|Posted on April 29, 2019 at 8:30 AM|
I taught a university-level strategic management course for over 5 years. The course used a very good textbook from Hill and Jones titled Essentials of Strategic Management (3rd Edition). One of the core concepts presented in the textbook is the explanation of the three different strategic levels of an organization (functional-level, business-level, corporate-level). Each level gets more “big-picture” as you go from functional-level to corporate-level. The functional-level book discussion presents what I considered an “aha” moment. At this level, organizations should develop strategies around what Hill and Jones consider the 4 building blocks of competitive advantage. The four building blocks are Superior Quality, Superior Efficiency, Superior Customer Responsiveness and Superior Innovation (Hill and Jones, 2009). Just look around, some of the best regarded companies these days focus on most, if not all, of the building blocks (whether they know it or not). Apple is certainly near the top of this list. Even from casual observation, one can understand that Apple appears to address each of the building blocks of Superior Quality, Superior Efficiency, Superior Customer Responsiveness and Superior Innovation. Another example organization is United Technologies (Hill and Jones, 2009). Even though United Technologies is a very diversified company (they make elevators and jet engines to name a few), these four building blocks seem to be their core competencies across all of their companies and appear fundamental to their success. For the most part, the four building blocks are nothing new. In fact, the four building blocks generally map to the Balance Scorecard (Hill and Jones did just this in the instructor notes). A major aspect of the Balanced Scorecard is its focus on developing (functional) strategies at all levels of an organization from a learning and growth perspective, business process perspective, customer perspective and the financial perspective (Kaplan and Norton, 1996).
In most cases, companies can help develop a competitive advantage by developing functional level strategies that address the four perspectives of Superior Quality, Superior Efficiency, Superior Customer Responsiveness and Superior Innovation.
The weather strategies that you develop for your company should also address these building blocks of competitive advantage.
With this in mind, let's see how an organization may be able to develop weather strategies in regards to the four building blocks: Superior Quality, Superior Efficiency, Superior Customer Responsiveness and Superior Innovation. Let's say your company is a natural foods supermarket chain. What weather strategies can you implement to help your business?
Let's start with quality. Quality can mean different things. As outlined in the Hill and Jones book, quality can be looked at from a point of view of reliability or as excellence. A reliable supply chain is important to many organizations and especially supermarkets. Weather and other natural events can affect the reliability of the supply chain. A weather strategy to address quality for a natural foods supermarket could be obtaining weather information for your source regions. A tactic for this strategy includes using recent climate information to determine active distressed areas. Another tactic may be using future forecasts to determine the potential problem growing areas so you can proactively second-source your products. It is also important to understand how weather elsewhere could affect your supply chain. One example is how the drought/flooding of a river like the Mississippi can impact deliveries 500 to 1000 miles away. The weather strategy of obtaining weather information (recent climate statistics and forecasts) could also be helpful in addressing excellence requirements. If droughts, floods, heatwaves, cold spells impact you products, this information can proactively assist in keeping the quality at a high level.
The next building block area is developing strategies that work towards the goal of superior efficiency. Hill and Jones address efficiency from many different perspectives: R&D and efficiency, production and efficiency, marketing and efficiency, materials management and efficiency, information systems and efficiency, infrastructure efficiency and human resource strategy and efficiency. On the surface, many of these perspectives match up to weather strategies and some probably not so much. For our sample natural foods supermarket there are many opportunities. Some weather-related strategies to assist in the goal of superior efficiency include utilizing weather information to help plan energy and also to assisted with marketing efforts. By incorporating long-range weather forecasts the natural foods supermarket can be more efficient with its energy usage and also be more efficient marketing products at the correct time they are needed in the future. For instance, if you know a heatwave is possible 6 weeks from now, your marketing or pricing strategy can take advantage of that information and if used correctly, increase profitability. There are new leading edge innovations that make this possible.
The next building block is customer responsiveness, A natural foods supermarket can determine weather strategies that make it more responsive to a clients needs. At the very basic level, this includes staffing the store for expected customer traffic based on weather and day of the week. Certain events can alter customer purchasing habits. One way to utilize forecast data is to make stock adjustments based on weather information. At the same time a company needs to realize some products are more weather sensitive than others and make plans accordingly.
The last building block is innovation. Our natural foods supermarket example may look at new innovative ways to incorporate weather information into their business. For instance, long range weather forecasts can be correlated to inventory and, if done right, this helps with customer responsiveness, helps assure the inventory is available and because of the integration may increase quality.
New weather-related opportunities are presenting themselves as big-data, predictive analytics, and integration of data occur. Many of these new ideas and technologies are available now. One of the focuses of WeatherStrategy is assisting organizations in developing strategies to incorporate weather data/information into their products for differentiation and to capitalize on weather related opportunities.
Hill, C. W. L., & Jones, G. W. (2009). Essentials of Strategic Management (3rd ed.). Mason, OH: South-Western Cengage Learning.
Kaplan, R. S. & Norton, D. P. (January-February 1996). “Using the Balanced Scorecard as a Strategic Management System”, Harvard Business Review Retrieved from http:/balancedscorecard.org/Resources/AbouttheBalancedScorecard/tabid/55/Default.aspx
Kaplan, R. S. & Norton, D. P. (January-February 1996). “Using the Balanced Scorecard as a Strategic Management System”, Harvard BusinessReview Retrieved from http:/balancedscorecard.org/Resources/AbouttheBalancedScorecard/tabid/55/Default.aspx