This is “Chapter Summary: A Matter of Choice”, section 3.2 from the book Competitive Strategies for Growth (v. 1.0). For details on it (including licensing), click here.
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3.2 Chapter Summary: A Matter of Choice
Life is fundamentally about choices, and people make many different kinds of choices in the marketplace. We choose one competitive brand over another. We choose to work for one firm and not another firm. We choose to buy in to management’s new process initiative or stick with the old way. At the core, the goal of leadership in the marketplace and in organizations is to create conditions to give a high probability to choices coming our way. The most effective way of accomplishing this is to uncover, deeply understand, and respect the value that people seek in these choices. Surprisingly, we rarely take the time to do this. So those who do take the time enjoy a big advantage over those who do not.
Defining the context in a 3-Circle project is critical, as it helps managers or analysts really get their hands around the choices being made, why such choices are made, and where the growth opportunities exist. The more clearly and precisely the decision context is defined, the deeper the insights, the stronger the analysis, and further—paradoxically—the more likely the insights will generalize to other contexts. The real value of a context well defined is the ability to really deeply explore the value sought by the customer.
The key principles of context definition include:
- Clearly define the company “unit” under study—with what unit are you creating value (a department, a product or service line, you or yourself, a service department, etc.)?
- Clearly define the customer segment who you would like to choose your offering. The key is to understand the value this segment seeks. Segment “selection” presumes that we already know how the market is segmented; in fact, you may need a segmentation exercise before you can select.
- Choose a competitor who is a viable object of choice for the customer.
- Remember that—even though an apparent “narrow” context may seem overly restrictive—the resulting depth of analysis more than compensates for the limited breadth. We can apply the analysis to other customer segments and competitors later.