Strategic Brilliance by Walia Chetan;

Author:Walia, Chetan;
Language: eng
Format: epub
ISBN: 9789354791369
Publisher: SAGE Publications India Pvt, Ltd.
Published: 2021-12-07T05:35:36.867452+00:00

When the knowledge remains moderate or specific to the domain and innovation is encouraged from within the firm's core areas, the firm tends to become excellent or the best in the world at its products or services. Such firms tend to follow premium pricing strategies, for example, automobile industry or the pharmaceutical industry. It is when the firms tend to follow a content knowledge expansion strategy with a constant innovation capability surge that they come in positions of defining future trends, for example Apple, Google and Amazon.

Value creation happens in all the four quadrants. Brilliance lies in combining new knowledge and innovation to create ahead of the curve. Even the smallest of these combinations represented by GQ or garage quotient is enough to end years of efficiency and excellence. Amazon, which started in a garage, was enough to threaten and virtually put an end to book stores. A business plan conceived in Stanford Graduate School of Business would create Google that virtually brought the end of directories and yellow pages. An Uber would do the same to private taxi businesses.

The GQ companies often don’t even make money; that is, they take years to come up with a value capture methodology, but they do put an end to businesses with years of legacies. To explain further, the GQ companies do not necessarily come out with a better product or greater expertise. They meet a customer's need that was left unaddressed by the expertise. Amazon, Google, Uber, Netflix and iTunes were all, for example, built around ease and simplicity. People like me still cherish the experience of going to a bookstore and surfing endlessly, but we do not do it anymore. That is the GQ. The GQ puts a firm in a position to define the future trends and capture the white spaces.

It is useful to think of value creation in terms of GQ. What little value creation that need not even be the best product or service meets a customer need overlooked by the giants? The GQ or future strategies from thereon are not about cost, price or service models. They are all about mass customer acquisition. The business models, at least initially, are not built around value capture, though they should be. They are built around capital capture. And in capturing capital again, value creation trumps value capture. How else does anyone explain WhatsApp operating with a small team in a small office with virtually zero revenue being acquired for billions of dollars? That is the GQ. The post office has all the expertise and excellence to deliver a message. It is profitable in most countries. It creates immense value. Yet it is an isolated expertise, and so the capital will flow towards the brilliance.

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