Strategy on Wheels

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In the Summer 2009 edition of Business Strategy Review, The London Business School
journal has highlighted our seminal white paper on strategy formulation in a converging
telecommunications sector. Written by Didier Bonnet, Capgemini’s Global Head of
TME Sector Consulting and George Yip, Professor of Global Strategy and Management
at Erasmus University in the Netherlands, the article explains why, in fast-moving
technology-based industries, business models and strategic planning must converge
into strategic formulation if companies are to succeed.

The authors believe the terms ‘strategy’ and ‘business model’ are separate but
complementary business concepts. Furthermore, they write that strategy can be
formulated both within an existing business model and when a company needs to
switch from one business model to another. However, two main disruptive factors
make setting a strategy even more challenging; the constant flow of technological
innovation and the ever-increasing convergence of traditionally distinct industries.
Together, these factors also change the competitive landscape, with businesses
from previously different markets now competing in the same space.

As a result, it is more difficult than ever for companies to determine a clear
strategy. To overcome this challenge, the paper recommends dynamic strategic screening
to assess technological change on existing business models and to predict the
implications of convergence at both industry and product/service levels. In conclusion,
strategic agility – the ability to constantly sense, assess and react to market
conditions – is far more relevant than sustainability today.

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