1. The ARENA Genome: Harmonic Strategic Planning
Refinement Stages:
Arena, Focus, Action
Create Strategy
Arena Layers:
Corporate,
Business
Function-
Define Hierarchy
Corporate Layer:
Portfolio Businesses
Maximize Value A R E N F O C U S A C T I O N
Business Layer:
Positioning Products by
Market Strategy
Function Layer:
Process, Project and Product
Agile value drive
Arena actors:
Partners, Threats; Current, Future
Tailored Patterns.
Filter Criteria
Prioritize attention
Manage Control span
AMEV vs. Drucker, Roadshow cloud vs. Robner (analysts)
Warren Buffet (Berkshire Hathaway): Financial vs. Business understanding
Management-by-exceptions, by-walking-around.
Jack Weltch, Stock market fluctuations, share splits.
Hierarchy: accounting -> Hypertext: zoom in/out: resolution management. Professional, geographic concentration.
Arena:
Focus
Action
Dynamic Vectors:
Vision, Venture, Value.
Act, Review, Revise

2. Business Arena Sustainable Competitive Advantage Low Cost
Differentiation
Market
Scope
Mass Market
Cost Leadership
Niche
Cost Focus
Focused Differentiation
Deep Products $
Quality
Hyundai
BMW
Stuck
In the
Middle
Tata RR
# Institutions
Size
Focus
Death
Valley
Juggernaut
Bank size and Product-market strategy

3. Attack angle: Skimming (Type I disruptive Innovation)
Focus: Returning R&D investment, Constrained production capacity, Limited demand
PC Processors $ D
Time/Quantity
Cost
Leader
Follower
Advantage
IBM
Effect
P III
486
Hong Kong
Effect
Non-recurring
Crossing the Chasm $ D
Chasm
Cell Phone $ D
Beeper
Matsushita
VHS
Orange
Sony
Beta
Cellcom
Skim
Niche
Niche
Products
Ampex
$50K
Pelephone
Satellite
Iridium`
Time
Sales
Mass
Market
Distributors
Chasm
Haaretz, Yuval dror, , G6: Typical processor launch price>$600. Nov P4 Launch $/1000 units: Last week: -58% (1.5Ghz more much more expensive. First Quiriat Gat then 2 plants in US. AMD of 9% vs. last year. Intel market share: 81.5%->77.1, AMD: 17.1%->22.2%. Q42001: Fab investment: $7.5B, R&D: $4.2B.
Price of Ampex VCR>$50,000
W.C. Kim and R. Mauborgne, “Knowing a winning business idea when you see one, HBR Sept-Oct 2000: “In 1998, motorola rolled out a product that was supposed to redefine the world of mobile telephony. The iridium, declared the company, would be the first mobile phone to provide uninterrupted wireless communication anywhere in the world, no matter what the terrain our country. …Heavy, needed a host of attachments, couldn’t be used in a car or building. Price: $3,000.
Kodak
Fortune, Power struggle. Intel: Pentium from ’93. Celeron vs. AMD, Cyrix. Xeon: modified Pentium II for servers&workstations. AMD K6 & K6-2 K6-3for sub$1,000 PCs: Compaq, HP, IBM, NEC. Cyrix MII (subsidiary of NAS). Power
Skeptics:
Technology
Supporters:
Product
Skeptics:
Market
Supporters:
Company
Specialists
Generalists

4. Attack angle: Storming
Focus: Maximizing revenues during patent duration; Rigid demand
Storming
Pharmaceutical $ D
Chasm
Storming $ D
SensorExcel
(+60%)
Mach3
+35%
Atra
Storming $ D
2.Follower: IBM effect
Open Architecture
Outsourcing 3.
Me Too:No Name
Hong Kong Effect 2.
Generic 1.
Ethical
Viagra
Prozak
Compaq
Devoted Follower
1.Leader: Apple
Closed Architecture
Self sufficient
Time
1st
50%
Price
2nd
Patent
Umbrella
Pricing
Affymetrix, microarray Gene Chip producer: quarterly report, Nov. 2000, 5 years after launch:
The company may lose customers unless it improves its ability to manufacture its products and ensure their proper performance
Researchers: chips with spurious results, delivery months beyond schedule
No real competitors to lose customers: 400 < ssued and pending patents
License agreements with 20 companies – restrict to arrays 1/10 affymetrix genetic probes
Competitors: Patents on own designs: Incyte Genomics: use robots to deposit up to 10,000 pre-synthesized genetic probes onto a glass slide. Motorola holds the probes inside a thin slab of gel.
Nicholas Naclerio, head Motorola’s BioChip division: “if we want to make a medical diagnostic with 40 genes on it, and 20 companies hold patents on those genes, we may have a big problem”.
Affymetrix: Sciam Feb2001p.24 “Patently Inefficient” by. WWG
European
Patent Office
Nanogen
Motorola
Oxford Gene
Technology
Applied
Biosystems
Affymetrix
Multilyte
Protogene
Laboratories
Incyte
Genomics
Gen Logic
Synteni
HyseQ

5. Attack angle: Flooding
Focus: Market share leadership (Eyeballs, Hits); Lock-in+Oligopoly+Value added
Cost of ownership - CoO
Ford
Levittown
Diners’
Zara
IKEA
McDonalds
Flooding $ D
Sony: $279+
RealNetworks
Nintendo: Dolphin
IBM+3D by ArtX
MS Xbox
$299.99
($125)
Launch:
800K games,
$500M marketing budget
Dumping $ D
Sony
1. Client
Navigator
Leveraged Dumping $ D
1. Server
Navigator
Acrobat 2.
Explorer NT
Stage 1
Opening
Consolidation
vs. Death based on 25,000 companies
Stage 2
Scale
New/deregulated/Privatized Industry
Stage 3
Focus
Stage 4
Balance&Alliance 0%
20%
40%
60%
80%
100%
Railway
Telecom
Services
Utilities
Insurance
Banks
Airlines
Chemicals
Drugs
Automotive
Suppliers
Pulp & Paper
Restaurants
&Fast food
Breweries
Food
Steel makers
Automotive OEMs
Rubber &
Tire prod.
Toys
Truck builders
Aerospace suppliers
Aircraft OEMs
Shipbuilding
Distillers
Defense
Automatic controls
Tobacco
Shoes
Soft
Drinks 25
Years
CR3: Market share
1.IBM
White planes
Hybrid Car
Dumping $ D
2.Toyota
Honda
Market Consolidation: Graeme K. Deans, Fritz Kroeger and Stefan Zeisel, HBR, “The Consolidation Curve”, 2002 p. 20 based on A.T.Kearney’s Value-Building Growth database of 25,000 companies
Amdox problem with small carriers who grow: SAP
Haaretz, , G8” War games: MS vs. Sony”, Xbox: Intel: 733MHz, 8GB Disk. Merrill: $-125/box. IDC: Sony will probably reduce price to $279. “how to charge money from kids?”: Monthly payment for game channel.MS: 200 developers, Sony:300 experienced.

6. Attack angle: Piercing / Guerilla (Type II disruptive Innovation)
Focus: Penetrating through niche, transforming non-entity into recognized brand
Toyota, Honda, Nissan
Japanese Guerilla $ D
OEM
S.E. Asian Guerilla $ D
Komatsu
Korean
1.Shareware: fusion
Copy Left: Gnu, Ada
Linux Guerilla $ D C H A S M
Lexus
Acura
Infinity
2.Red Hat
Skinning the cat