Delta Model

Articulating and implementing effective Extended Enterprise strategies. Explanation of Strategic Triangle of Arnoldo C. Hax and Dean L. Wilde II. Delta Model.

The Delta Model is a strategy framework that was developed by Dean Wilde, along with other members of Dean & Company, and Arnoldo Hax of the MIT/Sloan School of Management. It aims at assisting managers in the articulation and implementation of effective corporate and business strategies.

The emergence of the Internet, with its revolutionary potential for communication, and the technologies surrounding e-business and e-commerce, make available some new options and tools that allow the feasibility of new business approaches.

Delta model: Extended Enterprise

Hax and Wilde II integrate the Competitive Advantage and Value Chain frameworks from Porter with the Resource-Based View on the Firm and complement those with new Extended Enterprise perspectives and with offering Total Customer Solutions.

Elements of the Delta model

1. Strategic Triangle: used for defining strategic positions that reflect new sources of profitability. Three strategic options: best product, customer solutions, and system lock-in.
2. Aligning these strategic options with a firm's activities and providing congruency between strategic direction and execution. Three fundamental processes are always present and are the repository of key strategic tasks: operational effectiveness, customer targeting, and innovation.
3. Adaptive processes: the most important processes of the company must be aligned to the chosen strategy. In this way progress can be made against the strategic agenda and a too generic outcome can be avoided. The Delta Model identifies the core processes of the business and provides a guide for how they need to function differently to achieve different strategic positions capable of continually responding to an uncertain environment.
4. Metrics. Metrics providing overview should be supplemented with granular metrics.

Customers in the Delta Model

Hax and Wilde believe that a firm owes itself to its customers. They are the ultimate repository of all the firm's activities. At the heart of management and, certainly, at the heart of strategy, resides the customer. We have to serve the customer in a distinctive way if we expect to enjoy superior performance. Running a business means to attract, to satisfy, and to retain the customer.

The intimacy and connectivity of the networked economy offer opportunities to create competitive positions based upon the structure of the customer relationship.

A business can establish an unbreakable link, deep knowledge, and close relationship that Hax and Wilde name: "Customer Bonding". These bonds can be directly formed with the customer. They can also be formed indirectly through complementors the customer wishes to access.

Both are powerful sources of margin and sustainability. The bonds represent investments made by customers and complementors in and around the business' product.

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Compare with The Delta Model: Competitive Advantage  |  Strategic Types  |  Rule of Three  |  Value Chain  |  Resource-Based View  |  Core Competence Prahalad  |  Porter Competitive Forces  |  The Value Net, Co-opetition  |  Just-in-time  |  TDC Matrix  |  Outsourcing  |  Impact/Value framework  |  Strategic Thrusts  |  Bricks and Clicks  |  Twelve Principles of the Network Economy

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