrey
needed to safeguard supplies from increased or options exercised. Moore’s book, Crossing the Chasm,
violence perpetrated by terrorists or summarized in Table I, Peter
rogue nations. Given this growing David La Piana, founder and
Bershatsky focused on what to do once
tension between oil demand and an president of La Piana Associates,
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PAGE 54 STRATEGY & LEADERSHIP VOL. 33 NO. 4 2005
Table I Industry lifecycle model
Lifecycle stage Adapted to technology adoption Type of customer Customer frame
Emerging Innovators and early adopters ‘‘Techies’’ and ‘‘Visionaries’’ Let’s try it! Let’s get ahead of the herd!
Growth Early majority ‘‘Pragmatists’’ Stick with the herd!
Mature Late majority ‘‘Conservatives’’ Hold on!
Declining Laggards ‘‘Skeptics’’ No way!
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VOL. 33 NO. 4 2005 STRATEGY & LEADERSHIP PAGE 55
United is moving to address these In general, producers have not yet year; homes with two would purchase
challenges in the following ways: figured out how to compete in the new 17 per year, and those with three or
technological/Internet age. more purchase 22 per year. Certainly,
B leveraged the protection of the
Government appears unable to movie purchases follow purchases of
bankruptcy process – achieved
‘‘control the genie.’’ Consolidation and DVD players, which have now become
significant savings and flexibility
cost cutting continue and industry quite affordable. A third change is
through work rule, scope, and wage players are less willing to take risks. looming on the horizon – the shift to
and productivity changes; Consumers are changing in terms of HDTV. If that transition is managed well,
B leveraging TED (a low-cost their expectations, desires, and it can add a lot of value to companies in
subsidiary airline), United Express, perceptions of value. Early home entertainment.
Cargo, MRO (maintenance, repair, experimenters lead the market, which
Competition also requires a broader
and overhaul), and STAR alliance; still needs to be educated. Most paths
focus than just being aware of your
currently lead to a subscription model,
B moving assets to foreign countries – rivals; for example, anything anyone
thanks to the internet allowing
less competitive markets; does in their leisure time competes with
consumers to dictate how the industry
the time people spend watching more
B implementing plans for increased changes.
DVD movies. Our long-term planning
security;
Afternoon Executive Panel, horizon is no more than five years
B lowering fuel costs – hedging future because the landscape changes so
‘‘Strategy execution in turbulent
prices and implementing fuel-saving rapidly. Strategic planning is more
times,’’ moderated by Iain
techniques; and important than ever, especially the
Somerville, Founder and Managing
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B lobbying Washington, DC – Partner, Somerville and Associates external focus part for a
educating legislators about the consumer-driven business like ours –
The purpose of this session was to give monitoring and understanding the
airline industry.
examples of strategic-planning changing environment. As a reality
The intent is to transform United into a practices that produce results in check, one must know the critical
flexible and cost-focused organization today’s often difficult business climate. issues the firm faces, develop ways of
that can respond quickly to all unknown Summaries of four of the five addressing them, then develop action
challenges. presentations follow. plans to meet the goals that have been
set – complete with budgets, roles,
Amy Brandt, CEO and President, WMC
responsibilities, etc. As you implement
Jay Boberg Mortgage Corp. (a GE Consumer
the plans, feedback on how you are
Finance Company)
The music business has been marked doing is important for staying on track;
by consolidation in both labels and In 2000, WMC Mortgage Corp.’s discovering what works and what does
distribution. Four companies – Warner business model changed to be a 100 not is key to doing it better the next
Music Group, Sony/BMG, Universal, percent B2B internet lender with all its time. And above all, keep efforts
and EMI – now control the underwriting automated balanced between achieving
recorded-music industry and one (WMCDirect.com). In 2004, it passed short-term and long-term results.
player, Clear Channel, now dominates $18 billion in assets and was acquired
music broadcasting. Turbulence in the by GE. In the midst of rising interest Craig Levra, Chairman and CEO, Sport
music industry is characterized by: rates, increasing competition, and Chalet, Inc.
increasing consumer choices, WMC is
B digitization of content; expanding its product offerings and In years past, Sports Chalet’s planning
B inability to protect copyright; strategic marketing efforts, expanding revolved around the annual budgeting
its site, increasing its sales force, and process and was therefore tactical and
B peer-to-peer file sharing; not strategic. A company that had gone
providing alternative channel initiatives.
B internet as a means of discovery, public in 1962, it had a five-year
e.g. Yahoo music and videos will find Tony Rodriguez, Senior VP, Warner technology plan, but little else. In fact, it
other selections for you; Home Video wanted to double sales over a five-year
period, and use a more formalized
B satellite radio stations The entertainment business is an
process, but did not know how to go
(narrow-casting); industry undergoing constant change.
about it. In April 2003, it selected a book
Two changes have had profound
B internet radio individualized through on strategic planning (Bradford and
effects: the VHS to DVD shift affected
profiling; and Duncan, 2000) and a moderator, and
quality and economics, and the
began changing its planning process.
B physical distribution no longer purchase vs rental trend. We found that
critical for access to content by households with one DVD player would The company developed three
consumers. purchase on average one DVD movie a responses to its strategic challenges:
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PAGE 56 STRATEGY & LEADERSHIP VOL. 33 NO. 4 2005
1. Be in one-store markets (i.e. the only happening in the industry was a major continued growing as it was spun off in
sporting-good store in that area). event for us. We thought, if the market is 2002, and then was later acquired.’’
switching from pagers to cellular, let’s
2. Remodel existing stores and
go sell some cellular. At that time,
relocate some of them. Note
anyone who wanted a cell phone and
3. Accelerate the store-expansion had credit could get one. But our 1. Panelists included Scott Dolan, Senior
program. customers – our dealers – weren’t VP, United Airlines and President,
located in affluent areas, so all their United Cargo, Jay Boberg, former
Already, the second quarter’s results
customers, who were getting President, MCA Records and
(the first since implementing the new
increasingly younger, didn’t have ready Cofounder, IRS Records, Alice J. Taylor,
plan) are superior to the same quarter a
credit. Many of these new customers Director, Strategy & Partnering,
year ago, so we seem to be on the right
were demanding prepaid phones. In Homeland Security and Services Group,
track.
fact, over the next five years, fully 50-60 The Boeing Company, Patty DeDominic,
Cliff Tompkins, President, Prepaid percent of new subscribers wanted CEO, The PDQ Careers Group and Vice
Concepts, Inc prepaid service. So what we did was to Chair of Strategic Planning, Board of
capitalize on this essentially ‘‘cash’’ Directors, the Jane Goodall Institute,
In 2001, Cliff Tompkins was running a
business – from the end-user to the and Rohit K. Shukla, Founder and CEO,
paging company, and prospects LARTA (Los Angeles Regional
merchant selling the cards to the
looked good because his three other Technology Alliance).
company that supplied the prepaid
competitors had just declared
cards. We had two skill sets –
bankruptcy, clearing the way for him to
electronic systems and knowing how to
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VOL. 33 NO. 4 2005 STRATEGY & LEADERSHIP PAGE 57