The world of business strategy can feel overwhelming. Frameworks abound, offering guidance on evaluating opportunities and assessing potential strategies. However, a crucial question remains unanswered: Where do these strategies come from?
Strategic planning is essential for business success, yet most existing frameworks fall short in one critical area: they don’t help you identify opportunities or craft innovative strategies from scratch.
Renowned strategy expert Gary Hamel aptly noted, “The dirty little secret of the strategy industry is that it doesn’t have any theory of strategy creation.”
Drawing inspiration from creativity research, we’ll unveil a framework that empowers you to identify and craft winning business strategies. We’ll delve into four distinct categories, ranging from the familiar to the groundbreaking:
- Adapting Industry Success Stories
The most straightforward approach leverages successful strategies within your industry. Think of it as following the playbook of proven winners.
Taking Fast Fashion by Storm: The Shein Phenomenon
A prime example is Shein, the Chinese fast-fashion giant. They’ve pushed the boundaries of the concept, introducing a mind-boggling 1,000 new items daily, compared to the 500 weekly launches of competitors like Zara. Additionally, Shein boasts significantly lower prices and operates entirely online, eliminating physical store overheads. This adaptation of existing strategies has fueled their explosive growth, capturing 40% of the U.S. fast-fashion market in just two years.
Rocket Internet: Masters of Creative Imitation
German company Rocket Internet takes adaptation to a whole new level. Their strategy involves “creatively imitating” successful online retailers and marketplaces across various regions. Jumia, their online retail venture in Africa, exemplifies this approach. Inspired by Amazon’s “everything store” concept, Jumia tailored it to the African market’s needs. They built their own delivery fleet due to limited logistics providers and established a team of sales agents to cater to areas with restricted internet access.
- Borrowing Strategies from Unexpected Places
Inspiration can strike from anywhere. By looking beyond your industry, you might discover strategies that can be cleverly applied to your domain.
Best Buy’s Fightback: The Power of “Store-within-a-Store”
In 2012, Best Buy, the U.S. electronics retailer, faced a crisis. Consumers relied on their stores for product knowledge but purchased online, primarily from Amazon. Hubert Joly, Best Buy’s CEO, masterfully reversed this trend with the “store-within-a-store” strategy. Inspired by the department store model (pioneered by Le Bon Marché in 1852), Joly understood Best Buy’s unique national presence. He offered brands like Samsung and Sony designated areas within Best Buy stores, allowing them to showcase products and engage customers directly. This strategy transformed Best Buy from Amazon’s showroom into a destination store.
Hilti’s Tool Revolution: Borrowing from the Heavy Machinery Industry
European tool manufacturer Hilti faced a similar challenge – a commoditized market. Traditional approaches like price cuts or improved quality wouldn’t suffice. They found an answer in the leasing model, prevalent in the heavy machinery industry. Hilti’s “Tools on Demand” program offered customers access to the latest tools through a monthly subscription, eliminating upfront costs. Inspired by a seemingly unrelated industry, this strategy revitalized Hilti’s profitability.
- Combining Strategies for a Unique Edge
Sometimes, the most innovative strategies emerge by combining elements from existing approaches.
Spotify: The Power of Music and Social Connection
Launched in 2008, Spotify has become a music streaming giant with over 500 million users. Their secret weapon? Combining on-demand music streaming with social networking features. Users can explore their friends’ playlists, share their own, and follow artists. This unique blend fosters a sense of community, keeping users engaged beyond simply listening to music.
The Huffington Post: A Blend of Journalism and Blogging
The Huffington Post, launched in 2005, offers another example. It combined traditional journalism with the dynamic nature of blogging. They retained key journalistic elements like professional journalists, original reporting, and fact-checking but also embraced continuous updates and audience interaction, features typical of blogs. This innovative blend revolutionized online news delivery.
- Strategies Built from the Ground Up Thinking Outside the Box
The most groundbreaking strategies often involve defying conventional wisdom and creating something new.
Elon Musk and SpaceX: First Principles Thinking in Action
The visionary entrepreneur Elon Musk embodies this approach with his “first principles thinking.” He challenges assumptions, breaks down problems to their core elements, and invents solutions from scratch. A prime example is SpaceX’s reusable rockets. When buying used rockets proved too expensive, Musk questioned the high cost (step 1). He deconstructed the rocket into its components and discovered that materials comprised only 2% of the price (step 2). So, he purchased raw materials at market rates and built his rockets (step 3). This revolutionary approach significantly.
INSIGHTS
Adapting a familiar strategy requires in-depth knowledge of a single industry. Importing and combining strategies necessitate understanding multiple industries and identifying transferable insights. Creating strategies from scratch demands more profound creativity and reflection, breaking problems down to their fundamental principles and building new solutions from the ground up. By understanding and applying these four strategic categories, businesses can systematically identify opportunities and craft innovative strategies that drive success.
