New Approach To Strategic Deployment

New Approach to Strategic Deployment Mahshid Yazdanpanah Masters Degree in Industrial Management & Quality Engineering, Managing Director, Institute of Quality Engineering, Iran [email protected] Abstract In global system, the future state, that every organization desires, involves interdependent decisions. Different activities of any organizations take place at cross – purposes, the result is usually global crisis attributed to the lack of effective systematic integration. This issue takes place inside the organizations as well, and causes chronicle internal crises. We need integrated approach because of common resources and related impacts in systems. In the global level we are faced to Energy, Food, Environment and in the countries, high rates of unemployment, inflation, strikes, and recession and in the organizations we encounter wastes, unconformity, stocks, decreasing demand, losing the market, loss. Doesn't need to mention, there are specific cause for every problem in every situation, but the basic root of some of these general crisis are unbalancing in the systems. When there are common resources and several nonintegrated consumers for those resources soon or late, we will have bottle necks and then crises. In a system the crisis expand and transfer to other sub systems. To beat these crises we can't try to resolve them in sub systems. We have to choose systematic integrated approach. This approach needs to be dynamic too. Usually periodic and chronicle crises, in relevant systems, attributed to the common resources or transferred from one to another. The interdependent decisions with contradictory purposes which launch the crises drive from strategies. Unfortunately strategies have some "epidemic models"; it means most of strategies have a set of common assumptions which are not accorded to natural axioms of system. The principal complexity in systems derives from the interrelatedness of the decisions rather than decisions themselves. This paper doesn't deal with universe crises but the idea that "the 21st century is organizations century" shows that the wrong strategic decisions in organizations, reinforce the universe crises. The basic assumptions of traditional strategic models increase this impact. This paper will try to point these impacts and introduce a new approach to decrease the confrontation between interdependent strategic decisions, in the organizations and related industries.

Introduction "In an organization there are significant benefits to gain through an explicit process of formulating strategy, to insure that at least the policies (if not the actions) of functional departments are coordinated and directed at some common set of goals"

(Porter: 1980). As Porter quoted, in small systems such as organizations which all the parts are under control we need such coordination, so in the expanded systems such as Industries, Union, Region, countries, Continent and Glob, coordination would be more and more important. Surly there are several plans for managing the environment, articulation of these plans provides a mechanism of communication that promotes coordination across the different parts of several levels. We believe designing strategic plan for organizations is one of important levels.

Because of political issues it is not possible to deal the global issues straightforward, but we can try to modify the procedures of strategic decisions to obey the social system's law, it means revising the assumption of strategic design and deployment. It seems there is an important need to introduce "a discipline for long term thinking in the organizations." There are many good reasons to try to take the future into account. But it need to be done systematically and integrated in the mother systems. How can we take the future properly into account? Doesn't daily routine drive out thinking and considering future? We know that strategic thinking rarely occurs spontaneously. But if our strategic thinking drives out future could the result strategies resolve the problems of future? Some study in current business models show we need integrated strategic approach in the organizations, and industries, to avoid contradictory decisions. In addition, there are some irrational assumptions as the base of these business models which increase the contradictory decisions in social systems. Day to day activities drive from strategies and for organizations strategies are as a guide or course of action into future, or a path to get from here to there. But it is clear that future does not exist now and this guide, road or course of action, proposed to create the future. If we look above the "trees" to see "the forest" we can see lots and lots of roads which tied to each other and there are several blocks, how would be created the whole future, when creating each organization's future depends on destroying other organizations' future. This is a bitter reality that drives from our wrong assumptions: competition and relying on "supply" and "existence market". As Mintzberg wrote in "The Rise and Fall of strategic Planning", "in general models, strategy is created at the intersection of an external appraisal of the threats and opportunities facing an organization in its environment, considered in terms of key factors for success, and an internal appraisal of the strengths and weaknesses of the organization itself, distilled into a set of distinctive competencies. Out side opportunities are exploited by inside strengths, while threats are avoided and weaknesses circumvented. Taken into consideration, both in the creation of the strategies and their subsequent evaluation to choose the best, is the values of the leadership as well as the ethics of the society and other aspects of so –called social responsibility. And once a strategy has been chosen, it is implemented." The common process in traditional approach to strategic planning is based on four critical issues; strengths, weaknesses, opportunities and threats. Here is a brief review on this process and its assumptions.

Environment Appraisal, We try to look at some traditional efforts which organizations do to understand their internal and external situation and the connection between them, now and tomorrow. Usually strategic visions are gained according to the results of environment appraisal. This approach shows that organizations are depended to the environment and vice versa. The organizations assess their external and internal conditions, once the objectives have been set. The major element of this assessment is the set of forecast made about future conditions. The features of future condition help them to predict and prepare. Gathering information about the environment often categorize as economic, social, political, and technological. But in the 1980s by porter's 1980 book a significant literature grew up around what is generally referred to as industry and competitor analysis, this model refer to as, competitive strategy. The most intention of competitive strategy is to understand the competitors' activities and then set the organization strategy according to competitors. Despite all this attention and effort, gathering and analyzing data in the field of competition, doing environmental analysis, fitting the results into the planning process, and evaluating its contributions have lots of difficulties. The study of strengths and weaknesses is considered as an important stage of gathering the information. Usually it is done by use of techniques whit simple check lists and tables of various kinds. The internal audit hardly advanced, and by

remaining not much more than judgment supported by checklist, is not very different from the general statements that managers have in their mind about their organization. Lack of up date information in all necessary fields, motivated the planners to build scenarios to replace straight forecasting. This is not simple business, however. There is the problem of deciding how many scenarios to build, for one thing. Planners' time is not limitless, neither is the manager's mental capacity to consider all the possibilities. The number of possible configurations that an environment can throw at an organization is not few. Even when the planners are quite sure that one of their scenarios is on the right track- as Wack claimed they were at shell- there remains the problem of convincing the management to do something about it. A number of premises underlie the prevailing process of strategic design: 1. "Strategy formation should be a controlled, conscious process of thought. 2. Responsibility for the process must rest with the chief executive officer: that person is the strategist 3. The model of strategy formation must be kept simple and informal 4. Strategies should be unique: the best ones result from a process of creative design. 5. Strategies must come out of the design process fully developed. 6. The strategies should be made explicit and, if possible, articulated, which means they have to be kept simple. 7. Finally, once these unique, full –blown, explicit, and simple strategies are fully formulated, they must then be implemented."(Mintzberg,1998,Rise And fall) In theory it is easy to say these are premises of strategy design process. But in exercise the existent problems such as environments subjected to more random disturbances: lack of information, unexpected technological breakthroughs, chance wars, replacement of key actors, on one hand and the unpractical procedures on the other hand result something else. The designed strategy becomes something that managers prefer to ignore it in execution. In addition, strategies are the product of a worldview, when the world changes, managers need to share some common view of the new world. Otherwise, decentralized strategic decisions will result in management anarchy. In practice, we see that the process and the result of general approaches to strategic design are not satisfactory. It seems, there are inherent problems in the procedures and assumptions. Here we try to list some of common issues which lead the traditional process of strategic design to be unpractical.

Detachment between thinking and acting, The process of "strategy making" in almost all the models which have all or some of above mentioned assumptions, results something that Henry Mintzberg quoted: "What remain of strategic planning is in fact a set of three independent approaches- a kind of portfolio of planning techniques, if you like. On one side is a numbers game, geared to motivation and control but not to strategy formation. On the other is capital budgeting , a portfolio technique to control capital spending through decision making but not strategy making and in between is a process that seems to be about strategy making , but more in name than in content, for this remains largely unspecified. The black box of strategy creation was never opened, nor were its linkages to the other hierarchies specified."(The Rise and Fall of strategic planning, 1998).

Lack of clarity in strengths and weaknesses: The assessment of strengths and weaknesses in prevailing strategic management planning models is considered as thought independent of action. As we saw in list of assumption, "Strategy formation should be a controlled, conscious process of thought". On the question of how does an organization know its strengths and weaknesses, the model is quite clear: by consideration, assessment, analysis if not judgment, in other words, by a conscious process of thought. Exhaustive lists of potential strengths and weaknesses do exist in general, but it seems this constitute doesn't sufficient specification. Competencies also must be distinctive to time, even to application. Indeed, an organization can't be sure what its competencies are without any applications. There are several difficulties for organizations to identify their strengths and weaknesses factually. In other words how can an organization evaluates its capabilities with some generic organizational frame of reference, which focuses on some abstract ideal or comparison with the past situation. There is the need for an external frame of reference as well, for example, a comparison with other organizations. But because strengths and weaknesses are situational: internal capability can be assessed only with respect to external context- markets, political forces, competitors, and so on. Even with respect to a particular context, organization may not be able to know them generally, in advance. How can we know that a strength is a strength without acting in a specific situation to find out? The researches show assessment of organizational strengths and weaknesses cannot be just a detached logical exercise. It must be above all an empirical one, in which these things are learned by being tested in context. Every strategic change involves some new experience, launching some unknown efforts, and then taking of some new kind of risk. By only a logical appraisal, no organization can, ever be sure in advance whether an established capability will prove to be a strength or a weakness.

Seeking stability in a Dynamic situation, The empirical researches show that the process of strategy designing is a fundamentally dynamic one, because the conditions that drive it are dynamic. One of manager's objectives in this process is the achievement of stability, something that is just opposite of this process. “An effective strategy may relate to situation of stability, but strategy designing generally is associated with times of change. Designing new strategies in time of stability shows that previous needed changes hadn't been understood by the organization, and now it is compromising its shortcoming."(The Rise and Fall of strategic planning, 1998). But when something fundamental has changed in the environment, strategies have to be changed. Serious change in strategy shows shift in the conception of a new world view, based on a continuous change in conditions.

Deterministic Planning, Flexible acting, In the stage of designing the strategy, most of the models become very detailed. And in the execution stage the managers do the strategies very flexible. In fact, the reality of strategy designing would seem to be exactly the opposite. If we want to have the best strategic concepts and ideas to become executed, the process must be changed. Designing should be the open –ended, divergent process (in which imagination can flourish in the creation of new strategies), while implementation should be the closed – ended, convergent one (in which these given strategies are subjected to the constraints of operational activities.

Hard information and "soft" situations! It takes time to "harden" the information. Time is required for trends, events and performance to become recorded as "facts", more time for these facts to be aggregated into reports, even more time if these reports are to be presented on a predetermined schedule. Therefore hard information is essentially historical, it

expresses things had happened in the past. But strategy designing, as described earlier, is an active and dynamic process. As a result, oftentimes managers cannot wait for information to harden. While that is happening, competitors may be running off with valued customers, workers may be staging wildcat strikes, and new technologies may be undermining existing product lines. The world is hardly prepared to wait for information to get itself into a form acceptable to the planners and their systems. It is the need for a permanent strategic information search system in the organizations.

Turbulent environment and rigid planners, Sometimes the environment changes in ways that were not predicted and the strategic designers resist making changes, because sometimes they are not even aware of the external changes or their concepts about the changes are not factual. Other times, it is the implementers who resist following the new formulated changes, perhaps because break with their traditional ways is not feasible, or because it is difficult to recognize a good strategy when it is placed before them. This is the common situation manner to deal with strategic changes. Even the best of intended strategies have to be tailored to all kinds of circumstances unbelievable in their original designing process. In other words, every intended strategy must be interpreted by a great many people facing a wide range of realities. Therefore the organizations have to connect their thinking to their acting.

Supply Oriented, Two important stages of strategy design models: gathering information and assessment (internal and external), are almost completely oriented to competition and supply analysis, as if only these two factors make the market consequences such as demand, shares, etc. Surly the competition consequences of the environment have great impact on the performance, resources and value production. But relying on competition and supply, result in shrinking the market by dividing and re-dividing it between the competitors. Since effective strategy is to expanding the market. When we rely on competition and supply, the profit come from the needs and scant. The unbalancing between some supply chains in a market or, between some subsystems in a unique or compound system is the root of many crises. In short term unbalancing and using of need and scant for to raise the throughput might respond, but in medium and long term this gap will cause crises. Existence of such unbalancing in a system at first make bottleneck and the organization which resolve this bottleneck will win. But this "win" will be followed by a greater loose so will became the root of a cycle of crises in any related chains. Balancing between the consumption and feeding the related parts of production system is really matter for Survival of systems. There are some new factors in the globalize markets which work exactly relevant to this theory. If we study some of the greatest crises between 1970 -2008 we can obviously see this trend. The impact of unbalancing between the different chains of production cycle, in entire life cycle of production, can be measured directly. In recent three decades most of strategic designing models deal with the closest chain to the end customer. This emphasize is just the best for the high speed ROI. But in a strategic view it can't work for long term. The new factors which motivate working in the latest chain of production life cycle (product or service), are ICT, and knowledge based technologies. ICT (Information communication technology), has some very especial features which work very well with economy scale, speed to market, value innovation, ever expanding market etc. Knowledge has its unique characteristics: leakage (it can't be patent long term), least duration (very soon will be expired), renewable (we can use it in production process without decreasing the resource). The first character causes the shortest time for its uniqueness in

market. It can imitate by competitors very soon, so the productions have to be their own rivals in innovation. In other words when an organization delivers a production to the market it must be itself rival and asp will send the next version of that production. The second character causes that we can't store knowledge. The half life of the productions are very short so we will have lots and lots of expired production which their options are not up to date, so it is better to change the production flow as a " Market before1" or "flexible production flow". The third characteristic causes the best option for economy scale production. All of these characteristics impact the market. And today's market has a very flexible demand, needs of customers are not as important as their expectations. In other worlds value innovation can respond the customers not only meeting their need. It means that the market demand is not equal as customer need. This kind of demand is just some thing which competitors are struggling on it. But the greater and best demand is that one which is constructed of consumer values. The market which is cover consumers value is not a constraint one. Its capacity is as much as value innovation capability of organizations. While organizations produce new practical values, there will be market for them.

What is New Approach to Strategic Deployment? Designed future, There is one condition under which uncertainty would seem to fall away and planning results are completely executable. That is when the organization has the power to impose its own plans on its environment. Then it can plan certainly, and implement the plans on schedule. Indeed such an organization need not even worry about forecasting. In such conditions, employees have to work attentively, competitors have to collaborate, it is better to say, there is no real competition. It is rather the situation of a closed system. Unfortunately, perfectly closed systems just do not exist. When the weather changes unpredictably, or the economy suddenly falters, or suppliers and competitors develop ideas of their own, the careful planning can collapse, as it did, in the industrial countries. For example, Ackoff wrote in an article entitled" "Beyond Prediction and Preparation" that "control is obviously more desirable than prediction of and preparation for, what we do not control": the future is largely subject to creation; it can be prepared. The more of it we can create, the less of it we need to forecast or predict" (Journal of management studies, 1983: 62, 61). Eric Hofer, the popular philosopher, put it more succinctly: "the only way to predict the future is to have power over the future." Researches show that merely forecasting or planning can't protect organizations against the turbulent environment. The organizations need to consider all the manageable factors too. Experiences show some natural prerequisites, or precautions are not seen in traditional strategic actions, perhaps the strategists think these are not in strategic levels! For example: o In addition to deciding what the consumer will want, the organization must take every feasible step to see that what it decides to produce is wanted by the consumer at a reasonable price. And it must see that the labor, materials and equipment that it needs will be available at a cost consistent with the price it will receive. And a business manager has to know the real customers, not just their historical buyers. o The subject matter that may be covered in strategic planning includes every type of activity of concern to an enterprise. Among the areas are profits, capital expenditures, organizing, pricing, labor relations, production, marketing, finance, personnel, public relations, advertising, technological capabilities, product improvement, research and development, legal

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The products that are produced full customized through the projects and all their features are defined by customers or clients.

matters, management selection and training, political activities and so on. So the most important insight in strategic design is integrated and systematic approach. o " It is the responsibility of strategic designing to make sure that the entire organization knows very well what its customer's requirements are, what is the direction in which customer needs and customer expectations are changing, how technology is advancing, and how competitions treat their customers." o "Competencies have to be "core" no doubt; they have to be "distinctive" too; and they must also be "in demand". But above all, competencies have to be applicable, and that can never be known for sure without trying. We conclude, therefore, that strengths and weaknesses can be detached neither from each other, nor from specific contexts, or from the actions to which they are directed. Thought must take place in the context of action." (Mintzberg 1998)

Driving forces to New Approach, There are some significant experiences of quick growth which are achieved in non attractive and even declining industries, in which traditional strategic analysis pointed to limited potential for growth. And more notable is that, they didn't win by taking customers from the already shrinking industries. Their customers are coming from new generated demand. They have expanded the existent market by introducing new products and services to new customers. These organizations have created uncontested new market spaces where there is no competition and the customers are actually new groups. The existence market space has some defined and accepted boundaries and the competitive rules are almost the basic ones of the game. Here the win of a company is the loose of its rival. It means that is a zero sum game. Naturally the assumption is that, there are only known industries, markets and existence demand and the increasing supply to feed the constant demand, so win-lose or lose- win would be the basic rule of the game. But increasing supply drive from knowledge based economy which can create new demands and new industries. Creating new industries, expanding demand and using the special features of "knowledge" will change the rules of the game to win- win. In that market space competition will be irrelevant. With supply exceeding demand in more industries, competing for a share of contracting markets, while necessary will not be sufficient to sustain high performance. The reality is that industries are never static. They continuously change and develop. Technologies upgrade, operations improve, markets expand, and players come and go. These changes teach us that we have an enormously capacity to create new industries and re-create existing ones. The service sector is expanded into seven big business sectors ranging from information to health care and social assistance. By aide of electronic communication there will be more re- created services in coming years. There are several driving forces to create new approaches for strategic designing. But some of traditional assumptions are not coordinated to new situation. Accelerated technological advances have substantially improved industrial productivity and have allowed suppliers to produce several new kinds of products and services. The result is that in increasing number of industries, supply exceeds demand and competition can't expand the demand, the most it can do, is re-dividing the existence demand among the competitors. The trend towards globalization compounds the situation. Free tariff and trade and borderless markets became essential parts of new economic order. There are not any trade barriers between nations and regions, as information on products and prices becomes instantly and globally available. One of the most important feature of knowledge, as a resource, is its "non decreasing –out put", so supply is on the rise, but there is no clear evidence of an increase in demand world wide, and statistics even point to decreasing in many developed markets.

New practical Value offering, Instead of using the competition as benchmark, the organizations need to follow a different strategic logic that can increase the demand. As it mentioned before competition changes the segmentation of demand. By win-win approach

managers can focus on creating a leap in value for customers and their organizations, and opening up new market space. This leap in value has to come from practical utility and innovation. It has to be something really new to impact incredibly on demand. This value has to be enough to make the organization stand out in the market. In traditional challenges for creating value the organizations try to improve their offering factors. Surly organizations need improvement but incremental improvement is not sufficient. Increasing demand needs appropriate changes in offering and customers. Because the existence customers want the same offering on less price, and this offering has its market and its rule of competition. The result is that the organizations are face to challenge on something new for new customers in their industry. This challenge has to result something that buyers really accept and pay for it. It doesn't need to be bleeding edge technology. The consumers which are the real root of demand concern on practical utility and suitable price. The organization has to find the best continent of these two consider the cost. Organizations usually believe there is an eternally trade–off, in value- cost, and every value creation is consider as cost increasing. Managers believed that they can either offer greater value to customers at a higher cost or create reasonable value at a lower cost. In traditional strategy designing models, it is necessary to make a choice between differentiation and low cost. Because when the base is competition in differentiation you can offer more expensive. Expanding the existing demand needs to offer something different in low cost. The aspects of differentiation have to be practical (more utility) and the cost has to be reasonable. The existence markets and industries involve in their accepted boundaries which have their competitive rules. Researches show that the most accepted innovations are between two or more industries. Usually these new products or services cover more expectations of consumer in a lower cost. Using these kinds of products need less energy, place, learning, and have more flexibility and compatibility. For example a mobile phone which connect to internet, take photos, etc, a laptop which can project slides, a printer which a photo copy too, a bank which pay al off your bill, a cinema which has parking etc. these products or services are suitable for the new market. They increase utility for customers in their innovation. For example: These days the most useful IT option for organization is a general web base intranet to help more productivity of time and place. This Product can help the organizations to eliminate the constraints of time and place in a credible range. These examples show that the organizations have to search the demand of their market. To understand how their offerings can change. Every product or service has some highlight features which can be compared to its competitors of the market. To add each of these features to the product or service the organization needs resources, and has to invest in. Some of these features are granted in the industry, some are norm and imitation of competitors. By breaking the market boundaries between some industries, the organization can offer the best factors and reduce or eliminate the factors which are not needed, expected or required by the customers. When the organization offers unprecedented utility by searching the customers group, it will have demand because the factors of its product are chosen practically. At the same time by eliminating or reducing some of the most costly elements which don't contain value for the customers, it can dramatically reduce its cost structure. Then offering practical value helps the organization to achieve both differentiation and low cost. Offering new, practical and "pure" value to the customers in expanded market is the greatest opportunity that a company can employ to achieve irrelevant competition. Such a value creating is in the region where a company's actions favorably affect both its cost composition and its value offering to customers. Cost savings are made by eliminating and reducing the factors that have become traditionally norm in an industry but they are not customer value. Customer value is expanded by creating elements the industry has never offered. Over time, costs are reduced further as scale economies starts.

To eliminate the rules of competition, and develop a new market space, the organization must drive costs down while simultaneously raise practical value up for the customers. This is just win- win view, where a leap in value for both the company and its customers is achieved. Because customer value comes from utility and price of the product or service and the company's profit is generated from price and its cost structure, pure and practical value offering is achieved only when the whole system of the company's utility, price, and cost activities is properly aligned. It is this whole – system approach that makes the value offering a sustainable strategy. Value offering strategy integrates the range of a firm's functional and operational activities. This strategic approach is based on the view that the new characteristic of knowledge base economy requires its appropriate structure at different levels. The rules and boundaries which served a competitive economy with constraint supply and demand should change according to globalize knowledge base economy. Practical value offering help the organization to make sure and even raise its situation in the existing market space. This strategic approach involves the entire system of the organization's activities. Practical value offering requires organizations to choose win- win approach and to orient the whole system toward achieving a leap in value for both customers and themselves. Without this integrated approach, changes will become separated from the core of strategy .Practical value offering is based on the view that the rules and constraints of market and industry structure are not obligatory and can be reconstructed through creating new concepts for future of products and services. Globalize and knowledge base organizations should reconstruct their market and industry structure.

Reconstruction the industry structure, In an industry there are some products and services which have some common features. Or there are some substitute or alternative products and services. Total demand for products and services in an industry is a very appropriate changing parameter to manage. Because technological advances, changing life style, accelerated accessibility to fulfill lots of services via E-network and E-communication are impacting the virtual boundaries between industrial sectors. There are a huge number of new demands to be understood and fulfilled in every sector and among the industries. Industries have to redefine themselves in new situations, not to offer a particular product or service but to resolve some new or compound demand. They have to seek appropriate solution instead of traditional products or services. Strategic group in the industries compete on defined factors. These factors usually are the cost centers of the organizations. In other words there are usually some highlighted factors that the products or services of each industry are distinguished and identified by. Some of these factors are not updated, some are not valuable for customer, some others may need being up grade. But all of them are cost for organization. Here is just the point which organization can redefine its cost structure and practical values, because changing situation permanently create new opportunity to create new value, and new threats from none value -added costs. Therefore the organization faces new challenges to conduct its strategic design. Assessing the factors that competition imposes on the organization and increasing, reducing, eliminating or expanding the existing factors and creating new factors which are expected by consumers creates new and practical value for customers and low cost for company. This is just win- win approach to design the strategy.

Assessing Value Investment, Expanding the demand is the essential premise that we can pursue to achieve irrelevant competition. Here we need to see our product or service in the eye of consumer. A product or service before, during and after using has some necessities which cause satisfaction or dissatisfaction. In this process, whole life cycle has to be

considered. Generally the life cycle of a product or service can broken to seven stages running from search, purchase, delivery, use, supplement, maintenance, to disposal. Assessing the competition factors helps the organization to understand its situation in current state and where the competitors are. It means the competing factors are some practical indicators and criteria for assessing the environment. The result shows the similarities and differentiations between competitors. And when these results compare to what customers really want, need and expect, we can redefine our industry. The first assessment shows the situation of known market. Then the new identified industry which is the result of alternative industry's assessment helps the organization to identify the new factors of its product. This allows the organization to understand where the competition is currently investing in; sometimes organizations invest in the factors the industry currently competes on in products, service, and delivery, without knowing the impact of these factors on their customers' satisfaction. Some times the organization doesn't know, what the customers receive from these competitive offerings, don't fulfill their needed values. To assess how is the current situation of your organization in investment and offering value to customers you can use invest value matrix. If there are 7 factors that your industry competes on in products, service, and delivery, you can write them in the first column of a matrix and rank your company in these factors. This ranking shows that how much you invest in them. This column shows the range of factors your industry competes on and you invest in. In the second column write your ranking result and the other columns competitors' ranks. This ranking results show the offering level that customers receive across all these key competing factors. A high score means that a company offers customers more, and hence invests more, in that factor. In the case of price, a higher score indicates a higher price. This matrix which is, the basic component of strategy designing, identifies a company's relative performance across its industry's factors of competition. To create a strategy for expanding the demand the organization must begin reorienting its strategic focus to customers group and to whole industry. To understand the impact of these factors in offering value to customers, you can fill value offering matrix. This matrix is used to evaluate the role of each factor to offering value to customers. You can write the factors in the first column. And in the first row you can write, your customer groups, competitors' customer, customers that have left your market, and customers of alternative industries. Then you can fill the matrix in. Comparing the result of these two matrixes shows the impact of your investments in the factors and the satisfaction of customers. When you have high score in two matrixes for the same factor, it means this factor is critical. In this research you can identify the new factors too. The factors that the customers of alternative industries, or who have abandoned your market desire are the opportunities to offering new values, and constructing new market.

Re- Designing identification factors, To design a new product or service which include more practical value for customer, on a low cost we need to know which factors are value and which are imposed by competition rules. The factors will assess in term of customer value then we change these factors according to the analyzed results. Some factors have to eliminate, some reduce, some raise, some expand and the factors that we identified in searching the whole industry, should be created. The results identify the elements of strategic course of action to achieve differentiation and low cost simultaneously. Voice of the Customer groups will classify the factors which you invest in as follow: 1. The factors which should be eliminated, these factors will be searched through entire related process flow, to clear the extra resources. 2. The factors which should be reduced, these factors will be searched through entire related process flow, to clear the required changes in resources.

3. The factors which should be raised, these factors will be searched through entire related process flow, to clear the required resources. 4. The factors which should be created, these factors will be searched through entire related process flow, to clear the changes and the optimization that the organization need to do. 5. The factors which should be changed, these factors will be searched through entire related process flow, to clear the changes in quality that the organization need to do. In first step you consider eliminating factors which usually are taken for granted even though they no longer have value. Sometimes there is an essential difference between these factors and what customers perceive value, but the organizations by focusing in benchmarking one another, do not act on. Second you determine whether products or services have been over designed in competitive market. Sometimes organizations over serve customers and increase their cost structure for no gain. In third step you will find the compromises your industry forces customers to make and by raising the customers expected factors, eliminate compulsory trade –off. The fourth step encourages you to search alternative industry and discover entirely new sources of value for buyers and to create new demand and shift the strategic producing in the industry. In fact by pursuing the two steps of eliminating and reducing, you understand how to shrink your cost structure in comparison with competitors. Here we have the fifth step, it is not the last one in all industries but when we search to find the factors which have to change it concern lots of changes such as technologic, functional, emotional, etc. to complete this step we can use quality function deployment methodology. Managers rarely systematically set out to eliminate and reduce their investments in factors that an industry competes on. However, by changing investment in different competitive factors, they can gain insight into how to raise customer value and create new demand. Those five steps allow the organization to systematically explore how it can reconstruct customer value elements across alternative industries to offer customers new practical value, while simultaneously keeping the cost structure low. The most important actions are eliminating and creating, which help organizations to create maximum value with existing factors of competition. Eliminating and creating provoke organizations to change the factors of competition, for this reason the existing rules of competition become irrelevant.

The benefits of the matrixes: • They help the organization to change its idea about trade- off between cost and value. The organization understands it can have differentiation and low costs together. • Analyzing the results of the matrixes, give some practical advices to the organizations which focused only on increasing new features to their products or services. Increasing costs and expensive over designed products and services are common troubles in many organizations. • Understanding the factors which are confirmed by these matrixes will help the mangers to produce and offer the most attractive and practical value through their resources. • Completing the matrixes help the organization to precisely analyze the competing factors of the industry, which it invests in, the results make it discover the implicit assumptions it is unconsciously competing on which waste its investment. The matrixes which are described briefly above can be expanded more detailed by using Quality function Deployment (QFD).

Effective Strategy, Effective strategy is one which has fundamental principles while can respond effectively to particular state of the organization. To verify the strategy the organization has to consider the

result of matrixes analysis. Here are some cases which give the required insights to verifying the strategy. • One of the most important specialties of effective strategies is focus, searching the factors in customer's eye help the organization to emphasize this focus. • In traditional approach organizations in an industry to empower their capability in beating the competition, pursue the same procedures, criteria, information and even the same model to design their strategies. Therefore almost all the strategies have the same characteristics. There are great similarities between them. It is natural because there are challenging for the same prey in the same field. In new approach every organization makes its own future, by creating a divergence approach. This procedure results a unique strategy for each organization. • A good strategy must include some new and attractive message for the customers. Some thing that helps the customer to chooses the best of all expectations, instead of trade- off between them. In this approach the strategy will have a good message which offers pure, practical and compound values. The effectiveness and strength of a strategy depends on its compound values for customers and organization as well. This capability in the strategy speaks to the market that the company is on the right track. This strategic approach enables companies to see the future in the present. • When an organization's value matrix shows high levels across all factors, it means that the organization is oversupplying its customers. Investing too much in all competing factors without considering the degree of value to customers, can be a short term tactic not an effective strategy. To offer practical value, the organization must balance the factors according to customers' view. • When a company's value matrix has no rhyme or reason in scores it signals that the company doesn't have an integrated strategy. It seems that its strategy is based on independent sub strategies. This situation may individually continue and keep the business running, but as a whole system the organization can't provide a clear strategic vision. This is often a reflection of an organization with divisional or functional cross purposes.

Reconstructing the Market, There are some specified steps to reconstructing your market and to expand demand. These steps have almost common applicability across industry sectors, and lead organizations into the center of new ideas to reconstructing the market boundaries. Using this approach requires special vision and foresight about the impact of the trends to the future of your industry and its upstream and downstream chains, and alternative industries. All are based on analyzing familiar data from a new perspective.

Alternative industries, When an organization wants to find its competitors, usually focus on the companies in its industry. But, our competitors are not only other firms in our industry, the companies in other industries which produce alternative and substitute products or services, are our competitors too. When customers are making purchase decision, often unconsciously weigh alternatives. In order to expand the market we need to attract the customers of alternative industries. There are virtual walls between industries but researches show that the space between alternative industries provide opportunities for offering new values to new customers. To expand the market and attract new customers, you have to know your alternative industries and the reason of their customers to trade. By focusing on the key factors that lead them to trade across alternative industries and eliminating or reducing everything else, you can create a new market space. Some of the factors which are required by customers give you new insights to redesign your products or services by transforming your production process vertical or horizontal in your industry and alternative industries. These factors usually concern

the supplementary products or services which raise the value of your offering in features like, optimization, saving energy, simplicity of use, reducing risk, user friendliness, increasing the productivity of user, etc. we will describe this kind of improvement next.

Strategic Groups, The strong groups in an industry have the greatest competition with each other. They usually improve their competitive situation as a strategic action. But we know customers' decisions are according to receiving more value in their purchases. The strategic action is to understand which factors determine customers' decisions to trade up or down from one group to another. You have to build your new market on the distinctive strengths of strategic groups in your industry and alternative industries. The factors which have the high scores in customer view are ones you have to rely on while eliminating and reducing everything else. You need to identify the strengths of strategic groups in your industry and the factors which attract customers to trade up for one group, or trade down for the other one. The chain of customers, To make some strong new demand you need to redefine the customers' chain, who are directly or indirectly involved in the buying decision. The purchasers who directly pay you for the product or service may differ from the actual users of your products. The practical values which the users make their purchase decisions on them are the critical reasons for your success. In some cases there are important influencers in the industry such as retailers, doctors, teachers, consultants etc. Although these three groups (users, buyers, and influencers) may overlap, but they often differ. There is a very important point here; these tree groups frequently hold different definitions of value. Organizations market researches must identify the contradiction between groups' values. Sometimes there is a strong economic rationale to focus on one or more groups. But the technological advances and new situations require revise the industry practices permanently. Industries usually have potential opportunities to create new market, but organizations to find these potential opportunities need to abandon conventional definitions of traditional target customer group. With new insight of trend impacts on their industry and alternative industries, organizations must identify, who can and should be the target customer, through this approach organizations can often see fundamentally new ways to unlock value. You need to assess the traditional chain of customers in your industry, to find the appropriate customer group, and focus on. When you shift your customer group of your industry, you must design your idea to unlock new value. Every customer group has its expectation and its capacity, an integrated system which the organization design as its new strategy will consider the best component of customer expectations and capacities to achieve differentiation and low cast together. In choosing the target customer resources, process flow, and new practical value have important roles.

Redesigning, Product and Service, New practical values are often hidden in complementary products and services. The key is to define the total solution that customers seek when they choose a product or service. A simple way to do so is to think about what happens before, during, and after your product is used. This approach can be taken when the organization wants to test its new designed product or service, as well. In the process of reconstructing the industry and market, we need to test our product or service in use. These days in complicated social system, almost all the products and services need supplementary service or options. Babysitting and parking the car are needed before people can go to the movies. Operating and application software are used along with computer hardware. In the airline industry, ground transportation is used after the flight but is clearly part of what the customer needs to travel from one place to another.

Organizations should clarify the context in which their product or service is used, using every product or service has some trouble points. The condition which products and services can attract their no customers (who need this product but because of trouble points decide to not buy it) is to eliminate these trouble points. By using the third matrix of "New Approach to Strategic Design and Deploy" the organizations can identify the trouble points and the satisfactory points of their product or service. This matrix help the organizations through auditing what happens before, during and after using their product, identify the trouble points. This matrix is some how similar to "Failure Mode and Effect Analysis" (FMEA) which search the failure in entire life cycle of product or service. But here the organization tends to identify the positive aspects of its product or service as utilities while finding out the trouble points. These trouble points are the cause of changing mind of non customers. Eliminating these blocks will create new values. Then the organization in an integrated approach with reconstructing the industry, market and customer groups, will finalize its product or service design by eliminating these trouble points through a complementary product or service offering.

Considering the impacts of trends, External trends affect the business over time and industries tend to identify and mange these trends. Rapid expanded use of internet and the globalize economy impact almost all the industries, in one, two or more stages of their products or services life cycle. Being conscious of these trends and considering their impacts in correct perspective lead us to create new opportunities. Some global movement such as movement toward protecting the environment, or some changes which have universal impact, global warming, energy crisis and food crises are the root and cause of enormous evolution in the future. Huge and some times destroyable impacts of these trends can't be resolved by usual approaches. Beating these crises involve several level of authorities and finally cause huge fundamental changes in major regulatory changes, recourses, production process, and finally change in demand and supply. Being passive, reactive or adapting incrementally to these kinds of events, cause irreparable loss. Most organizations adapt reactively the external changes. Whether it's the emergence of high technologies or global changes, managers prefer emphasize on the future of trend itself. They want to know how they can adopt this trend. It means that they are subjected to changes and the changes will shape their future. But new approach to strategic design and deploy suggest a proactive approach to trends. To reach key insights we should understand how the trend will change value to customer and impact the organization's business model. The value an organization delivers today in comparison with one it has to deliver tomorrow are not the same. Organizations by finding the difference and identifying the impact of trends can actively shape their future. It is not something about predicting the future, something that is inherently impossible. Rather we're talking about finding insight in trends that are observable today. There are some critical principles to assessing trends across time. To form the basis of an effective strategy, the organizations have to consider the trends which are decisive to their business, these trends must be irreversible, and they must have a clear trajectory. Many trends can be seen at any time, for example energy crisis, global warming, emerging a sort of high technology or a change in regulatory of social environments. But usually only one or two will have a decisive impact in any particular business. When the organization identified a trend of this nature, its strategist group has to look across time and predict the market situation according to logical conclusion of the trend. Organizations should search the trends which have a high probability of impacting their industry, the trends which are irreversible, and evolving in a clear trajectory.

Evaluating product utility, As before mentioned, being out of competitive market needs to create new demand. Creating new demand needs to create new customer, creating new customer needs to understand potential customers, (ones who have unanswered value, ones who are customer of alternative industries, and ones who are waiting for new values). To create attractive values the organizations have to assess the utility of their product for these groups of customers. The need to assess the customer utility of organization's offering may seem self evident. But organizations rarely can deliver exceptional value to customers because they think novelty of their product or service, can compromise value. This obsession will occur especially if new technology plays a part in the product. To be assured about the practical value of your product, you should test customer utility to understand whether organization's offering unlock exceptional utility. Is there a strong reason for customer to take purchase decision? When we start to measure customer (consumer) satisfaction of delivered value, we have to consider entire experience cycle of the customer according to utility. In other words, before purchase, usually there is a search time as the first act of customer; purchase, use, supplements, maintenance and disposal are the next stages of experience cycle. Each stage includes some specific experience of utility which customer can evaluate it. We can assess the utility experience of each stage by asking a set of questions of customers. This assessment shows the utility of each stage of experience. The result of this assessment helps the organizations to create exceptional utility for customers. The questions can be about risk, enjoyment, entertaining, learning, environment friendliness, and every practical feature which is concern. It is not easy to design generic matrix for all products or services. It is evidence that a product is expected to help the user do things faster or better, or has to be easy to obtain, use or dispose of. Designing a specific matrix to evaluate the customer experience for a particular product or service has to do by its producer. Here you can see a matrix which is an adaptation of "The Buyer Utility Map" from "Blue Ocean strategy"(W.Chan Kim and Renee Mauborgne, 2005), in Kim's Matrix the aim is finding "pain points" of 6 stages by asking certain questions of buyers. In that matrix the utilities are defined as customer productivity, Simplicity, convenience, risk, fun and image, environment friendliness. But in New Approach to Strategic Deployment, It is the customer who defines the utilities. Therefore to design this matrix we need a profound interviews of producers and customers to find the most important utilities, either the fulfilled ones or others which are not responded yet. Customer's experience cycle of product utility

Utilities

search

purchase

delivery

use

Supplement

maintenance

disposal

User Friendly safety Energy consuming Infrastructure productivity Environment friendliness

Every product or service has some blocks to utility, across its entire experience cycle which called trouble points. These trouble points present the greatest opportunity to creating exceptional utility for customers and potential customers. Through this assessment organizations identify the opportunities to creating exceptional utilities. By analyzing the

customers' answers you can identify the new features of your products to remove the greatest blocks to utility. These are the value which sustainable your market.

Conclusion, Pursuing new approach results, in identification of the new industry, market, customer group, product or service, the factors to invest in and the greatest block of utility. The organization has its criteria and indicators which are identified according to the impact of most important environment trends. As the process showed, every part of identification is aligned to each other. As mentioned in assessing the competing factors to eliminate, raise, reduce, create or change them, every process which is related to the assessed factors will review. In fact this activity starts execution of strategic deployment. The processes which should change to realize the confirmed factors of product or service will be separated. Following these processes shows the resources which are involved to produce these factors. Now the executors have to define and map the new processes according to new factors. These processes will map precisely with every detailed inputs which is required. When required inputs of strategic processes become clear, strategic action plan can be arranged to launch the implementation.

References: 1-"The Rise and fall of Strategic Planning", (Henry Mintzberg 1998) 2- "Beyond Prediction and Preparation"(Journal of management studies, 1983: 62, 61). 3- "Blue Ocean strategy"(W.Chan Kim and Renee Mauborgne, 2005) 4- Consulting experiences in more than 15 organizations.