Strategy Development Blog #5: Envisioning Innovative Strategy as Chess

As a student in the program in Innovation for Products and Services, I was surprised by the “Creating Destruction is Accelerating” because I always perceived business to have a “key” that companies need to figure out to succeed. However, the main thing I learned throughout this course and particularly in this article was the importance of accepting change and renewing a strategy to align with the market. In the article, I was particularly surprised by the fact that companies’ longevity is expected to decrease   with time (Chart 1). To me, such an information highlights the criticality of time such that a company can adopt as many strategic changes to enter as many suitable markets in such a short amount of time.

Looking back, I can relate to this from a previous experience I had with an organization called StudentHub. Initially, Studenthub was meant as a platform to connect students in Kuwait with potential employers as we believe that LinkedIn and other job search engines did not address that need in the given region. After some time, the cofounder decided to expand and include full-time jobs and rename the brand to avoid any confusion. Personally, I was stuck on the value and the goal that we initially targeted, and so I disagreed with the proposed changes. Nonetheless, as we conducted market research and interviewed our customers, we got positive feedback on the changes especially because it would promote growth. As I read the article, I believe that it was beneficial to adopt such a change within a short time period, as the number of new customers is reaching its maximum. Thus, this makes me think of the longevity of the product as our growth is decreasing significantly.

In addition, once we introduced the idea of expanding in a national event, we were approached by some competitors and were told that they never saw “Studenthub” detaching such that it served markets other than students. This comment now rings a bell because it aligns with the finding that most businesses fail to foresee new competitors. Given my initial misconception of strategy, I think that a better view of strategy is as a chess game where a player has a limited amount of time to make a decision that takes into account the ultimate goal of winning, the player’s current status, and the opponent’s decisions and steps.   

https://www.innosight.com/insight/creative-destruction/

Blog 5: Twelve Forces and the Arts

Today I'd like to discuss the ways in which elements of BCG's Twelve Forces model impact and are impacted by the arts industry. The model splits these twelve forces into two equal groups - changes in the demand for talent and changes in the supply of talent. The arts have a unique relationship with both of these groups.

The first force that is discussed is Automation. The article details that by 2050, nearly half of all US jobs could be automated. The arts hold a unique position with respect to automation because many people don't generally think of the arts as being a skill that can be automated. However, on the most basic level, there are many positions in art institutions that may be at risk of this threat, like those who work in box offices and lighting crews for example. Interestingly, there is a fair amount of research dedicated to the replication of creativity in technology. There is a large body of work of automated digital artwork, and authors like Robin Sloan, have begun work to develop software that can generate entire unique novels. There is a question in many peoples minds if this is still art, without that direct human contact to the work. It will be intriguing in the years to come to see if people readjust to this new form of art and enjoy it for what it is, or if there continues to be pushback and lack of acceptance.

Another force that plays a large part in the arts is Access to Information and Ideas. The article reports that by 2020, the worlds 7.6 billion people will use 11.6 billion mobile devices. Successful arts organizations are incorporating the role of technology and smartphones into their work and the way it's presented. As I mentioned in a previous blog, one example of this is the Cleveland Museum's ArtLense app, with which audiences can interact with the art they see on the wall, getting details about it and even playing games that have to do with the art they're seeing. Some artists have begun to create works that interact with technology, like Robert Bucks iPainting. This work looks different and more elaborate on your phone when you take a picture of it using flash. Another example of art institutions embracing technology is organizations like the Pittsburgh Opera that just launched an app that allows audience members to follow along with the opera, reading interesting facts about the text or the music.

Ultimately, technology's role in the arts is determined by the viewers. Do you think these pieces are just as much art, when they don't have the same human touch? What form will art take in our future?

Blog #5: Shared Value of Alta Gracia

Brands today like Nike, Ben & Jerry’s Ice Cream, Patagonia, and Gillette have rolled out marketing campaigns that addressed diversity and inclusion, civil rights, climate change, and toxic masculinity, respectively. By taking progressive positions for the aforementioned societal issues, these brands have positioned themselves with socially-minded consumers which creates a shared value for both producer and consumer. A decade ago, it would have been difficult to envision a future where major companies provide a platform for discussion on these issues. However, an argument could be made that there were signs of movement that I experienced firsthand when I was a student at the University of Pittsburgh.    

  

During my Freshman Year at the University of Pittsburgh, I joined the Residence Student Association (RSA) to get my first taste of leadership at school. As one of the largest student organizations on campus, a special event was to be held during the fall semester which would unveil the organization’s T-shirt for the Fall 2012 – Spring 2013 academic year. I didn’t expect much from the event yet it exceeded my expectations and left an impressionable mark on me when it came to creating shared value for consumers, producers, and communities.

The President of RSA in collaboration with student activists, worked to design and purchase RSA’s T-shirts from Alta Gracia, a living wage apparel company based in the Dominican Republic. As a consumer, it was refreshing to wear a brand that went against common industry practice by sacrificing profits for the sake of mission. By supporting Alta Gracia, the actions of RSA would ensure dignified labor for employees working in an apparel factory.    

The push to hold apparel brands accountable for the safety, treatment, and fair compensation of their employees was further galvanized as a result of the Tazreen Fashion Factory fire (2012) and the Rana Plaza building collapse (2013), which claimed over 1,000+ lives in Bangladesh. Students sought to push the University of Pittsburgh to demand that their own apparel brands, such as Nike, sign the Worker’s Rights Consortium and the Bangladeshi Safety Accords ensuring—that at the very least—apparel factories maintain safe working conditions and treat employees ethically and fair. It was during this time that I learned how challenging it is to push large institutions like Universities to support initiatives that may run counter to their economic interests. A brand like Alta Gracia, although more socially-driven via their actions than other more well-known apparel brands, is more expensive for consumers, especially those seeking to purchase apparel items in bulk.

My experience with the anti-sweatshop labor movement at the University of Pittsburgh taught me about the power (and challenge) of consumers organizing to demand apparel brands to provide safe working conditions, workplaces free of abuse and discrimination, and living wages to employees. To me, the RSA T-shirt became more than just a random, free college T-shirt that one would cycle when they went to the gym or to bed. It felt like I was also a part of a bigger mission of supporting socially responsible business.  

Blog #5: Shared Value creation at Nestle

Traditional business approach dictates generating revenue, profits and rewarding shareholders. However, in recent times this approach has undergone certain changes. The value generated in business by people and society in general has gained importance. Economic value along with this societal value together has given birth to concept of Shared Value. This is exactly the value that Nestle embodies.

The belief at Nestle is that long term success in a company can be achieved only by creating value for both shareholders as well as for society. Nestle believes that creating such shared value helps maintain relevance in a business.

Traditionally, companies implement CSR(Corporate Social Responsibility) initiatives since they are mandated. However very few companies take active interest in the CSR activities and are able to add value to their business through the CSR activities.

Nestle launched an initiative called the Global Youth Initiative(GYI) in the year 2017. The GYI is expected to generate 10 million opportunities for young people in the next 10 years. Nestle has identified a very common problem through this initiative. Many youth move from small villages to big cities in search of employment. In the process, they leave their villages in uncertainty and lacking skilled youth. This leads to less advancements in fields like farming, since most of the farming happens in villages. Nestle believes that farming needs to be seen as a viable career option for the youth. Nestle plans to fund and equip the youth with skills to pursue careers in such fields. So, the next generation of agripreneurs, entrepreneurs and leaders could then create an impact in fields such as farming. This helps Nestle add value to their own business, by providing employment to the youth.

Another initiative by Nestle is the caring for water initiative. There is a very obvious value add here as Nestle requires huge amounts of water in their factories and plants. The caring for water initiative encompasses areas such as reducing the use of plastics, preserving water bodies, using sustainable resources over non-renewable resources etc.

To tackle the plastic issue, Nestle aims to reduce the amount of packaging done using plastic. Especially the packaging of food and beverages is traditionally done using plastic. If a viable alternative is found for the same, there can be a reduction in the use of plastic. Along with plastic, solid waste is also a major cause for concern, as most of this waste is disposed in the water bodies. Nestle aims to reduce solid waste from their own plants first and then from other activities.

Each initiative of Nestle’s shows a shared value. One takeaway from Nestle is that they have truly embodied the combination of business and societal values, and are actually implementing them.

References:

Nestle.com. (2019). [online] Available at: https://www.nestle.com/csv [Accessed 29 Apr. 2019].

Hbsp.harvard.edu. (2019). Harvard Business Publishing. [online] Available at: https://hbsp.harvard.edu/download?url=%2Fcourses%2F617870%2Fitems%2FR0804E-PDF-ENG%2Fcontent&metadata=e30%3D [Accessed 24 Apr. 2019].

  

Blog 5: Saving the Future

The future of organizations depends on actions taken by the management well ahead of time. As the professor mentioned in class this week, when a company lays people off, it is usually the fault of the management. This made me think of the reasons why it could happen so. One such case we discussed in class was the failure to get employees excited about work, failure to tie their interest to the work they do, and this would be the management’s fault for not doing so. Here, I mention some of the approaches to the long-term success of organizations.

1.    Communicate the vision and strategies of the company to all the employees.

Although this may require significant investment and time and money, it is important not only to just communicate vision but also tie each employee’s work to the strategy and goals of the company. When people do not know how their work would benefit the company, they may not feel energized to do their job, which often results in a lesser quality of work than they are capable of.

2.    Reward based on performance to motivate employees.

Despite money being the most imperative incentive for many, rewards that recognize performance can also be a driving force to push people to stay energized at work. At my previous workplace, a rewards tool was used in which monetary rewards in the form of Amazon coupons were given to good performers. Along with this, we could also send “Thank You” notes and appreciations to fellow colleagues, and it does feel good to receive appreciation from the people who work with you closely as compared to the manager, who may not be around as much. This, I believe was a way to energize people to perform better by gratifying their effort.

3.    Look for changes in customers’ needs.

It is a best practice to keep customers at the center of all discussions, so the companies know what they need to do to retain or grow their customer base and/or revenue.

4.    Look for trends that may sweep your market.

Sometimes, when companies think they have a strong hold on the consumers, they may get beat by a different product or by the same product with different features that the former company did not bother to invest in. These days, technological advances can give pushes to a firm’s offerings and need to be evaluated well in advance to stay ahead in the game.

5.    Enabling the society to help themselves and the organizations.

This is a shared value creation concept that suggests that companies, even while being profitable, can serve their surroundings and make it better equipped to use their offerings in the future. For example, many tech firms organize events to educate underprivileged children in technology. This is an investment that could bear fruit in the future since many of these kids may develop an interest in technology, which means a bigger market for the firm in the future.

Blog 4: Strategy and Implementation, the new fad.

The focus on strategy development, execution, and follow-through is a very interesting one, as many a company’s performance and future are wired to how well they perform these tasks.  On one end you have companies like Edward Jone’s which does an impeccable job of developing a succinct strategy and implementing it uniformly, and on the other end we see many companies who jump at incorporating the latest thing into their business.  Not surprisingly, successful implementation doesn’t come easy, it requires both thorough development and strong execution even then it may fail.  In 2017-2018 an ever increasing, number of companies began talking about blockchain and how they could utilize it and or were utilizing it. 

As bitcoin become more and more valuable, we continued to see an increase in companies talking about blockchain with a majority of top executives asking about how they could take advantage of it.  The use of blockchain within various organizations was a nice goal for companies to attempt to reach as the benefits it could bring seemed endless.  But at the same time the capability of these organizations who wanted to use blockchain and the information technology providers who were pushing blockchain solutions was not up to par.

It is rather amusing that so many organizations were seeking to use blockchain to stay ahead of the curve and gain some sort of advantage.  This makes sense though because at the same time, we saw a majority of advisory and consulting businesses touting their capabilities to clients.  Yet today it seems obvious that we don’t see blockchain solutions in place every where we look because this new technology had many roadblocks to implementation.  Nonetheless there are still plenty of examples blockchain solutions that are still being pursued.  Conveniently enough we can look at Kodak who missed out big time on digital cameras even though they were pioneers in development.  One trend they didn’t miss out on per say is blockchain.  But I wouldn’t be surprised if you haven’t heard of KodakCoin. Their licensing solution for photography, it has been in the works for several years however its release has been delayed multiple times.  Interestingly enough and not knowing Kodak’s true motives and just believing they were hoping to be a first mover with a blockchain, they definitely made it very clear to the market that they were “developing” this solution and their stock price soared.  Kodak’s stock now seems to be correlated with the price of cryptocurrencies even if KodakCoin/KodakOne has not been rolled out and may never be.

Blog 4: Strategy Development - Data, Organizational Change and Market Factors: Getting Uber It.

In our last class, we discussed whether or not Uber was a truly disruptive technology or not, letting the question remain unanswered. In light of its IPO, it’s worth looking at the strategy of the company through the lens of the readings we completed this week, in short, looking at intra-organizational dealings, market based strategies and the focus on data and scientific enquiry.

We begin by looking at Uber’s intra organizational factors. Seen as a startup comprised of software engineers, there has clearly been an emphasis on creativity, along with the pressure to deliver in recent years as losses became more apparent. In this way, creativity has been tempered with the need to deliver results, while time has been given in earlier years to develop capabilities. This has resulted in width across the market, when depth of penetration became harder to obtain (for the company as a single entity, not the entire industry comprising of Lyft, Via, Juno etc.). The company now works on Uber Eats, Uber for Freights, automated vehicles as well as Uber in the Air, a helicopter service. However, Uber certainly fails in some respects.  One is certainly looking at the chain of command. Uber is very strongly top-down, rather than democratic in how it makes mist of its decisions. This was exemplified by the reputation of its previous CEO, Travis Kalanick, who led to Uber being merely “masqueraded as a democratic movement”. (1)

So much for Uber’s intra-organizational behaviors. When we look at its strategy within the market, there is an Uber folktale that comes to mind that says that Kalanick founded Uber when he was unable to find a cab in Paris. Clearly, Uber aimed to fill a scarcity, had a granular market (busy cities and possibly tourist heavy ones, possibly with a scarcity of good public transport) and the fact that there is often haggling and bargaining involved when hailing cabs slowed the working of the market. Uber created its own special capabilities through its team of highly skilled engineers and data scientists, which the taxi industry could not access. 

This  folktale put the company ahead of the curve, as it showed the trends of people learning to travel more across the world and then being cut off not just from familiar food (something that McDonald’s has in some way satisfied, funnily enough), but other regular services. Its strategy now had some form of on the ground data, and balanced itself between “commitment and flexibility” by aiming itself at the corporate business population. Finally, there was clearly an action plan, as evidenced by Uber’s quick development of its app.

Uber clearly used outside in strategies when creating its strategy. At its inception, Uber had to ask itself two questions: whether to continue the status quo of taxis or to focus on using technologies to create a new workforce. When broadened, there are other options such as developing another kind of public transport service or calling nearby cabs on demand, rather than using a driver’s own resources. It is unlikely that the app can malfunction a majority of the time and thus, that is a good option. Clearly, some strategies are too close to the status quo and one (creating a new public transport system) is undoable. Of course, all of Uber’s tests for each barrier are unknowable. 

Uber also aimed to save time and provide comfortable, status affirming transport for its clientele, in line with the values and end aims of corporate business people. As Uber’s main competitors at the time were cabs, Uber believed it provided better capabilities, especially in areas further away where cab drivers would generally refuse to go. As to costs, while Uber did not bear costs such as car upkeep and barely any costs for their taxi drivers who are only contractors, they did have to pay an elite team of engineers to create their applications. It is unknown what the ratio of costs for cab services to the costs for Uber were. However, Uber was aware of one area and that was that its competitor could not react in a suitable way. They could not impose cutting fares for all cab drivers, as there was no sense of unity in that way, unlike in Uber, where prices are regulated by an algorithm developed by a united front, which is the company. Cab services also could not retaliate in a similar technology driven fashion, without overhauling their entire business model at great cost to themselves. This, at the end of the day, gave Uber its competitive advantage and edge in the market.

At the end of the day, there are clear gaps in our knowledge of Uber’s strategy, but we can see enough to see that while it has not gained in profit, its growth and marketshare is immense, now having crossed continents. And as its IPO comes up and we see the angry reactions of employees off the backs of which Uber has profited, either through unfair pay or not listening to them, we shall know the future of the company and the usefulness of its strategy. 

1) "Travis Kalanick and The Last Gasp of Tech's Alpha CEO" ,https://www.wired.com/story/travis-kalanick-uber-ceo-leave/, Nitasha Tiku June 21, 2017.

Blog 4 Strategy Implementation

Today I will discuss the article "Good Strategy Execution Requires Balancing 4 Tensions" by Simon Horan and Michael Connerty, in reference to my time as a board member at a small art gallery and event space in my hometown. We'll call this organization Gallery One for the purposes of this blog. During my time at the organization, we had many attempts at implementing an organizational strategy and even took weekend retreats to create and assess our strategic plan. However, hardly anything we discussed had a lasting impact on the way the organization was run and the place it held in the community.

The first tension the article discusses is balancing an inspirational end-state with challenging targets. Horan and Connerty talk about the importance of having both a clear vision of the future as an organization as well as midpoint targets to get you there. At Gallery One, we often discussed aspirational ideas for what we'd like to accomplish, from groundbreaking programs we'd like to eventually run to getting national press. However, these conversations were broad and included many differing ideas, rather than comprising a collection of thoughts that could lead toward one strong future version of the gallery. These different visions of the future were split up and given loose ownership by different committees, but for the most part, they were forgotten about after the meeting. There were also no mid-point goals set to guide us toward these visions. There was no team effort implemented to reach this inspirational vision of future Gallery One.

The second tension is top-down control versus democratization of change. Top-down control can work for some large companies as long as employees lower on the org chart need to feel empowered to be decisive in their own work as well. At Gallery One, there was little to no top-down control. We only had a full-time Executive Director, a part-time Gallery Manager, and a working board comprised of volunteers. Because of this, all the help was needed wherever it came from and many decisions were made through full group conversations at board meetings once a month. Although the Executive Committee of the board ultimately had the final say, everyone had a voice that was heard in decision-making.

Tension three is development of capabilities versus pressure for results. Unfortunately, this was something that Gallery One did not excel at. As I said, the organization was still fairly small and was constantly overwhelmed with things that needed to be done. Because of this there really was no time for individual growth in the organization besides learning things on the job and under pressure to perform. Thankfully as a small organization, there was a fair amount of understanding and room for things to be completed sub-par without a large amount of damage to the organization. This also brings me to the last tension of creativity versus discipline. This freedom to learn what you're doing as your executing it for the first time is a reflection of the culture of creativity in the organization. We were always trying new programs and experimenting with new ways to market things. Although this allowed us to get a good idea of what things worked for us and what things didn't, had we had more discipline in developing a specific plan of action and sticking with that in order to reach the inspirational visions we had for the future, I think we would have been much more likely to meet those expectations for the future.

Blog #4 Design Thinking in Strategic Planning

Blog #4

A common theme across various articles was that strategy is often influenced by short term issues or goals. In my experience, I have seen that businesses which are especially plagued by poor operations and execution are unable to stay out of their productivity issues for long enough to be able to concentrate on long term strategy. The senior leadership is constantly focussing on solving problems on a daily basis. A term I have often come across is “fighting fires”. While creating strategies, leaders are constantly trying to “fight fires” so that they can improve numbers. While focussing on improving delivery is not necessarily a bad thing, this can turn out to be a never ending cycle. As Lafley et. al point out, getting stuck in a “planning ritual” is very easy. Earlier in my career, I would often confuse this with a company being complacent but in reality it is just the inability to look past short term gains. In large public companies, this is often a product of emphasizing too much on shareholder gains. Again, this isn’t necessarily a bad thing but an organization must keep in mind the longer term gain, even as it applies to its shareholders. The company I work for actually did a good job of addressing this issue of being in a perennial “fire-fighting” mode. For a sustained period, profit margins were low despite sales constantly going up. The senior leadership realized this and implemented an organization wide initiative to restructure. For about 3 weeks, all project related work was halted in order to identify possible improvements. This was a very bold move. The business unit in question brings in about $3 bn in annual revenue. And halting it would mean the financials would not look pretty for at least a year. However, the management saw the long term picture and started a planning process similar to what is described in the Lafley article. This restructuring process resulted in a strategy with the goal of improving margins (this was an exact number but I cannot disclose). Well, that was pretty obvious one would think. However, what impressed me most was that they came out with a focussed way to do it. They identified 10 metrics and areas to focus on including engineering reporting, eliminating bureaucracy, etc. 

While I wasn’t involved in the larger picture, my team also went through a process to identify ways to reduce costs. engineering hours spent and improving value. To do this, we used the design thinking process which is very similar to the strategy planning framework described by Lafley. The major difference being we used activity mapping to identify bottlenecks in the delivery process. However, some of the characteristics like flattening the organizational structure to enable creativity, not letting leaders be the facilitators and including the status quo as an option were similar.

Blog #4: Developing successful strategies: How Aldi’s became a supermarket giant?

According to “Can you say what your strategy is” authors David J.Collis and Michael G.Rukstad, a good strategy is the one that has a well thought out objective, scope defined by boundaries, and competitive advantage that sets the company apart. These three critical components help strategy be easily formulated, communicated, and understood by everyone in the organization. The first component, "objective” isn’t the value statement of the company. It’s the business objective that drives the company for a specified period. Scope refers to the market, customer or geographical segment that the company intends to target. It helps an organization to focus its efforts. The final component, competitive advantage refers to the unique value proposition the company delivers to its customers and the one that defines the company in the market place.

Defining a strategy statement in the manner above has helped many firms succeed. In 2018 Aldi’s planned it’s US expansion and set the goal of becoming the third largest grocery store in the US by 2022. To achieve this, it planned to expand in suburban, middle and upper-middle class neighborhoods. Aldi’s defined a clear objective, target geography, and means to achieve the goal. It decided to position itself in the retail supermarket space by delivering high-quality products at low prices.  For its US expansion plan, Aldi’s was drawing upon its past experiences from other countries like Germany where it had become an affordable high-quality supermarket for the middle class. Aldi’s used strategies like prioritizing quality Aldi products over generic brands, reducing the number of items, charging customers for bags, keeping store size small, and limiting the number of open hours to deliver the value proposition to customers. Emphasis on cheap, high-quality products and limit on the number of products and brands it sold gave Aldi's the edge in the retail supermarket space. It went on to become one of the largest supermarket companies in the world.

Successful strategies need several iterations, the involvement of multiple departments, and careful evaluation of alternatives. The first step in strategy development stage should be building 2 mutually exclusive options that helps companies achieve their defined goal. The list of options has to be broadened to include several possibilities. For each possibility, the conditions and barriers have to be listed. Then tests have to be designed and conducted like customer surveys, business evaluation using consultants to evaluate the options. Finally, either the least risky option or the status quo is chosen. Aldi’s used a similar approach and evaluated different strategies ranging from using a Walmart like warehousing approach to increasing the number of quality products but ultimately decided to adopt one that could best leverage its advantage and the most feasible. My key takeaway from this week's reading is that objective, scope, and advantage are the three components of a good strategy and strategies are developed after evaluating several options in multiple stages.

References:

1)  David J.Collis, Michael G.Rukstad(2008, April). Can you say what your strategy is. Harvard Business Review.
2) Lafley, A. G., Martin, R. L., Rivkin, J. W., & Siggelkow, N. (2012, September). Bringing Science to the Art of Strategy. Havard Business Review.
3) Gennaro Cuofano. ALDI Business Model In A Nutshell . 4WeekMBA. Retrieved from: https://fourweekmba.com/aldi-business-model/
4) Phil Lempert (2018, August). Inside Aldi's $5 Billion Plan To Become The Third-Largest Grocer In The U.S. Forbes. Retrieved from: https://www.forbes.com/sites/phillempert/2018/08/09/aldi-is-focused-on-keeping-it-simple-and-high-quality/#6ac7b5fd427b

Blog #4: JD.com's Boundaryless Retail Strategy

After reading David J. Collis and Michael G. Rukstad’s “Can You Say What Your Strategy Is”, I really like the analogy of a mound of 10,000 iron filings. Even if executives make a correct strategy, the company would not succeed if their employees could not fully understand and implement the strategy. Thus, a simple clear strategy statement becomes exceptionally important.

In 2017, JD.com, one of the two massive B2C online retailers in China, developed its “boundaryless retail” strategy, which essentially defines the way for the future retail, where consumers can buy what they want, wherever they want it, whenever they want it – online, offline, or even virtually. In detail, JD.com wanted to build a flexible and fully-connected retail network which enables seamless shopping online and offline.

While it looks thrilling, I am more interested in how the “boundaryless retail” strategy defines the three basic elements of strategy statement introduced in “Can You Say What Your Strategy Is”.

Objective

Clearly the ultimate objective of JD.com was to entirely fulfill “boundaryless retail”. But it didn’t explicitly set a detailed timeline for this goal in its documents or announcements. Alternatively, it has narrowed down the objective to nationwide same day delivery in China in the next two years for all merchandise on JD.com. This is an appropriate explanation of the new concept of “boundaryless retail” since logistic is always an essential factor not only for an e-commerce platform but also for online shopping customers. Therefore, same day delivery would attract a considerable number of new customers to JD.com.

Scope

The “boundaryless retail” strategy didn’t restrict JD.com into the online retail industry. Instead, it basically combined online and offline shopping. That is, customers order online and offline stores ship the commodity. This allowed JD.com to expand the offline retail industry as well. For example, JD.com has partner with retail stores such as Walmart so that customers could order products on JD.com and get the product delivered from local Walmart storage. Moreover, JD.com has opened many grocery stores and convenience stores in different cities in China.

Advantage

According to “Can You Say What Your Strategy Is”, the competitive advantage of a company is what its business will do differently from or better than others. Unlike other online retail platforms that partner with third party logistics companies, JD.com has built up its own logistics network all across China and developed sophisticated data-driven delivery technologies since 2007. This becomes its most competitive advantage to achieve the goal of nationwide same day delivery. In addition, JD.com made a significant amount in R&D in building fully automated warehouses. For instance, it set up robotic labs and a robotic research center in the Silicon Valley. JD.com even put UAV delivery into use in the rural area in China.

Today, JD.com has reached its goal of nationwide same day delivery even in rural area in China. To some extent, the success of JD.com in “boundaryless delivery” is based on the clearly and well defined strategy.

David J. Collis and Michael G. Rukstad. " Can You Say What Your Strategy Is". April, 2008. Harvard Business Review.

Product.org. “’Boundaryless Retail’ is the Future of Shopping with the Speed of JD.com”. January, 2019. https://products.org/boundaryless-retail-is-the-future-of-shopping-with-the-speed-of-jd-com/

JD.com. “Corporate Strategy” Mar, 2019. https://1cn9a51rqjf725dws347pvfp-wpengine.netdna-ssl.com/wp-content/uploads/2018/05/Corporate-Strategy-Factsheet-1.pdf