The evolution of strategy happened with the formulation of a static vision guided by a mission, coupled with management objectives to fulfil the set path envisioned. Dynamic Strategy was used by firms like General Electric and Berkshire Hathaway – firms with the resources and capability to chart their own course into a foreseeable future. But Static Strategy was a thing of the past as markets evolved and consolidated.
This paved the way for Dynamic strategy. Dynamic strategy understood the changing life cycles of companies and products and developed a new way of tackling the problems of the business world: to continuously innovate and keep rethinking the positioning to target the desired customer. Dynamic Strategy was and is being used by Corporate Giants like Coca-Cola in the worldwide Cola war against Pepsi. P&G which derived its product lines by imitating the product line of Dutch Super-giant - Unilever, still plays by the rules of Dynamic Strategy.
Fast Forwarding to the new millennium of the 2000s, markets have evolved much further. But new markets have flourished. Thinkers and Innovation-Driven Technologists have found new Blue Oceans to spread their wings rather than the bloody Red Oceans dominated by Behemoths. Consider this – Google entered the Internet Market in 2004, in stark competition to Yahoo whose algorithm was apparently better than that of Google, But Google liked to keep it Simple. Keeping it simple and dominating the Internet Market was its Strategy, which reaped huge dividends with it being the pioneer of Digital Marketing, and Yahoo-now invisible.
Agile Strategy means to strategize the moves and get it to market in a very short period of time, providing a timely blow to the competitors and also, in some cases having first mover advantage. This was used by Indigo Airlines as it penetrated with agility and currently owns a 35% market share in the wafer-thin Airline Industry – leagues ahead of Kalanidhi Maran backed –Spicejet and Jet Airways. It also capitalised on off-ticket earnings, such as providing extra baggage at a nominal fare which contributed 5% to its bottom-line.
But the clear picture of both Agile and Dynamic Strategies can be seen in the Aggregator Business. Uber, the Worldwide Market Leader used Agile Marketing and quick acquisitions to enter the markets. Such was the thirst for market share that it had a merger with DIDI – a competitor in China to Uber, just to have its fair share in Chinese Market. Well, as all deals don’t thrive – this merger went kaput.
Amazon guided by the visionary Jeff Bezos, is betting big on the Indian Market and has unleashed a war chest of 1800cr, to be the leader in the E-Commerce Industry – which is already involved in a bloody battle between Flipkart & Snapdeal. These Companies spend 20% of their budget on marketing expenditure while the average spending in any industry is 2-4%. Amazon –banking big on the Drones, and the Smart Marketplace AmazonGo, are pumping in cartloads of cash to beat the competitive Flipkart and Snapdeal.
Agile and Dynamic Strategies have been used by unconventional Players too. Patanjali – backed by Balakrishna with a 97% hold and marketed by Baba Ramdev, managed to churn 5000Cr in sales in just 2 years of existence, higher than Hindustan Unilever due to its strategy to catapult the Ayurvedic and Yoga Masses into its customer base, and churn out great dividends. Patanjali has also gained widespread acclaim due to its organic and green products, going with the present trends and reaping the benefits of its green ideology with favourable treatment from the Government in Land Deals.
The current price wars between Jio, Airtel and other telecom players is also a case of dynamic and aggressive branding to swiftly sweep customers and gain market share. Jio managed to shake the telecom industry with its freebies and gained 100 million customers in 170 days, a number unheard of. All other players are also steadily making agile strategies. Airtel, plans to retain its customers by planning a boomerang with better price plans. Vodafone and Idea reacted by planning a merger to form a giant with 57% market share – the merger is still being contemplated.
Oil Industry, has also seen sudden and swift movements from the Indian Government to stay relevant and competitive in the Global Market. The proposed merger of HP, BP, ONGC and IOCL to form a future Oil industry behemoth is a calculative move. This is because most of the global giants such an Exxon Mobil, Chevron, BP and Royal Dutch Shell are vertically integrated to reduce marketing and distribution costs. This acted as a catalyst for the proposed merger.
It’s clear from the global trends that Agile Dynamic Strategy has created a new Frontier to lease a competitive advantage to the warring firms. It guides them to continually evolve and be attentive to the developments in the markets.
It has given firms that are agile the superiority over firms that are still static. The future holds Strategy that are data driven. This data will further push the limits of competition and give way to the formidable weapon – Digital, Agile and Dynamic Strategy.
Firms should not be sitting ducks to the rapid shifts that take place at a mind-boggling rate in the market place. Firms can no longer afford to be static and redundant while the World moved forward. Firms should be sharks waiting to prey in the hyper-competitive environment with strategies devised prior to the blow horns being blown.
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About the Author:
Chandan Arunachalam is a student of IIM Ranchi, from the PGDM batch of 2016-18