Course Name: Design Thinking in Business
Effective date: 1 May 2023
Week 1
Understanding Design Thinking
LO 1: Understand the imperative of
Design Thinking in Business
1. Students are able to understand the
strategy design concept
2. Students are able to explain the
group design strategy
3. Students are able to explain the
challenges of traditional strategy
development
OUTLINE
1.1. The concept of strategy
1.2. Traditional Strategy Development Processes
1.3. The challenges of Traditional Strategy Development
1.4. Design Thinking Approach
1.1. The concept of strategy
Blockbuster VS Netflix
1. In the 1990s, Blockbuster was the
market leader in movie rentals in the
United States of America.
2. In 2010 Blockbuster had to file for
bankruptcy protection. So, what went
wrong? The quick answer to that
question is Netflix.
3. But that is too short-sighted.
Blockbuster failed to realize the changing
environment and adjust its strategy
accordingly
Approaches to business strategy focusing
on three complementary elements
1. The environmental
approaches
2. The capabilities- or
resources-based
approaches
3. The customer-centric
approaches
Strategy Design Process
The design thinking framework formalizes strategy development by offering a
strategy design process supported by a common language addressing four key
questions:
(1) What customer needs, pain-points, and sought-after gains are currently
addressed or nor addressed, and what customers are not served?
(2) How can the identified needs and pain-points be addressed in a way that
customers are willing to pay for?
(3) What are the distinct capabilities and resources required to achieve a
sustainable competitive advantage in delivering upon the promises made,
that is, addressing the identified needs?
(4) How is the strategy ensuring that sustainable profits can be generated?
1.2. Traditional Strategy
Development Processes
Prescriptive School
• The oldest prescriptive school is the design school, advocated by
Chandler (1962), Ansoff (1965), and Andrews (1971).
The prescriptive design
school focuses on
matching internal
capabilities to external
opportunities. The core
framework used is the
SWOT analysis.
Prescriptive School
• The second prescriptive school, the planning school, advocated by
Steiner (1979)
Strategy development as an
analytical and linearly
convergent process. It
mainly relies on strategic
planning, which is how a
firm’s value chain is
configured and resources
are allocated, based on a set
of strategic directions.
Prescriptive School
• The third prescriptive school, mainly shaped by the work of Porter in
his two landmarked books Competitive Strategy (Porter 1980) and
Competitive Advantage (Porter 1985), is called the positioning school.
Focuses on context, using frameworks such
as the five forces model, rather than on
process or on planning. It defines strategy
as selecting from a constrained set of
competitive positions and implementing
the business logic behind them.
Descriptive school
The descriptive school towards strategy development places a higher
value on the content rather than the process. It focuses on what the
strategy represents rather than how it is derived. At least seven distinct
descriptive schools can be identified:
Cognitive Entrepreneurial Learning Political
School School School School
Cultural Environmental Configurational
School School School
1.3. The challenges of
Traditional Strategy
Development
1.3. The challenges of Traditional
Strategy Development
Four key challenges can be identified when trying to apply strategy
development processes based on traditional strategy school thinking,
whether prescriptive or descriptive, to the current fast-paced and ever-
changing business environment:
CUSTOMER
SPEED FOCUS COMPLEXITY OUTSOURCING
1.3. The challenges of Traditional
Strategy Development
Any successful strategy design process addressing the identified challenges, should exhibit six key
characteristics:
1 Consistent with the strategy design school, the strategy design process should be top-down,
starting with designing and validation a sound foundation.
2 The strategy design process should follow an agile, just in time, allowing for refinements and
pivoting along the way.
3 The focus should be put on designing the future rather than analyzing the past, notwithstanding
learning from historical successes and failures.
4 To ensure buy-in and subsequent successful implementation, the strategy design process should
integrate stakeholders early in the design of the strategy, especially at the validation step.
5 There does not exist not a one size fits it all approach to strategy design. Any successful strategy
design process must allow for different types of strategies, that is, customer-centric strategies,
6 innovation-oriented strategies, capabilities-based strategies, or cost-driven strategies.
The strategy design process must put the targeted customers at the center of any strategy design
activity.
1.4. Design Thinking
Approach
Definition
Eric Ries – The Lean Startup:
“Co-designing products with customers is a better path to success than
writing a business plan”
Murray Cox:
“Design thinking is a people-centered, collaborative and action-orientated
way to understand, reframe and solve problems. It’s less about the look of
an item and more about the need that a product or service meets for
customers."
Eleanor Horowitz:
"Design Thinking is a mindset. Design Thinking is about having an intentional
process in order to get new, relevant solutions that create a positive impact. It’s
human-centered. It’s collaborative. It’s optimistic. It’s experimental."
Four quadrants defining the design
thinking approach
Delivering Value to Customers
01 Desirable
To be successful, strategy
design must address four
categories of questions 02 Feasible
related to customers
(Brown 2009):
03
Viable
04
Distinct
REFERENCES
1. Diderich, Claude. (2020). Design thinking for strategy. Cham, Switzerland: Springer
International Publishing (Chapter 1)
2. https://www.mbaknol.com/strategic-management/prescriptive-and-descriptive-
schools-of-strategy/
3. https://www.easyproblemsolving.com/design-thinking
4. https://www.plays-in-business.com/design-thinking-what-it-is-why-it-works/
