
06/22/2004

06/01/2004
Win the battle before it begins.
The focus of this detailed and dense 11-page paper is spot on: The proper center of your business universe should be the customer, not your competitors. Mitreanu does not deny the importance of knowing how to tackle the competition, but clearly believes that an overemphasis on this aspect of business theory has damaged the effectiveness of business strategies. In claiming that a customer-centric approach to strategy is new, Mitreanu oversteps the reality of the literature. Plenty has been published with an emphasis on the customer, including the “co-opetition” literature. However, the many thought-provoking elements packed into this paper make it a valuable addition to the literature.
As Mitreanu sees it, the breakdown of standard approaches to strategy (perhaps best exemplified by Porter’s five forces framework) is rooted in an accelerated free circulation of information along with a dissolving of industry boundaries. The only effective response, he argues, is to build strategy around the customer, seeing all offerings as solutions to customer issues and dynamically positioning around those issues rather than around the competition. Strategists can begin this process by grasping the “hierarchical issues tree”. This is a dynamic tree that incorporates three problem solving stages: Identifying status issues, designing solutions, and acquiring solutions. The primary objective of the first stage is issue simplification. The second stage begins by identifying an ideal solution, then moving towards the best solution. The third stage aims to match issues with real-world solutions.
Mitreanu goes on to look at the pressures in a transaction, with the resulting information-based temporary equilibrium being referred to as the “Transaction Level”. The strategist can then move on to mapping a solution. The paper suggests that, depending on the way an organization operates, value generated by a solution may affect the customer at the strategy level, the organization level, or the process level. Mitreanu then delves into the details of the dynamics of solutions as affected by “the commoditization force” and “the innovation force”. Building on his account of the dynamics of an offering, Mitreanu next redefines business strategy as a hierarchy of primary components: Customer Issues Centricity; Solutions Portfolio Alignment; and Solutions Interrelationship.
The latter parts of this paper examine strategic advantage sustainability, outlining three major strategic options for adding new solutions to a company’s portfolio, then reinforce the customer-centered strategic perspective with a healthy reminder of the critical importance of execution. The paper concludes by pointing out four advantages of this approach to strategy, including its utility in explaining broader economic issues such as offshoring and the strategic importance of IT.