Shaping Strategy | YSNAS

Shaping Strategy

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What

Shaping firms mold or reshape an industry by influencing the development of a market in its favor through coordination with other players. A shaping approach both permits and requires a firm to collaborate with others in a diverse ecosystem that distributes risk, supplies complementary capabilities and resources, and builds the market quickly through strength in numbers. A shaping firm operates with a high degree of unpredictability because it faces an early stage of industry evolution and because of the participation of multiple stakeholders that it must influence but cannot control.

When

Deploy a shaping strategy when there is an opportunity to write or rewrite the rules of an industry at a nascent stage of its development. Highly fragmented, young, dynamic industries; freshly disrupted industries; and emerging markets are all ripe for shaping. The opportunities are intrinsically unpredictable regarding size, growth rates, and profitability, and are malleable because of low barriers to entry and the unfamiliarity of regulators with new products. Timing and positioning are key. Shaping strategists must seize an inflection point in the early development of a market or in the disruption of an existing one and must also have enough influence to attract other powerful stakeholders to its ecosystem.

How

Shaping firms engage other stakeholders to create a shared vision at the right point in time, to build a platform through which they influence and orchestrate collaboration, and, finally, to evolve the platform and ecosystem by scaling it and keeping it flexible. Therefore, the way to win is through codevelopment of the market and industry by multiple players. As with the adaptive approach, the shaping strategy eventually emerges from continuous iteration of three elements: repeated engagement, orchestration, and evolution of the ecosystem.

Nature is rife with examples of mutually beneficial shaping strategies, like the co-evolution of species and animals feeding on, and simultaneously dispersing, plant seeds. The organisms involved in fixing nitrogen provide a particularly fascinating example of such a win-win relationship, which improves the chances of survival for both of the species involved.

Legumes, like all plants, need nitrogen to grow, and they usually get it from the soil in the form of ammonium. When the soil is deficient in ammonium, however, legumes team up with Rhizobium bacteria which can fix nitrogen in the context of a symbiotic relationship with the legume.

Legumes secrete special signal molecules that attract rhizobia and trigger them to secrete so-called nod factors. The nod factors, in turn, trigger the legumes to form nodules in their root systems, which can house bacteria. The legumes then provide nutrients to the rhizobia, and, in return, get the nitrogen that allows them to grow more quickly. The plants “police” the resulting root nodules, to ensure that the bacteria do not use nutrients without fulfilling their part of the bargain. Legumes reduce nodule growth and restrict nutrient flows to “cheating” bacteria and only select the strains that refrain from cheating to be allowed to enter nodules.

Legumes therefore mirror the steps that are required to sustain a shaping strategy: they engage symbiotic species, orchestrate a win-win relationship by exchanging nutrients, and dynamically adjust the resulting collaboration to ensure the overall health of the symbiosis.

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