Strategic Management Frameworks and the Delta Model - Putting Customers before Products (PDF)

In spite of the enormous proliferation of competing schemes in the business strategy literature, there are two fundamental paradigms that have emerged as the most influential in the last two decades. First, Competitive Positioning, as proposed by Michael Porter from the Harvard Business School in the 1980s, and, second, the Resource-Based View of the Firm that evolved during the 1990s.

Porter's framework and the Resource-Based View of the Firm basically perceived the primary role of strategy as achieving a unique competitive advantage. I emphasize the word competitive because that seems to us to be the common principle. In this sense, the objective of strategy becomes beating your competitor either by excelling in the activities of your value chain that allows you to establish a dominant position in your industry, or through the mobilization of unique resources and capabilities.

Although these frameworks have often been presented as conflicting views, since they emphasize different dimensions of strategy, they can richly complement each other. However, they both can be enhanced by adding a missing perspective: the Customer. Surprisingly the customer does not emerge as the key player in either of these two frameworks. If you take Porter literally, the customer is represented by the "Buyer" – one of the Five Forces Model – whose bargaining power we should resist or diminish. In that respect, the customer constitutes an additional element of the rivalry that we need to overcome. In the Resource-Based View of the Firm, there is no explicit mention of the customer.

By contrast, the Delta Model places the customer at the center of strategy, and defines the essence of strategy to be achieving customer bonding. I also feel that the new technology surrounding the Internet provides novel and effective ways to link to the customer and to the extended enterprise, opening up new sources of strategic positioning that should be properly evaluated.