Wheel of Strategy
Wheel of Strategy
Abstract
This paper presents the Strategy Wheel as an integrating framework for teaching strategic
marketing. The Strategy Wheel combines concepts, perspectives and theories from
marketing, innovation and strategic management into a single 8-step heuristic for teaching
(and practising) strategy development. Based on the action-learning model from
organizational behaviour, this approach emphasises ‘learning by doing’. The Strategy Wheel
was originally designed for a three-day executive education course for a major business
advisory practice in Europe (PricewaterhouseCoopers), but has more recently been adapted
for inclusion in a post graduate level subject on strategic innovation. The framework has had
great success in both environments.
Introduction
Great strategies, like great works of art, or great scientific discoveries, call for technical
mastery in the working out, but originate in insights that are beyond the realm of
conscious analysis. (Kenechi Ohmae)
This paper presents the Strategy Wheel as an integrating framework for teaching strategic
marketing. Computer simulations, the most well known being Markstrat (StratX, 1999), have
so far been the dominant experiential learning tool in this area. However, these simulations
tend to be resource optimizing tasks, and are firmly rooted in the neo-classical (Arndt, 1983),
microeconomic, or “marketing mix” (Gronroos, 1994) tradition of marketing that has its
origins in the mid-1900s. More recently, the practice of strategy has been influenced by a call
for greater innovation and creativity, as well as approaches that are ‘market leading’.
Influential writers in this new strategic innovation movement include Hamel and Prahalad,
(1994), and Hamel (2000).
The Strategy Wheel framework was developed to address three issues: i) the need to reflect a
more innovative approach to strategic thinking, that goes beyond computer friendly
optimization tasks; ii) the diversity of concepts, tools and techniques within the new strategy
paradigm; and iii) the difficulty of helping students understand and experience this kind of
strategy development process. The Strategy Wheel was originally developed as the basis of a
3-day executive program for partners in a leading business advisory firm, but has since been
adapted for post-graduate teaching.
In the next two sections the theoretical and pedagogical foundations of the Strategy Wheel are
presented. An overview of the framework itself is then provided with a description of the
eight steps that make up the heuristic. How best to use the Strategy Wheel in the classroom is
then discussed along with the results so far of using the framework.
Key writers that fall under the strategic innovation school include Hamel and Prahalad,
(1994), and Hamel (2000). While most of these scholars emanate from the traditional
corporate strategy domain, their work is highly customer centric, addresses issues related to
segmentation and positioning, and includes discussions on various aspects of the marketing
mix. In the wider context of the discipline, these ideas have contributed to the blurring of
boundaries between corporate and marketing strategy in both academic and managerial
contexts.
The theoretical foundations underpinning this new approach to strategy come from two
sources. The first is the resource-based theory of the firm, with its origins in the writing of
Edith Penrose (1959), and more recently Barney (1991). This view argues that firms should
build and leverage their internal resource base to generate competitive advantage. This based
on the assumption that firm related factors explain performance more so than industry factors
(as the traditional industrial organisation view advocates). Evidence for this position can be
found in the work of Rumelt (1991).
The second source is the work of the economist Schumpeter (1949, 1950), and his concept of
‘creative destruction’. Schumpeter suggested that, “In capitalist reality...it is…competition
from the new commodity, the new technology, the new source of supply, the new type of
organization (the largest-scale unit of control, for instance) – competition which commands a
decisive cost or quality advantage and which strikes not at the margins or profits and the
outputs of the existing firms but at their very foundations and their very lives.” (1950, p.84-
85). Hamel and Prahalad in the 1990s picked up this theme and called for strategy to be more
about “reshaping industries” and “breaking rules”, than competing within existing industry
paradigms and being “rule-takers”.
Thus, the core elements of the strategic innovation approach can be summarized as follows:
• The firm is seen as a pool of resources that are leveraged via a particular business
model
• Orthodoxy should be challenged and industries ‘disrupted’
• Firms should tap into latent customer needs and lead consumers rather than follow
them
• Radical, discontinuous change creates more value than incremental improvement
• Strategy focuses on shaping the future
A number of concepts, tools and techniques are associated with these ideas. For example,
business model analysis and design, contrarian and lateral thinking, scenario planning,
competitive analysis – of current and future rivals, customer understanding, brainstorming,
performance measurement and direction setting. The challenge in teaching this view of
strategy has been how to integrate these disparate ideas within a single framework.
The Wheel is derived from a 2 x 2 matrix, with the two dimensions being: i) internal, or ‘in
here’ (firm and its resources) vs. external, or ‘out there’ (market place); and ii) today (current
operating environment) vs. tomorrow (environment approximately five years out into the
future). Each cell is then further split into two segments to which consist of the key strategic
questions that need to be addressed at each stage. This is graphically presented as the
Strategy Wheel in Figure 1, with the shape of the framework suggesting the active process i.e.
giving the Wheel one complete ‘spin’ represents one pass at developing a strategy for a firm
or brand.
Today Tomorrow
Summary of Steps
The following format has been found to work well when teaching using the Strategy Wheel:
• Sessions are run back to back over 2-3 full days.
• A single case study of a ‘live’ firm is used. Students are issued with a briefing pack
(to be pre-read before the course) that contains relevant industry and firm information
(e.g. from the business press, brokers’ notes, annual reports, market research). This
form of information is preferred over a formally written case as it is closer to ‘real
life’.
• The Strategy Wheel is ‘spun’ as follows:
o Each step is introduced with a 20-30 minute presentation by the lecturer.
o Groups of about 4 then apply a set of worksheets that reflect the core concepts
of each step to the case.
o Groups then present their completed worksheets and thinking behind their
answers to the class for comment and debate.
o Instead of presenting their work for step 8, groups prepare a final ‘boardroom’
presentation reflecting all 8 steps and their recommended strategy.
Results
The Strategy Wheel has been used in over a dozen executive education courses with a global
business advisory firm’s European practice (PricewaterhouseCoopers, Financial Advisory
Services). Cases studies have been drawn from a range of industries, including automotive,
telecommunications, fmcg, and retail. Results have been:
• higher than normal ratings for the course (6 / 7 vs. company norm of 4.5-5.0 / 7)
• attendees have sent other members of their teams on the course
• there has been a reported use of the concepts in working with clients
• new business has been won using this approach
Student feedback has also been very positive for a post-graduate university course in strategic
innovation and marketing management.
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