Interoperability
Industry
Enterprise
Competitive Strategy
Application
Requirements
Component
Specifications
Today’s Agenda
• Competitive Strategy
– What is Competitive Advantage?
– What is Value?
– What are the Generic Competitive
Strategies?
• Sources of Competitive
Advantage
– Where to look for opportunities for
Competitive Advantage?
Industry
Enterprise
Competitive Strategy
Application
Requirements
Component
• Business Execution Platform
– How to build a platform to
transform Competitive Strategies
into Architecture?
Specifications
Organisation's plan to differentiate it from its rivals.
COMPETITIVE STRATEGY
Strategy
War
Government
Business
Chess
Personal Life
Sports
Competition
And so on...
Strategy is a plan that aims to
give the enterprise a
competitive advantage over
rivals.
Competitive Strategy
At the heart of the Failure or Success of organisations
Is the search for a favourable competitive position in an industry, the
fundamental arena in which competition occurs.
Competitive strategy aims to establish a profitable and sustainable
position against the forces that determine industry competition.
Competitive Strategy is driven by
Industry Attractiveness (shaped by 5 forces)
Relative Competitive Position in the industry
Value
The amount of buyers that we are willing to pay
for what a companies products and/or
services.
Measured by total revenue.
Profitable if the value exceeds the costs involved
creating and/or delivering the
product/service.
Competitive Strategy
Generic Competitive Strategies to achieve Competitive
Advantage
– Cost Leadership
– Differentiation
– Focus (Cost Focus, Differentiation Focus)
Creating Value for buyers the exceeds the cost of doing so
is the principal aim of any generic strategy.
Implementation of any strategy is as, if not more,
important as the strategy itself!
Identifying Opportunities for Value Creation
SOURCES OF COMPETITIVE ADVANTAGE
IN BUSINESS ARCHITECTURE
Opportunities for Value Creation
We need a holistic, abstract view of the business
We need an approach to analyse business by its
functions – What it does, then how it does it...
We need to understand the decomposition of
the organisation and what it does to spot
opportunities for Competitive Advantage
Relative Change
Durability
Abstraction
Organisational Structures...
Process Models...
Infrastructure Diagrams...
Evolution of the Enterprise shaped by Competitive Strategy
Time
B. Customer-facing
Channel Partners
A. Customer
1. Develop
Products/
Services
C.
Suppliers
2. Generate
Demand
5. Collaborate
3. Deliver
Products/
Services
E. Financial Providers
D.
Logistics
Providers
4. Plan and
Manage
the
Enterprise
F. Infrastructure and
Compliance
Design
Product/Service
Sales
Provide Service
Property and
Advisory
Planning
Collaboration
Refine Existing
Product/Service
Marketing
Procurement
Project
Management
Strategic
Collaboration
Develop New
Product/Service
Channel
Management
Produce Product
Financial
Management
Operational
Collaboration
Product/Service
Management
Customers
Business
Intelligence
Human
Resources
Logistics
Advanced
Planning
Design
Product/Service
Sales
Provide Service
Property and
Advisory
Planning
Collaboration
Refine Existing
Product/Service
Marketing
Procurement
Project
Management
Strategic
Collaboration
Develop New
Product/Service
Channel
Management
Produce Product
Financial
Management
Operational
Collaboration
Product/Service
Management
Customers
Business
Intelligence
Human
Resources
Logistics
Advanced
Planning
Order
Order Fulfilment
Management
Transportation
Sales
Management
Inventory
Point of Sales
Management
Business Architecture decomposes organisation’s
operational model into abstract business
functions called capabilities;
– Capabilities are Abstract, Stable and have Clear
Boundaries
Warehouse
Product Pricing
Management
Prospect
Qualification
Your customers (buyers) and
suppliers have capabilities also.
Business Architectures are linked
through connections between
capabilities across organisations.
B. Customer-facing
Channel Partners
A. Customer
B. Customer-facing
Channel Partners
A. Customer
And your rivals has theirs too!
“How others are doing it?”
B. Customer-facing
Channel Partners
A. Customer
1. Develop
Products/
Services
C.
Suppliers
E. Financial Providers
C.
Suppliers
2. Generate
Demand
5. Collaborate
3. Deliver
Products/
Services
E. Financial Providers
1. Develop
Products/
Services
D.
Logistics
Providers
C.
Suppliers
4. Plan and
Manage
the
Enterprise
B. Customer-facing
Channel Partners
A. Customer
D.
Logistics
Providers
1. Develop
Products/
Services
4. Plan and
Manage
the
Enterprise
F. Infrastructure and
Compliance
C.
Suppliers
1. Develop
Products/
Services
C.
Suppliers
5. Collaborate
D.
Logistics
Providers
B. Customer-facing
Channel Partners
A. Customer
5. Collaborate
3. Deliver
Products/
Services
E. Financial Providers
3. Deliver
Products/
Services
2. Generate
Demand
D.
Logistics
Providers
4. Plan and
Manage
the
Enterprise
F. Infrastructure and
Compliance
E. Financial Providers
E. Financial Providers
2. Generate
Demand
4. Plan and
Manage
the
Enterprise
F. Infrastructure and
Compliance
2. Generate
Demand
5. Collaborate
3. Deliver
Products/
Services
F. Infrastructure and
Compliance
2. Generate
Demand
5. Collaborate
3. Deliver
Products/
Services
1. Develop
Products/
Services
D.
Logistics
Providers
4. Plan and
Manage
the
Enterprise
F. Infrastructure and
Compliance
Most companies in the same industry do
the same things (WHAT); the
differentiation is in HOW they do things.
Competitive Strategy shapes the Evolution
of the Enterprise to achieve and sustain
Competitive Advantage.
– It also alters WHAT through (i.e. Acquisition
and/or Organic Growth)
Law
Retail
Manufacturing
Banking
Utility
Health
Cost Advantage
A company has a cost advantage if its
cumulative cost of performing all value
capabilities is lower than competitors’ costs.
Capability Model provides the basic tool for cost
analysis
Design
Product/Service
Sales
Provide Service
Property and
Advisory
Planning
Collaboration
Refine Existing
Product/Service
Marketing
Procurement
Project
Management
Strategic
Collaboration
Develop New
Product/Service
Channel
Management
Produce Product
Financial
Management
Operational
Collaboration
Product/Service
Management
Customers
Business
Intelligence
Human
Resources
Logistics
Advanced
Planning
Differentiation
A company differentiates itself from its competitors if it
can be unique at something that is valuable to buyers.
Not all uniqueness leads to differentiation
Differentiation has a cost associated with it too!!
Differentiation is not always about the product but
opportunities for uniqueness and better performance
can be found in Business Architecture
Design
Product/Service
Sales
Provide Service
Property and
Advisory
Planning
Collaboration
Refine Existing
Product/Service
Marketing
Procurement
Project
Management
Strategic
Collaboration
Develop New
Product/Service
Channel
Management
Produce Product
Financial
Management
Operational
Collaboration
Product/Service
Management
Customers
Business
Intelligence
Human
Resources
Logistics
Advanced
Planning
Technology as Competitive Advantage
Technology can alter industry structure and level the playing field.
Technology can be Competitive Advantage if it enhances Cost Advantage or
Differentiation
Think technology in
Products/Services
Capabilities and connection between spanning customers and suppliers...
Innovation is the fundamental approach to Technology Strategy
Architecture as needs to marry right technologies to Competitive Strategy to achieve
or sustain Competitive Advantage
Think about S+S, Cloud... How can you leverage these as Competitive Advantage?
Which technologies do your rivals invest and use?
Foundation for Delivering Strategic Initiatives
EFFECTIVE BUSINESS EXECUTION
PLATFORM
Competitive Strategy
Technology/IT Strategy
Limits and Opportunities
for Competitive Advantage
IT Governance
Enterprise Architecture
Architecture Strategy
Architecting Process
Represents TO BE IT Architecture
Reference
Architecture
Sources for Competitive Advantage
Change driven through
Strategic Initiatives
Business Architecture
Capabilities
Architecture
Governance
People
Process
IT
IT Architecture
Transformation
Architecture Delivery
Data
Infrastructure
Hardware, Network, Storage
Security
Delivery Model
Operations
Application
Understand your
organisation's
Competitive Strategy
– Technology/IT Strategy
must be part of the
Competitive Strategy
Competitive Strategy
Technology/IT Strategy
IT Governance
Enterprise Architecture
Architecture Strategy
Architecting Process
Reference
Architecture
Competitive Strategy
B. Customer-facing
Channel Partners
A. Customer
IS/IT Strategy
1. Develop
Products/
Services
Limits and Opportunities
for Competitive Advantage
C.
Suppliers
2. Generate
Demand
D.
Logistics
Providers
5. Collaborate
3. Deliver
Products/
Services
4. Plan and
Manage
the
Enterprise
F. Infrastructure and
Compliance
E. Financial Providers
Enterprise Architecture
Architecture Strategy
Architecting Process
Reference
Architecture
Design
Product/Service
Sales
Provide Service
Property and
Advisory
Planning
Collaboration
Refine Existing
Product/Service
Marketing
Procurement
Project
Management
Strategic
Collaboration
Develop New
Product/Service
Channel
Management
Produce Product
Financial
Management
Operational
Collaboration
Customers
Business
Intelligence
Human
Resources
Product/Service
Management
Logistics
Advanced
Planning
Identify Opportunities for Competitive
Advantage in your Business
Architecture;
– Cost Advantage
– Differentiations
Technology can be a Competitive Advantage
Inform Competitive Strategy about the Limits
and Opportunities
Sources for Competitive Advantage
Business Architecture
Capabilities
People
Process
IT
Develop an Architecture Strategy
to reflect organisation’s IS/IT
Strategy
– Strategy sets the context
– Reference Architecture helps
you keep an eye on the goal
– Architecting Process helps you
get there
– Architecture Delivery makes it
real
Competitive Strategy
IS/IT Strategy
Enterprise Architecture
Architecture Strategy
Architecting Process
Reference
Architecture
Represents TO BE IT Architecture
Change driven through
Strategic Initiatives
Architecture
Governance
IT Architecture
Architecture Delivery
Data
Infrastructure
Hardware, Network, Storage
Security
Delivery Model
Operations
Application
Architecture as a Business Differentiator?
SUMMARY
Competitive Strategy
Technology/IT Strategy
Understanding of Competitive Strategy is key
- Cost Leadership, Differentiation and Focus
Enterprise Architecture
Architecture Strategy
Architecting Process
Sources for Competitive Advantage
Change driven through
Strategic Initiatives
Business Architecture
Capabilities
Architecture
Governance
People
Process
IT
IT Architecture
Operations
Application
Delivery Model
Transformation
Data
Infrastructure
Architecture Delivery
Hardware, Network, Storage
Focus on Business Architecture
- Limits and Opportunities for Competitive Advantage
- Competitive Strategy shapes How you do things...
- People, Process and Technology
- Capability Model (What you do)
- Technology
Build and action on the platform
- Project by project, initiative by initiative...
Represents TO BE IT Architecture
Reference
Architecture
B. Customer-facing
Channel Partners
A. Customer
1. Develop
Products/
Services
C.
Suppliers
2. Generate
Demand
D.
Logistics
Providers
5. Collaborate
3. Deliver
Products/
Services
4. Plan and
Manage
the
Enterprise
F. Infrastructure and
Compliance
E. Financial Providers
Design
Product/Service
Sales
Provide Service
Property and
Advisory
Planning
Collaboration
Refine Existing
Product/Service
Marketing
Procurement
Project
Management
Strategic
Collaboration
Develop New
Product/Service
Channel
Management
Produce Product
Financial
Management
Operational
Collaboration
Product/Service
Management
Customers
Business
Intelligence
Human
Resources
Logistics
Advanced
Planning
Security
Focus on Enterprise Architecture
- Architecture Strategy (Plan to get to...)
- Reference Architecture (Where to get to...)
- Architecture Process (How to get to...)
- Architecture Delivery (Execution of the Plan)
Limits and Opportunities
for Competitive Advantage
IT Governance
Q&A
Thank you...
Please email me @ hatay.tuna@microsoft.com
for more...
And enjoy the Drinks Reception  and rest of
the event!