Strategic Management: Three Circles Analysis Video Clip from MGT: 6190: Strategic Management Capstone
Here’s Part 3 of our 3 part Strategic Management series, which focuses on the Three Circles Analysis. Last week was all about SWOT (Strengths, Weaknesses, Opportunities and Threats). This analysis takes a different business and strategically approach, though.
In the Three Circles Analysis, which fundamentally centers around what your target market (customers and prospects) want, what you have and what your competitors have. It’s all about getting down to what separates you from the competition, you’re ‘unique value proposition’. Once you analyze what resources are present and what ones are available and look at that through the customer lens, you can determine what your next move should be.
The course is taught by Sherri Petro, M.B.A. Ms. Petro is the President of VPI Strategies, a San Diego based marketing consulting firm, where she focuses on research, strategy and communications. Her mission is to assist organizations in becoming more sustainable by breaking down barriers, creating understanding and making connections. Ms. Petro is a nationally renowned expert on generational motivation and its impacts in the workplace. Ms. Petro is an Adjunct Professor at California Miramar University and a 2010 Outstanding Professor of the Year award recipient.
Transcript of the Lesson
There’s also the Three Circles Analysis. And this is comparing the customer’s needs to what you have to offer and comparing it to competitive offerings. Simply, it’s what they need, we have and the other guys have.
It’s a matching model. You can see where you have points of difference, where you have things in common, and where the points of difference are for your competitors to keep into consideration when you develop that strategy.
Another internal analysis technique is a resource-based view. It’s all about what makes us unique. When you hear about organizations talking,“what is our unique selling proposition?” – something we use in marketing more than anything. It’s a method of analyzing and identifying the strategic advantages that we have based on tangibles and intangibles. The premise is that there’s a bundle of resources that each organization has and we need to take it apart and understand how the customer views it.
There’s three basic resources. The stuff you see on the balance sheet, tangible assets. The intangibles, one of the most, the intangible that is getting the most play right now is about brand management, another is company reputation – the morale of the company, the technical knowledge – the things that aren’t necessarily on the balance sheet but hold a lot of value. So the other of the three basic resources is organizational capabilities- what are the skills of the organization?Tangibles, intangibles, organizational capabilities.
That’s great, but what actually makes a resource valuable? There’s four guidelines. Is it critical? Is it scarce? Does it help you contribute to profitability? And is it durable? Or in our world we’re starting to say sustainable. Is your resource critical to fulfilling the customer’s needs? Is it scarce or can someone come in and swoop it away? Does it contribute to profitability? Does it contribute to sustainability?
Let’s talk about scarcity for a minute. What does it mean? Is it in short supply? Somebody might be able to substitute or imitate it? But there are a few ways that you can create something that cannot be imitated. It’s called isolating mechanisms. Physically unique resources.“Path-dependent” resources. This is where another firm would have to take a lot of things in to try to make it happen. Then you got casual ambiguity – it’s like the competitor going,“I can’t figure out what’s in this mystery box”. Perhaps we’re talking about the Coca-Cola secret formula there. Then you got economic deterrent – it’s just going to cost too much money to go into that market.
Video Transcription by GMR Transcription