Shares of Shopify (SHOP) plummeted on Tuesday morning, even though the e-commerce platform posted third-quarter earnings and revenues beats. This leaves many investors focused on the bold claims made by notable short-seller Citron Research.
Shares of Shopify (SHOP) surged to a new all-time on Monday. But with no breaking news to speak of, it might be time to take a look at what exactly the young Canadian company does that has investors hopping on board.
В шестом матче «Оттава Сенаторс» обыграл «Питсбург Пингвинс» // Второй финалист Кубка Стэнли определится в пятницу
Едва ли не в самой ожидаемой встрече в рамках Кубка Стэнли — шестом матче play-off Восточной конференции — в ночь на среду «Оттава Сенаторс» на льду Canadian Tire Centre в столице Канады победил «Питсбург Пингвинс» — 2:1. Таким образом, счет в серии между командами сравнялся — 3:3, и соперник «Нэшвилл Предаторс», который первым вышел в финал play-off НХЛ, определится в ночь на пятницу в Питсбурге.
The CEO of a large Australian company called me to relay a particular strategy development problem his firm was facing, and ask for my advice. The company was an eager user of my “cascading choices” framework for strategy that I have used for decades and written about extensively, most prominently in the 2013 book I wrote, with friend and colleague A.G. Lafley, called Playing to Win. My Australian friend explained that each of his five business unit presidents was using the Strategy Choice Cascade, and that all of them had gotten stuck in the same place. They had chosen a Winning Aspiration and had settled on a Where to Play choice. But all of them were stuck at the How to Win box. It is no surprise, I told my friend, that they have gotten stuck. It is because they considered Where to Play without reference to How to Win. I’ve heard variants of this over and over. Although I have always emphasized that these five choices have to link together and reinforce each other, hence the arrows flowing back and forth between the boxes, it has become clear to me that I haven’t done a good enough job of making this point, especially as it relates to the choices of Where to Play and How to Win. The challenge here is that both are linked, and together they are the heart of strategy; without a great Where to Play and How to Win combination, you can’t possibly have a worthwhile strategy. Of course, Where to Play and How to Win has to link with and reinforce an inspiring Winning Aspiration. And Capabilities and Management Systems act as a reality check on the Where to Play and How to Win choice. If you can’t identify a set of Capabilities and Management Systems that you currently have, or can reasonably build, to make the Where to Play and How to Win choice come to fruition, it is a fantasy, not a strategy. Many people ask me why Capabilities and Management Systems are part of strategy when they are really elements of execution. That is yet another manifestation of the widespread, artificial, and unhelpful attempt to distinguish between choices that are “strategic” and ones that are “executional” or “tactical.” Remember that, regardless of what name you give them, these choices are a critical part of the integrated set of five choices that are necessary to successfully guide the actions of an organization. I had to tell my Australian friend that locking and loading on Where to Play choices, rather than setting the table for a great discussion of How to Win, actually makes it virtually impossible to have a productive consideration of How to Win. That is because no meaningful Where to Play choice exists outside the context of a particular How to Win plan. An infinite number of Where to Play choices are possible, and equally meritorious — before considering each’s How to Win. In other words, there aren’t inherently strong and weak Where to Play choices. They are only strong or weak in the context of a particular How to Win choice. Therefore, making lists of Where to Play choices before considering How to Win choices has zero value in strategy. For example, Uber made a Where to Play choice that included China because it’s a huge and important market. But being huge and important didn’t make that choice inherently meritorious. It would have been meritorious only if there had been a clear How to Win as well — which it appears there never was. Microsoft made a Where to Play choice to get into smartphone hardware (with its acquisition of Nokia’s handset business) because it was a huge and growing market, seemingly adjacent to Microsoft’s own, but it had no useful conception of how that would be twinned with a How to Win — and it lost spectacularly. P&G made a Where to Play choice to get into the huge, profitable, and growing pharmaceutical business with the acquisition of Norwich Eaton, in 1982. While it performed decently in the business, it divested the business in 2009 because, in those nearly two decades, it came to realize that it could play but never win in that still-exciting Where to Play. Moreover, no meaningful How to Win choice exists outside the context of a particular Where to Play. Despite what many think, there are not generically great ways to win — e.g., being a first mover or a fast follower or a branded player or a cost leader. All How to Win choices are useful, or not, depending on the Where to Play with which they are paired. A How to Win choice based on superior scale is not going to be useful if the Where to Play choice is to concentrate on a narrow niche — because that would undermine an attempted scale advantage. Undoubtedly, Uber thought its How to Win — having a easy-to-use ride-hailing app for users twinned with a vehicle for making extra money for drivers — would work well in any Where to Play. But it didn’t work in the Where to Play of China. It turned out that Uber’s How to Win had a lot to do with building a first-mover advantage in markets like the U.S.; when Uber was a late entrant, the Where to Play wasn’t a simple extension, and it exited after losing convincingly to first mover Didi. Perhaps Microsoft felt that its How to Win of having strong corporate relationships and a huge installed base of software users would extend nicely into smartphones, but it most assuredly didn’t. As a Canadian, I can’t help but recall the many Canadian retailers with powerful How to Wins in Canada (Tim Hortons, Canadian Tire, Jean Coutu) that simply didn’t translate to a Where to Play in the U.S. Perhaps there is some solace, however, in retailer Target’s disastrous attempt to extend its U.S. How to Win into the Canadian Where to Play — turnabout is, I guess, fair play. The only productive, intelligent way to generate possibilities for strategy choice is to consider matched pairs of Where to Play and How to Win choices. Generate a variety of pairs and then ask about each: Can it be linked to an inspiring, attractive Winning Aspiration? Do we currently have, or can we reasonably build, the capabilities that would be necessary to win where we would play? Can we create the Management Systems that would need to be in place to support the building and maintenance of the necessary capabilities? Those Where to Play and How to Win possibilities for which these questions can plausibly be answered in the affirmative should be taken forward for more consideration and exploration. For the great success stories of our time, the tight match of Where to Play and How to Win is immediately obvious. USAA sells insurance only to military personnel, veterans, and their families — and tailors its offerings brilliantly and tightly to the needs of those in that sphere, so much so that its customer satisfaction scores are off the charts. Vanguard sells index mutual funds/ETFs to customers who don’t believe that active management is helpful to the performance of their investments. With that tight Where to Play, it can win by working to achieve the lowest cost position in the business. Google wins by organizing the world’s information, but to do that it has to play across the broadest swath of search. It doesn’t matter whether the strategic question is to aim broadly or narrowly, or to pursue low costs or differentiation. What does matter is that the answers are a perfectly matched pair.