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Hugh G. Courtney, Jane Kirkland, and S. Patrick Viguerie - page 8 / 10





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The best companies supplement their shaping bets with options that allow them to change course quickly if necessary. Because trigger variables are often fairly simple to monitor in level two, it can be easy to adapt or reserve the right to play.

Strategy in level three’s range of futures

Shaping takes a different form in level three. If at level two shapers are trying to promote a discrete outcome, at level three they are simply trying to move the market in a general direction because they can identify only a range of possible outcomes. Consider the battle over standards for electronic-cash transactions. Mondex International, a consortium of financial-services providers and technology companies, is attempting to shape the future by establishing what it hopes will become universal e-cash standards. Its shaping posture is backed by big-bet investments in product development, infrastructure, and pilot experiments to speed customer acceptance. In contrast, regional banks, which don’t yet have the deep pockets and skills necessary to set standards for the e-payment market but want to be able to offer their customers the latest electronic services, are mainly choosing adapter strate- gies. An adapter posture at uncertainty levels three or four is often achieved primarily through investments in organizational capabilities designed to keep options open (exhibit).


A regional bank confronts the uncertainties in electronic commerce

Key areas of uncertainty:

  • Volume of electronic commerce on the Internet

  • Time line for consumer adoption of electronic payments

  • Type of primary payment vehicle (for instance, smart cards, e-cash)

  • Emerging structure of the industry

  • Degree of vertical integration among players

  • Role of banks, others in industry

Determination: Bank faces level 3 and level 4 uncertainties

Identify the nature and extent of residual uncertainties

Strategic objectives:

  • Defend current customer franchise from technology-based competitors

Choose a strategic posture

  • Capture new opportunities in fast-growing markets Overall posture: Reserve the right to play

Strategy management:

  • Monitor key trigger events (for instance, adoption rates for emerging products) and the behavior of nontraditional competitors such as telephone companies

Actively manage the strategy

  • Participate in industry consortia to reduce uncertainty

  • Routinely and frequently review the portfolio of actions available

Build a portfolio of actions


  • Pursue innovative

products that play to bank’s strengths (for instance, procurement cards or industry-specific payment products)

  • Offer leading-edge payment

products to high-value customer segments that are most vulnerable to competitors

Possible action: Form a small new-business unit to conduct R&D and monitor industry developments

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