Strategic

Ohmae’s Strategic Triangle as an Intuitive Process

The strategic triangle model by Kenichi Ohmae is a model which focuses on 3 key factors for success and must be in balance. Ohmae’s strategic thinking as an intuitive process Ohmae (The Mind of the Strategist – 1982) blames formal strategic planning processes for having withered strategic thinking.

Ohmae’s Strategic Triangle

Ohmae says strategy is essentially a creative process in which the strategist must pay attention to a strategic triangle of 3 Cs.

1. Corporate-based strategies build competitive strength by focusing on the superior competences which the corporations has in comparison to rivals. He cites Sony’s skills in miniaturization of electronic circuitry and Coca Cola’s control over distribution channels as examples of this.

2. Customer-based strategies gain superior market position by segmenting markets closely and ensuring products and service are closely tailored to requirements of each segment. The ability of Mercedes-Benz or BMW to cornering a particularly valuable segment of the car industry might be an
example of this.

3. Competitor-based strategies. Close identification of the methods of rivals and exploitation of any weaknesses in them, such as absolute cost differences or flexibility of supply. Ohmae cites the example of Toyota utilizing its superior R&D and quality assurance systems to launch Lexus to exploit the executive limousine market at prices unattainable to Jaguar and Mercedes-Benz who relied on more traditionally engineered cars and car plants.

The development of such strategies requires management to engage in strategic thinking.
 Observe the problems: The manager must be actively engaged in the business and see the issues first-hand (e.g. quality issues, bad customer experiences, loss of sales contracts etc.)
 Ask the right question: Focus on finding a solution to a problem rather than just a remedy to a symptom. E.g. a software developer faced with late-running and excessively complex and resource hungry final products could decide to put in extra resources to solve the symptom. In fact the problem
may be that the R&D function is divorced from the Sales function and so not concerned with time to market or ultimate value-in-use of its developments.

 Group problems together: Use processes of abstraction (e.g. brainstorming sessions) to see what problems have in common (the key factors) and hence to deal with these. For example, an office equipment supplier grouped the problems of excessive costs of development, limited product knowledge amongst service staff, poor sales performance and burgeoning inventories of parts and accessories. The underlying key factor was the width of the product range. Reducing the number of models available solved all the problems at one stroke.

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