The strive for market share is one that needs a solid grounding in strategy. A firm must understand their product from conception to creation in order to get the right mix of strategic direction.
Different kinds of businesses need different kinds of strategy, and therefore a solution must be flexible to produce the best results.
Recently in the Harvard Business Review (HBR), a team of strategic specialists wrote on the importance of tailoring strategy to the particular operating environment of the company, outlined primarily as platform or pipeline.
In today’s competitive world a traditional pipeline business such as Nike must operate with an element of platform.
Pipeline or platform?
As information technology has lessened the need to own assets and physical infrastructure, platform businesses have become more and more familiar. Before the IT boom, platform companies existed in the form of newspapers, connecting advertisers with subscribers.
According to the HBR, companies like Apple leveraged their platform prowess to become overnight market leaders, and it was their strategic advantage that got them there. Apple went from 3.4 per cent market share in 2007 to 12 per cent in 2009, and a current peak of 23 per cent in 2011 and the first quarter of 2012.
Apple was able to achieve this by leveraging its platform potential – all in the face of healthy, yet current pipeline competitors like Nokia, who, from the outside looked like a formidable force of strong differentiation and large scale operations.
By strategizing effectively, platform companies such as Apple can overtake traditional market leaders like Nokia. They do this by offering a high-value exchange between users and producers that is adaptive to the changing and upgrading of applications and software.
In today’s competitive world a traditional pipeline business such as Nike must operate with an element of platform. As addressed by authors Charles W. L. Hill and Gareth R. Jones in their book ‘Essentials of Strategic Management’, before the internet, Nike had two main strategies, to make the best shoes on the market and then to advertise those shoes using guerilla marketing.
Now, Nike has elements of platform strategy across its offering, linking its core offering, shoes, to smart watches and smartphone fitness apps, to name a just a few.
Keeping it simple is a solid strategy
Whether your business is a pipeline, a platform, or both – a business strategy need not be overly complicated. If you’d like to learn more about how StrategyBlocks can help your company by using flexible, adaptive software, don’t hesitate to get in touch today.