The Strategic Triangle

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Cognitive Style

“Cognitive style is a person’s preferred way of gathering, processing, and evaluating information” (Hayes & Alison, 1998, p. 850). According to this definition, the cognitive style affects how an individual perceive the environment and gather information in various contexts. It influences how persons structure and interpret information and finally incorporate it according to their own subjective theories or understandings. This will consequently direct their action. 5 It is crucial that individuals process information in order to recognise change. If individuals fail to recognise important changes that occur around them, they are likely to fail in the exploitation or development of their own knowledge and talents. This may then result in failure to reach organisational objectives (Hayes & Allison 1998).

Environmental perception

Managers reflect upon various measurable characteristics in the market. They must do this to match the company’s strategy to the environment in which they are operating. Environmental perception of an individual could be competition, entry barriers, industry development and maturity level. Prince (1992) presents a further dimension of the environment in which a firm competes. Namely that people create and endorse the environment they are in. This is done through gathering, selecting and screening of information. According to Prince (1992), it is not the environment as such that really should be taken into account but in fact the individual’s ability to understand it and forecast in order to reach the most effective result. As the environment may be perceived as stable, others could perceive it as uncertain or competitive. Consequently, strategy makers will respond in different ways, similar to individuals who perceive the environment differently Prince (1992)

Competitor Perception and Identification

A firm needs to identify its competitors in order to develop competitive advantages. We will present a theory created by Clark and Montgomery (1999) that evaluates how an organisation perceive competitors and what the most important factors are behind it. Clark and Montgomery’s (1999) research pursued two approaches to competitor identification: 1. Supply-based approach categorizes competitors according to what attributes the competitors have. By attributes they mean how alike the competitors are in terms of products, strategy and marketing. According to Walton (1986), the most important attributes when an organisation identifies a competitor are: product offers, firm performance, geographic scope, style management and ownership. Clark and Montgomery (1999) state that managers should put more emphasis on competitors based on what customers they have. It is important to identify customers as many attributes in the supply-based approach are vital for customer identification.

Goal Congruence

To demonstrate how goals vary in an organisation, we will present the concept of goal congruence. This will help us to understand how organisations and individuals in the same group work with goals. Organisations have set goals within the firm that every employee should work towards. In order to reach best possible outcome, all employees should work for the same goal. Most organisations intend to implement a system that influences individuals to act in a goal congruence manner. However, the goals vary between what executives and employees of an organisation want. “In a goal congruent process, the actions people are led to take in accordance with their perceived self-interest are also in the best interest of the organisation” (Anthony & Govindarajan, 2001, p. 98). According to this quote, goal congruence will lead to an organisation having coherent goals.

Customer-Based Strategies

To gain a strategic edge over competitors, one must segment the market in order to meet the customer’s needs. There are two basic models of market segmentation. The first is segmenting by objectives, “different ways different customers use the product” (Ohmae, 1982, p. 99). Take chewing-gum as an example, some people take it because it tastes good while others use the gum to get rid of their bad breath. The second model is segmentation by customer coverage, this could be created from due to a firms own circumstances. Even if a firm targets a large group or segment of customers who have same preferences, the organisations capacity to satisfy them may be limited by the available resources. The making of strategic segmentation normally emerges from a trade-off between marketing costs versus market coverage.

Competitor-Based Strategies

The Competitor-Based Strategies can be developed by potential sources of differentiation in a number of functions. These are purchasing, design, engineering, sales and servicing. There are two methods that can be used in order to achieve differentiation. The first one is power of image which implies that firm’s image is very important when one wants to achieve differentiation. A power of image can be created to manage the marketing functions, promotion and distribution with much greater care. The second method is called capitalizing on profit- and cost structure differences. This method implies that a company with higher cost structure should always look for functional differentiation. In our research, we used this model of strategic triangle by Ohmae (1982) to formulate questions for our qualitative interviews. Also, we have used this framework in our analysis to evaluate where in the strategic triangle most differences and similarities exist. As mentioned earlier, this model presents the key factors of strategic success. Therefore, more perceptual differences mean less success in the Yoigo’s strategy. This theory will function as a frame to help us find the key differences with the intention to fulfil our purpose.

Table of Contents :

• 1 Introduction
  • 1.1 Background
  • 1.2 Problem Discussion
  • 1.3 Purpose
  • 1.4 Delimitations
• 2 Theoretical framework
  • 2.1 Fundamental theories
    • 2.1.1 Strategy Perception
    • 2.1.1.1 Cognitive Style
    • 2.1.1.2 Preferences
    • 2.1.1.3 Environmental perception
    • 2.1.1.4 Competitor Perception and Identification
    • 2.1.1.5 Size of Competitive Category
    • 2.1.1.6 Problems with Perception
    • 2.1.2 Strategic awareness
    • 2.1.3 Goal Congruence
    • 2.1.3.1 Organisational Constituency
  • 2.2 Main theories
    • 2.2.1 The Strategic Triangle
    • 2.2.1.1 Customer-Based Strategies
    • 2.2.1.2 Corporation-Based Strategies
    • 2.2.1.3 Competitor-Based Strategies
    • 2.2.2 Strategy Process
    • 2.2.2.1 Strategy Formation
    • 2.2.2.2 Strategy Implementation
    • 2.2.3 SWOT
    • 2.2.3.1 Internal
    • 2.2.3.2 External
  • 2.3 Research questions
• 3 Choice of Method
  • 3.1 Inductive vs. Deductive Approach
  • 3.2 Qualitative vs. Quantitative Method
  • 3.3 Interviews
    • 3.3.1 Mapping and Scales
  • 3.4 Observations
  • 3.5 Secondary data
  • 3.6 Method for Analysis
  • 3.7 Trustworthiness
• 4 Yoigo
  • 4.1 Background
  • 4.2 Organisation
  • 4.3 Future Strategy
  • 4.4 Competitors
  • 4.5 Industry
    • 4.5.1 Macro Economic Development
• 5 Empirical findings
  • 5.1 Competitors
    • 5.1.1 Maps and Scales
  • 5.2 Costumers
    • 5.2.1 Maps and Scales
  • 5.3 Corporation
    • 5.3.1 Maps and Scales
  • 5.4 Strategy Process
    • 5.4.1 Maps and Scales
  • 5.5 SWOT
• 6 Analysis
  • 6.1 Competitors
  • 6.2 Customers
  • 6.3 Corporation
  • 6.4 Strategy Process
• 7 Conclusion and Discussion
  • 7.1 Conclusion
  • 7.2 Discussion
  • 7.3 Further research
  • 7.3.1 Practical Implications
• 8 References
• 9 Appendices

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Strategy Perception A Qualitative Study of Perception Differences and Similarities