The first instalment in the Strategy and Strategic Planning collection sought to clarify what truly constitutes a strategy. We made a distinction between aspirations or goals and strategy - the means by which the institution achieves these goals. In this, the second instalment, we focus on the foundations of strategy development.
“Strategos”, the Greek origins of the word “strategy” refers to the “art of the General”. The military origins of the term hint at its common misuse in strategic planning.
In warfare, sports, and certain other domains, the purpose of competition is to beat your competitor. There can only be one winner. Competitors all seek to “be the best” through direct, head-to-head struggle.
While the military and sports terminology may inspire some, it encourages a fundamental misapplication of strategy across industries, including higher education.
For institutions of higher education and other types of organizations, the goal of sound strategy design should be to occupy a unique position relative to other organizations. This is achieved by providing certain types of services, in certain ways, to a segment of the population. Ideally, the means by which this unique position is occupied by the organization makes it difficult for other organizations to mimic. When accomplished, the organization holds a “sustainable competitive advantage.”
When organizations competing in a particular industry do not offer adequately differentiated value, and the basis of competition is narrowly defined, competition becomes intense (see “Industry Rivalry” below). Organizations are often forced to compete on the basis of price.
“Competition is for losers” . . . if you want to create and capture lasting value, look to build a monopoly” (Source)
Westin Hotels introduced the “Heavenly Bed” campaign that provided guests with excessively comfortable sheets, duvets, and pillows. This tactic was too easy for competitors to mimic.Within a few years, Westin’s small difference from competitors was matched, costs rose for all competing hotels, and the differences between institutions minimized. Porter labelled this dynamic “competitive convergence”.
Competitive convergence is acute in higher education, for obvious reasons: regulatory schemes impose significant requirements, credentialing is (e.g. Bachelors, Masters, Doctorates) standardized, adult learners and other factors. Nevertheless, pundits see great opportunities to imagine new instructional strategies, leverage online education, unbundling of services, and niche programming.
Porter’s Five Forces is used to assess the nature and intensity of competition in various industries:
Source: Michael Porter
Too often competitive convergence rules the day: institutions respond to competition by making similar or if not identical investments, which range from the frivolous (larger football stadiums) to the latest instructional technology.
Concerns about institutional sustainability, graduate readiness, and inability retain first-generation students has stimulated the need for divergent strategies that offer students unique value and a greater choice.
Instalment 1.01 What is (and isn't) Strategy?
Instalment 1.02 Competing to be Unique
Instalment 1.03: Working with Constraints