VUCA

Volatility, Uncertainty, Complexity, and Ambiguity (VUCA) are critical factors that affect the dynamism
of competitive strategy. These factors can create challenges for organizations as they try to adapt to
changing market conditions and maintain a competitive edge.

Volatility refers to the speed and magnitude of changes in the market or industry. In a volatile
market, competitors may find it challenging to anticipate and react to changes quickly.

Uncertainty relates to the lack of predictability or certainty about the future of the market or
industry. In an uncertain environment, competitors may struggle to develop effective long-term
strategies.

Complexity refers to the interconnectivity and interdependence of factors that influence the market
or industry. In a complex environment, competitors may find it challenging to identify cause-and-
effect relationships, making it difficult to develop effective strategies.

Ambiguity refers to the lack of clarity or understanding of the market or industry. In an ambiguous
environment, competitors may struggle to interpret information accurately and make informed
decisions.

To navigate the VUCA environment, organizations need to develop a flexible and adaptive
competitive strategy. Such a strategy should focus on agility, resilience, and innovation.

Agility involves the ability to respond quickly and effectively to changes in the market. Organizations
can achieve agility by developing a responsive organizational structure and culture, utilizing
technology to improve communication and decision-making, and empowering employees to take
risks and make decisions.

Resilience refers to the ability to withstand and recover from disruptions or shocks to the market.
Organizations can build resilience by diversifying their portfolio of products or services, developing
contingency plans, and investing in risk management strategies.

Innovation involves developing new products or services and creating new business models.
Organizations can foster innovation by encouraging creativity and experimentation, investing in
research and development, and collaborating with external partners.

In summary, the VUCA environment poses significant challenges for organizations seeking to
maintain a competitive edge. To succeed, organizations must develop a flexible and adaptive
competitive strategy that focuses on agility, resilience, and innovation.
Proliferation in strategy tools and framework
In recent years, there has been a proliferation of strategic tools and frameworks in the field of
business management. These tools and frameworks are designed to help organizations make
informed decisions and develop effective strategies.

• The dynamic nature of the business environment requires a structured and systematic
approach to decision-making and strategy development.
• The increasing complexity and uncertainty of the business environment make it difficult for
organizations to make informed decisions without a structured approach.
• The growth of data analytics and big data has created a need for tools and frameworks to
help organizations make sense of the vast amounts of information available.
• The consulting industry has developed a wide range of tools and frameworks to help their
clients develop effective strategies and make informed decisions.
• The adoption of strategic tools and frameworks by successful organizations has led to their
widespread use and popularity.
• The competitive pressure among firms has increased, and firms are using strategic tools and
frameworks to gain a competitive edge over their rivals.
• The growing importance of innovation and flexibility in the face of dynamic business
environments has led to the development of new strategic tools and frameworks that focus
on agility and adaptability.

Strategy Palette

The strategy palette is a framework for categorizing different types of strategic approaches
that organizations can use to achieve their objectives.

Business environment varies along three dimensions

• Predictability (Can you forecast/ predict it)

• Malleability (Can you – alone or in collaboration - shape it)

• Harshness (Can you survive it)

Combining these three dimensions, there are five distinct environments

Five archetypal approaches to strategy

Dimension Unpredictability Malleability Harshness

Classical Analyze-> Plan -> Execute Low Low Low
Adaptive Vary-> Select-> Scaleup (in circular) High Low Low
Visionary Envisage -> Build -> Persist Low High Low
Shaping Engage -> Orchestrate-> Evolve (in circular) High High Low
Renewal React -> Economize-> Grow NA NA High
Classical Strategy Framework:

When to apply: The classical strategy framework is best suited for businesses operating in stable and
predictable markets where the emphasis is on operational efficiency and cost control. It is also
applicable to businesses that have a well-defined mission and want to achieve long-term success by
leveraging their core competencies.

Three-step process: Thinking and Doing Separate

Analysis: This involves assessing the external environment and internal capabilities of the
organization to identify opportunities and threats. It also involves analyzing the competition to
identify areas of competitive advantage and potential areas for improvement.

Plan: Based on the analysis, the organization develops a strategy that leverages its strengths and
addresses weaknesses. This involves identifying the strategic objectives of the organization, selecting
the appropriate strategy, and creating a roadmap to achieve these objectives.

Execute: This involves executing the strategy, monitoring progress, and making adjustments as
necessary. It also involves aligning the organization's resources and capabilities to achieve the
strategic objectives.

Are your actions consistent with classical approach: To ensure that your actions are consistent with
the classical approach, you should focus on developing a clear mission, analyzing the external
environment, identifying core competencies, and leveraging these competencies to develop a
sustainable competitive advantage. You should also focus on operational efficiency and cost control,
while being flexible enough to make adjustments as necessary.
Tips

• Focus on developing a clear mission and vision for your organization.

• Conduct a thorough analysis of the external environment and internal capabilities to identify
opportunities and threats.
• Identify your core competencies and leverage them to develop a sustainable competitive
advantage.

Traps

• Overemphasizing cost control at the expense of innovation and growth.

• Ignoring changes in the external environment and failing to adapt to new opportunities and
threats.

Adaptive Strategy Framework:

When to apply: The adaptive strategy framework is best suited for businesses operating in dynamic
and rapidly changing markets. It is also applicable to businesses that are in the process of significant
transformation, such as mergers and acquisitions, or those that are facing disruptive technologies or
business models.

Three-step process: Convergence of thinking and doing

Vary: This involves continuously monitoring the external environment and identifying changes that
could impact the business. It also involves gathering feedback from customers and employees to
identify areas for improvement.

Select: Based on the information gathered in the first step, the organization develops and tests new
ideas and approaches. This involves experimentation and prototyping to quickly test and validate
new concepts.

Scale up: Once a new approach has been validated, the organization scales it across the business and
focuses on continuous improvement. This involves developing the necessary processes and systems
to support the new approach and embedding it into the organization's culture.

Are your actions consistent with classical approach: While the adaptive strategy framework differs
from the classical approach in its emphasis on agility and flexibility, it still incorporates elements of
analysis and planning. To ensure that your actions are consistent with the classical approach, you
should focus on gathering and analyzing data, identifying areas for improvement, and developing
processes to support the new approach.

Tips

• Embrace change and uncertainty and be open to new ideas and approaches.
• Foster a culture of experimentation and innovation.
• Continuously gather feedback from customers and employees to identify areas for
improvement.

Trap:

• Overemphasizing short-term results at the expense of long-term success.

• Failing to scale successful experiments or not focusing enough on continuous improvement.
Visionary Strategy Framework:

When to apply: The visionary strategy framework is best suited for businesses that are looking to
disrupt existing markets or create entirely new ones. It is also applicable to businesses that are
looking to transform their industry through innovative products or services.

Three-step process:

Envisage: This involves developing a clear and compelling vision of the future. It also involves
identifying the organization's purpose and values, and aligning them with the vision.

Build: Based on the vision, the organization builds the necessary capabilities, resources, and
partnerships to support the new venture. This involves developing and launching new products or
services, as well as building the necessary infrastructure to support them.

Persist: Once the new venture has been launched, the organization persists in the face of challenges
and setbacks. This involves adapting to changes in the market, learning from failures, and
continuously improving the product or service.

Are your actions consistent with classical approach: The visionary strategy framework differs from
the classical approach in its emphasis on innovation and disruption. However, it still incorporates
elements of analysis and planning. To ensure that your actions are consistent with the classical
approach, you should focus on gathering and analyzing data, identifying areas for improvement, and
developing processes to support the new approach.

Tips:

• Develop a clear and compelling vision that aligns with the organization's purpose and values.
• Foster a culture of innovation and experimentation.
• Focus on developing new business models and technologies to create new markets or
disrupt existing ones.

Traps:

• Focusing too much on the vision at the expense of execution.

• Overestimating the market potential of new products or services.
• Failing to build the necessary capabilities and resources to support the new venture.

Shaping Strategy Framework:

When to apply: The shaping strategy framework is best suited for businesses operating in complex
and uncertain environments, where traditional strategic planning may not be effective. It is also
applicable to businesses that are looking to create new markets or opportunities through
collaboration with external partners.

Three-step process:

Engage: This involves identifying and engaging with key stakeholders, both internal and external. It
also involves building relationships with external partners, such as suppliers, customers, and
competitors, to create new opportunities and shape the market.
Orchestrate: Based on the insights gained from engagement, the organization orchestrates a
network of partners to create value for customers. This involves coordinating the activities of
multiple partners to deliver a seamless customer experience.

Evolve: As the market evolves, the organization continuously adapts its strategy and network of
partners to stay ahead of the competition. This involves monitoring trends and emerging
technologies, as well as experimenting with new business models and approaches.

Are your actions consistent with classical approach: The shaping strategy framework differs from
the classical approach in its emphasis on collaboration and adaptability. However, it still incorporates
elements of analysis and planning. To ensure that your actions are consistent with the classical
approach, you should focus on gathering and analyzing data, identifying areas for improvement, and
developing processes to support the new approach.

Tips:

• Identify and engage with key stakeholders to gain insights and create new opportunities.
• Build strong relationships with external partners to create a network that delivers value to
customers.
• Continuously monitor the market and adapt the strategy and network of partners as needed.

Traps:

• Focusing too much on engagement and collaboration at the expense of execution.

• Over-reliance on external partners, which can create dependencies and limit flexibility.
• Failing to adapt quickly enough to changes in the market or technology.

Judo Strategy:
Judo strategy is a business strategy that draws inspiration from the principles of the Japanese martial
art Judo. It emphasizes the use of movement, balance, and leverage to gain an advantage over
opponents. Here's an overview of Judo strategy and some techniques for mastering its key
components:

When to use Judo strategy:

• When facing a larger, more established competitor

• When seeking to disrupt an industry or market
• When dealing with complex, uncertain environments

Judo strategy is based on three key principles

Movement: Judo strategy emphasizes the importance of agility and flexibility, enabling a company to
respond quickly to changing market conditions or unexpected challenges.

Balance: Judo strategy seeks to find and exploit imbalances in the market or in competitors'
strategies, allowing a smaller player to gain an advantage.

Leverage: Judo strategy uses the opponent's strength against them, finding ways to use their
resources, customer base, or reputation to gain an advantage.
Mastering Movement:

To master movement, a company must be able to quickly adapt to changing market conditions and
customer needs. This involves:

Staying agile: A company must be able to respond quickly to changes in the market, adapting its
strategy and offerings to meet new demands.

Emphasizing speed: A company that moves quickly can gain an advantage over slower-moving
competitors, seizing opportunities before they are able to respond.

Focusing on innovation: A company that is constantly innovating can stay ahead of the competition,
creating new products and services that meet evolving customer needs.

Mastering Balance:

To master balance, a company must be able to identify and exploit imbalances in the market or in
competitors' strategies. This involves:

Finding a niche: A smaller player can gain an advantage by focusing on a specific niche or segment of
the market that larger competitors may overlook.

Emphasizing differentiation: A company that offers unique products or services can differentiate
itself from competitors and gain a competitive edge.

Focusing on customer needs: A company that prioritizes the needs of its customers can gain a loyal
following, even in a crowded market.

Mastering Leverage:

To master leverage, a company must be able to use its opponent's strength against them. This
involves:

Partnering with larger companies: A smaller player can leverage the resources and customer base of
a larger partner to gain an advantage in the market.

Leveraging customer loyalty: A company that has a loyal customer base can use that loyalty to gain
an advantage over competitors.

Exploiting weaknesses: A company can gain an advantage by identifying and exploiting weaknesses
in a competitor's strategy or offerings.

Real-life examples of companies that implemented Judo strategy:

Airbnb - By focusing on the niche of short-term rentals, Airbnb was able to gain a foothold in the
hospitality industry and disrupt traditional hotel chains.

Warby Parker - By offering affordable, stylish eyewear directly to customers online, Warby Parker
was able to differentiate itself from traditional brick-and-mortar eyewear retailers.

Netflix - By leveraging its large customer base and data analytics capabilities, Netflix was able to
disrupt the traditional cable TV industry and become a dominant player in streaming entertainment.
Clusters
Clusters refer to geographic concentrations of interconnected businesses, specialized suppliers,
service providers, and associated institutions within a particular industry or field. Clusters enable
firms to work collaboratively and leverage shared resources and knowledge to achieve greater
efficiency, productivity, and innovation.

Why clusters are critical to competition:

Increasing productivity: Clusters allow firms to access a range of specialized resources, including
skilled labor, technology, and suppliers, which can help to improve productivity and reduce costs.

Driving direction and pace of innovation: Clusters promote innovation by enabling firms to
collaborate and share ideas, research, and development costs. They also facilitate access to academic
and research institutions, which can provide cutting-edge research and insights.

Stimulating formation of new business: Clusters can foster the creation of new businesses, as
entrepreneurs are attracted to the concentration of specialized resources, expertise, and potential
customers.

Implications for companies:

Choosing location: Companies need to carefully consider the location of their operations to ensure
they are located within a relevant cluster. This can provide access to specialized resources, potential
customers, and talent.

Engage locally in a cluster: Companies should seek to engage locally within the cluster, building
relationships with other firms, institutions, and stakeholders, and contributing to the local
ecosystem.

Upgrade the cluster: Companies can contribute to the development of the cluster by investing in
shared resources and infrastructure, and supporting initiatives that promote innovation and growth.

Working collectively: Companies can gain a competitive advantage by working collaboratively with
other firms in the cluster, sharing knowledge, best practices, and resources.
Examples

Silicon Valley: The concentration of high-tech firms in Silicon Valley has fostered a culture of
innovation and entrepreneurship, attracting talented individuals and facilitating the sharing of ideas
and expertise.

Hollywood: The film industry in Hollywood has developed a unique cluster, with a concentration of
studios, production houses, talent agencies, and specialized suppliers, enabling efficient and cost-
effective production of movies and TV shows.

Bangalore: Bangalore, India has developed a technology cluster, with a concentration of firms
specializing in software development and IT services. This cluster has attracted global clients and
helped to build India's reputation as a global technology hub.

In summary, clusters provide firms with access to specialized resources and promote collaboration
and innovation, making them critical to competition. Companies that understand how to leverage
clusters can gain a significant competitive advantage, by choosing the right location, engaging locally,
upgrading the cluster, and working collaboratively with other firms.

Strategies under uncertainty

Strategies under uncertainty refer to the approaches and plans that companies adopt to navigate
through unpredictable or ambiguous environments. Dynamic competitive strategies involve
continually adjusting and adapting to changes in the market to maintain a competitive advantage.
Some examples of uncertain factors that companies may face include changes in consumer behavior,
technological advancements, political instability, and economic fluctuations.

Challenges in implementing strategies under uncertainty in dynamic competitive environments

include:

Lack of information: In uncertain environments, companies may not have access to reliable data or
accurate market insights, making it difficult to make informed decisions.

Rapidly changing market conditions: Market conditions can change rapidly in uncertain
environments, and companies need to be agile and adaptable to respond effectively.

Complex interdependencies: Uncertainty can lead to complex interdependencies between different

factors in the market, making it challenging to identify cause-and-effect relationships and plan
accordingly.

Resource constraints: In uncertain environments, companies may face resource constraints,

including limited financial resources, personnel, and technology.

High levels of competition: Uncertainty often leads to increased competition, as companies compete
for market share and attempt to gain an advantage.

Short-term focus: Uncertainty can lead to a short-term focus on immediate goals and objectives,
rather than long-term strategic planning.

Risk aversion: Companies may become risk-averse in uncertain environments, leading to a reluctance
to make bold decisions or take calculated risks.
Lack of alignment: Uncertainty can lead to a lack of alignment within organizations, with different
departments or individuals pursuing different goals and objectives.
Under Level 1 Uncertainty, where the situation is fairly predictable, and there is a low degree of
uncertainty, the strategy should focus on maintaining the current position and exploiting existing
opportunities to achieve incremental growth.

Analysis and Strategic Posture:

The first step is to conduct a thorough analysis of the business environment, including the
competition, customer needs, and market trends. This analysis should be used to identify areas of
strength and weakness in the organization and determine which opportunities are worth pursuing.

Based on this analysis, the organization should adopt a strategic posture that emphasizes the
maintenance of the current position while taking advantage of incremental opportunities. This could
involve focusing on operational efficiency, cost control, and customer service to maintain a
competitive edge while identifying and pursuing opportunities for growth in existing markets.

Strategy Under Level 1 Uncertainty:

Under Level 1 Uncertainty, the strategic intent or posture should focus on incremental growth and
improving operational efficiency. Some strategies that could be employed include:

Expanding product lines: Expanding the range of products offered can help increase sales and
profitability. This could involve introducing new products that complement existing offerings or
developing new products that meet customer needs.

Market penetration: Increasing market share by targeting existing customers through targeted
marketing and advertising campaigns can help to increase sales and profitability.

Geographic expansion: Expanding into new geographic regions can help to diversify the customer
base and reduce dependence on a single market.

Operational efficiency: Improving operational efficiency can help to reduce costs and improve
profitability. This could involve streamlining processes, reducing waste, and adopting new
technologies to improve efficiency.

Overall, the strategy under Level 1 Uncertainty should focus on maintaining the current position
while pursuing incremental opportunities for growth. This can help to ensure the long-term
sustainability of the business and position it for success in the future.

Under Level 2 Uncertainty, where the situation is less predictable, and there is a higher degree of
uncertainty, the strategy should focus on being more flexible and adaptable to changing
circumstances. This involves using scenario planning and agile methodologies to make decisions.

Analysis:

The first step is to conduct a thorough analysis of the business environment, including the
competition, customer needs, and market trends. This analysis should be used to identify potential
risks and opportunities that the organization may face in the future.

Based on this analysis, the organization should develop different scenarios that represent different
possible outcomes. Each scenario should be evaluated based on the organization's strengths,
weaknesses, and capabilities to determine which ones are most likely and which ones are most
impactful.
Strategy Under Level 2 Uncertainty:

Under Level 2 Uncertainty, the strategic intent or posture should focus on being flexible and
adaptable to changing circumstances. Some strategies that could be employed include:

Scenario Planning: Developing different scenarios that represent different possible outcomes can
help the organization to be better prepared for unexpected changes in the business environment.

Agile Methodologies: Adopting agile methodologies can help the organization to be more flexible
and responsive to changes in customer needs, market trends, and other external factors.

Innovation: Investing in innovation can help the organization to develop new products and services
that meet emerging customer needs and differentiate from competitors.

Partnerships and Collaborations: Forming partnerships and collaborations with other organizations
can help the organization to leverage their expertise and resources to pursue new opportunities.

Overall, the strategy under Level 2 Uncertainty should focus on being flexible and adaptable to
changing circumstances. This can help the organization to navigate the uncertainties of the business
environment and position it for success in the future.

Under Level 3 Uncertainty, the situation is highly unpredictable, and there is a significant degree of
uncertainty. The strategy should focus on being highly adaptive and experimenting with different
strategies and approaches to see what works best. Additionally, it may be helpful to seek input from
a diverse range of stakeholders to get different perspectives on the situation.

Strategic Intent/Posture:

Under Level 3 Uncertainty, the strategic intent or posture should focus on being highly adaptive and
experimental in nature. The organization should be prepared to pivot quickly and make changes
based on feedback from customers, stakeholders, and other sources.

Here are some strategies that could be employed:

Experimentation: Experimenting with different strategies and approaches can help the organization
to identify what works best in the current situation. This could involve testing new products or
services, changing pricing strategies, or experimenting with new marketing tactics.

Scenario Planning: Scenario planning can help the organization to anticipate potential outcomes and
develop plans for each scenario.

Innovation: Investing in innovation can help the organization to develop new products and services
that meet emerging customer needs and differentiate from competitors.

Collaboration and Partnerships: Forming partnerships and collaborations with other organizations
can help the organization to leverage their expertise and resources to pursue new opportunities.

Agility: Adopting agile methodologies can help the organization to be more flexible and responsive
to changes in customer needs, market trends, and other external factors.

Overall, the strategy under Level 3 Uncertainty should focus on being highly adaptive and
experimental. The organization should be willing to take calculated risks and make changes quickly
based on feedback from stakeholders. This can help the organization to navigate the uncertainties of
the business environment and position it for success in the future.

Under Level 4 Uncertainty, the situation is extremely volatile and unpredictable, and there is a high
degree of uncertainty. The strategy should focus on survival and resilience by reducing risk exposure
and increasing agility.

Strategic Intent/Posture:

Under Level 4 Uncertainty, the strategic intent or posture should focus on survival and resilience. The
organization should be prepared to adapt quickly to changing circumstances and focus on reducing
risk exposure.

Here are some strategies that could be employed:

Risk Reduction: Reducing risk exposure by diversifying the customer base, reducing debt, and
improving operational efficiency can help the organization to weather unpredictable circumstances.

Cost Reduction: Reducing costs through cost-cutting measures, such as reducing unnecessary
expenses and streamlining processes, can help the organization to conserve resources.

Agility: Adopting agile methodologies can help the organization to be more flexible and responsive
to changes in customer needs, market trends, and other external factors.

Innovation: Investing in innovation can help the organization to develop new products and services
that meet emerging customer needs and differentiate from competitors.

Collaboration and Partnerships: Forming partnerships and collaborations with other organizations
can help the organization to leverage their expertise and resources to pursue new opportunities.

Overall, the strategy under Level 4 Uncertainty should focus on survival and resilience. The
organization should prioritize risk reduction, cost reduction, and agility, while also remaining open to
opportunities for innovation and collaboration. This can help the organization to navigate the
uncertainties of the business environment and position it for long-term success.

Game Theory
Game theory is a mathematical framework that is used to study and analyze the strategic
interactions between multiple players in a decision-making context. In dynamic competitive strategy,
game theory is used to model and analyze the strategic interactions among competitors in an
industry over time.

In dynamic competitive strategy, firms must make strategic decisions in an uncertain and changing
environment, where the actions of competitors can have a significant impact on their own
profitability. Game theory provides a framework for understanding how firms make decisions in such
an environment and how their decisions affect the decisions of other firms.

One important concept in dynamic competitive strategy is the idea of a Nash equilibrium. A Nash
equilibrium is a situation in which each player is making the best decision possible given the
decisions of the other players. In other words, no player can improve their position by changing their
strategy if the other players do not change their strategies as well. Nash equilibria are important
because they provide a stable outcome for the game, where no player has an incentive to change
their strategy.

Another important concept in dynamic competitive strategy is the idea of a dominant strategy. A
dominant strategy is a strategy that is the best choice for a player, regardless of the choices made by
other players. In other words, a dominant strategy is always the best strategy for a player to choose,
regardless of the situation or the strategies chosen by other players.

Game theory is a powerful tool for understanding the strategic interactions between firms in a
dynamic competitive environment. By modeling these interactions and analyzing the resulting
outcomes, firms can make more informed decisions and develop more effective strategies.

There are two types of games that can be played in dynamic competitive strategy: rule-based games
and free-wheeling games. Rule-based games involve players following a set of predefined rules and
strategies, while free-wheeling games involve players making decisions based on their own individual
strategies.

Value net is a strategic tool used in dynamic competitive strategy to analyze the relationships and
interactions between different players in an industry. It is a graphical representation of the value
created and captured by each player, as well as the relationships between them. The value net
includes four key players: suppliers, customers, substitutors, and complementors.

Suppliers are players who provide the inputs necessary for the production of goods and services.
Customers are players who purchase and consume these goods and services. Substitutors are players
who offer alternative products or services that can replace the offerings of the other players.
Complementors are players who provide products or services that enhance or improve the offerings
of the other players.

The interactions between players in a value net can be divided into three dimensions:

Vertical Dimension: This dimension includes the relationships between suppliers and customers. In
this dimension, the players are connected through a supply chain, where suppliers provide inputs to
manufacturers, who then sell their products to customers. The relationships in this dimension are
primarily based on the exchange of goods and services.

Horizontal Dimension: This dimension includes the relationships between competitors. In this
dimension, the players are connected through the competition for customers and market share. The
relationships in this dimension are primarily based on the competition for market dominance.
Substitutors and Complementors Dimension: This dimension includes the relationships between
players who offer alternative or complementary products or services. Substitutors are players who
offer alternatives to the products or services of other players, while complementors offer products or
services that enhance or improve the offerings of other players.

The elements of a value net include:

In game theory, there are several ways in which strategic interactions between players can be
analyzed, including changing the players, changing the added value, changing the rules, changing
tactics or perception, and changing the scope. Each of these factors can have a significant impact on
the strategic interactions between players, and firms can use game theory to develop more effective
strategies and make better-informed decisions.

Changing the players: When a new player enters a market, the existing players may need to adjust
their strategies to account for the new entrant. Alternatively, if a player exits a market, the remaining
players may need to adjust their strategies to account for the loss of competition or the need to
serve new customers. For example, if a new airline enters a market, the existing airlines may need to
adjust their prices, routes, or services to compete with the new entrant.

Changing the added value: The added value in a game refers to the value that a player adds to the
overall system. If a player introduces a new product or service that adds value to the overall system,
it may change the strategies of other players who need to adapt to the new value proposition.
Alternatively, if a player reduces the value they provide, it may change the strategies of other players
who need to adapt to the new environment. For example, if a company introduces a new technology
that improves efficiency, other companies may need to adopt the same technology to remain
competitive.

Changing the rules: Changing the rules of a game can have a significant impact on the behavior of
players. If a regulatory body introduces new rules that affect the behavior of players, it may change
the strategies of players who need to comply with the new regulations. Alternatively, if players
collude to change the rules of the game in their favor, it may result in a less competitive
environment. For example, if a government introduces new tax regulations, companies may need to
adjust their pricing strategies to account for the new taxes.

Changing tactics or perception: Changing tactics or perception refers to changes in a player's

behavior or how they are perceived by other players. If a player changes their marketing tactics or
messaging, it may change the behavior of other players who need to respond to the new messaging.
Alternatively, if a player is perceived to be more or less competitive, it may change the behavior of
other players who need to adjust their strategies accordingly. For example, if a company introduces a
new advertising campaign, other companies may need to adjust their marketing strategies to remain
competitive.

Changing the scope: Changing the scope refers to changes in the size or focus of a player's
operations. If a player expands their operations into a new market, it may change the behavior of
other players who need to compete in the new market. Alternatively, if a player narrows their focus
to a specific niche, it may change the behavior of other players who need to adjust their strategies to
compete in the remaining market. For example, if a company expands its product line, other
companies may need to adjust their product offerings to remain competitive.
Discuss how the business dimensions (as used in strategy palette), are impacted for

Automotive Industry:

Predictability: The automotive industry has traditionally been a relatively predictable industry, with
stable demand and long product life cycles. However, the rise of electric vehicles, autonomous
driving, and changing consumer preferences has made the industry more unpredictable in recent
years. Automakers need to be able to anticipate and respond to these changes to remain
competitive.

Malleability: The automotive industry is a complex and highly regulated industry that is difficult to
shape. Automakers are subject to a wide range of government regulations related to safety,
emissions, and other issues, as well as intense competition and supply chain challenges. However,
automakers can shape the industry through innovation in areas such as electrification, connectivity,
and autonomous driving.

Harshness: The automotive industry is a highly competitive industry with low profit margins and high
fixed costs. The industry is also subject to significant economic and geopolitical risks, such as
fluctuations in oil prices, trade disputes, and global economic downturns. Automakers need to be
able to withstand these risks to survive.

II. IT Industry:

Predictability: The IT industry is a highly unpredictable industry, with rapidly changing technology
and shifting consumer preferences. IT companies need to be able to anticipate and respond to these
changes to remain competitive. However, the industry also offers significant opportunities for growth
and innovation.

Malleability: The IT industry is a highly malleable industry that can be shaped through innovation and
collaboration. IT companies can develop new products and services, forge partnerships with other
companies, and work with governments and other stakeholders to shape the regulatory
environment.

Harshness: The IT industry is a highly competitive industry with low barriers to entry and intense
competition. The industry is also subject to significant economic and geopolitical risks, such as data
breaches, cyber-attacks, and regulatory changes. IT companies need to be able to withstand these
risks to survive.

Under what conditions is Judo strategy relevant? What are the core principles of Judo Strategy?
For each core principle, provide one typical Judo strategy with an example.

Judo strategy is most relevant in situations where a company is smaller and weaker than its
competitors, and therefore cannot compete directly in terms of resources or market power. The core
principles of Judo strategy are movement, balance, and leverage.

Movement: The principle of movement in Judo strategy involves being agile and quick to respond to
changing market conditions. A typical Judo strategy for movement is to enter new markets where the
larger competitors have not yet established a strong presence. For example, a small startup that
offers a unique product or service could enter a new market where there are no dominant players
and quickly establish a foothold.
Balance: The principle of balance in Judo strategy involves finding and exploiting the weaknesses of
larger competitors. A typical Judo strategy for balance is to focus on a niche market where the larger
competitors are not as strong. For example, a small technology company could focus on a specific
industry vertical where the larger competitors have not yet established a strong presence, and offer
tailored solutions to meet the unique needs of that market.

Leverage: The principle of leverage in Judo strategy involves using the strengths of larger competitors
against them. A typical Judo strategy for leverage is to partner with a larger competitor to gain access
to their resources, while also providing them with a unique offering that they do not currently have.
For example, a small startup could partner with a large corporation to develop and market a new
product, leveraging the resources and distribution channels of the larger company, while also
providing them with a new and innovative offering to differentiate themselves from their
competitors.

Rest past year paper questions are covered in the notes. Direct questions are asked with examples or
current market scenario (Eg last year it was all related to COVID)

Last 2 years paper were exactly same.