Creating a competitive strategy

Following the strategic analysis and the TOWS analysis, we have at this stage a good overview of the possible strategic options that are available - Now comes the challenge of choosing and evaluating the potential strategies.

In the TOWS analysis we found a total of twelve strategies, which was narrowed down into four Maxi-Maxi (SO) strategies, in order to avoid strategic overload:

1. Develop new services based on a focus on convenience, similar to takeaway and ordering.

2. Invest more in data solutions

3. Develop a complete e-commerce web-based loyalty solution

4. Use market traction to capitalize on the limited amount of competitors

What is similar to all of these are that they are also intensifying strategies (Porter). In general strategies should be sharply defined and

81 of 87 7.1.1 New services to existing customers

The first strategy presented in the TOWS analysis is focused on developing new services to existing customers. This should be achieved based on MyLoyal’s strong and diverse team, combined with the opportunities of a loyalty industry in growth, a faster digital transition for the existing customers and an end-user focus on convenience over price.

Today MyLoyal operates with the Yellow Connect & Collaborate mindset. If the company should choose a strategic focus on developing new services for existing customers, this is well aligned with the existing mindset.

7.1.2 Invest in data

The second strategy is to focus the company around investments in the data offerings of the company. This means to allocate both financial and human resources towards this goal, and hence paying less focus on general product development, sales, and marketing.

This strategy combines the strengths of MyLoyal, as a company who has access and control of valuable payment transaction end-user data with the opportunities of collecting more data.

This strategy requires a change towards a Red Listen & Learn data-driven mindset, in order to execute properly. This means a different customer approach, from proactive to active, and where retainment of existing customers is valued over engagement as present in the yellow mindset.

This strategy holds high risks, as it requires a lot of resources, and the potential outcome is uncertain and difficult to tangibly calculate.

7.1.3 Develop E-commerce web-based loyalty solution

The third strategic option presented is for MyLoyal to transition their business based on market trends towards offering a complete e-commerce web-based loyalty solution. As MyLoyal today is only a loyalty app provider, this is significant product development, which serves the same customers but is within a different market, where the competition is significantly higher. The strategy is built on MyLoyal’s strong and diverse team, its proven organic growth, and its high quality IT suppliers, which combined can help materialize this

82 of 87 development. There are two ways for this strategy to work. First through developing new services made by reading the trends in the market, here the growth of convenience

solutions, and pivoting the strategic resources towards generating these new services and products in relation to the customers who they are created for. Here there is a high risk that pursuing the strategy will remove focus on the core business of MyLoyal, which is the loyalty apps. Following this strategy would be a similar transition as the move from

MyLoyal 1.0 with the MyLoyal App towards MyLoyal 2.0 with the creation of white-label loyalty apps for restaurant and retail chains. Secondly this could be pursued through funding, and through that gaining more resources to allocate to the project.

7.1.4 Use market traction to capitalize on the market

The final strategy is a pure focus on market capitalization based on the existing traction, in essence organic growth. This organic growth should be created through a higher focus on sales, at the cost of less focus on product development and data. This will be the strategy that believes that sales will create growth. Applying this strategy would move MyLoyal from a yellow mindset towards the Blue mindset of Promote & Sell. In order for this strategy to succeed there are two ways. One is to have patience and grow slowly organically, the second is to acquire additional funding. This is a strategy with a seemingly low risk, but there is the hidden risk of missed opportunity, as this would be a choice to ignore the opportunities that are clearly available in the market and choosing not to capitalize.

7.1.5 The competitive strategy

Isolated the mentioned strategies has potential, but with the aim of creating the best competitive strategy, a combination of the above mentioned are presented in the following section.

A pure focus on either of the above mentioned strategies will create a very different future for MyLoyal – and they are all associated with significant risk and potential.

In order to compete during the pandemic it is essential to be flexible, adaptable and human focused, in order to reap the opportunities and benefits that comes with the changing customer behaviour. There are many risks and uncertainties caused by the

83 of 87 pandemic, but now is also a great time to rise to the challenge, as the playing field has become more levelled, and everyone is more uncertain, which creates great opportunities to come out on top of the rest.

The presented competitive strategy for MyLoyal is therefore a holistic approach to invest in data, and develop new services based on market trends for convenience over price, with the aim of capitalizing and penetrating the danish loyalty market.

This will require a transition towards a Red Listen & Learn data-driven mindset for the new data solution, while maintaining the Yellow Connect & Collaborate during the transition towards the existing customers, with the aim at bettering the products for them. A pure focus on increased sales is therefore not recommended. The increased sales should be generated through a deeper data-driven understanding of the existing customers and the end-users. By improving the existing product through data, it will be possible to increase sales organically, since clearly defined data makes sales easier. If you can explain to the customers, that if they invest 125.000 kr. Into MyLoyal then they will generate 250.000 kr.

more in revenue per year, then it will become significantly easier to sell, and the long sales process will be reduced.

MyLoyal should not transition entirely towards developing a complete e-commerce web-based loyalty solution. But should continue to surveil the web e-commerce space, and have it in the roadmap through organic growth, or for the time when the company possible has to acquire more funding. For now that is not the focus, as the risks of doing this

organically is too high, as it is entering a new market with significantly higher levels of competition, and is distraction from the main business.

7.1.6 Changing mindset

As presented in the competitive strategy for MyLoyal, it is required to change the mindset of the company towards a data driven Red mindset based on Listen & Learn. There are consequences both a good and challenging related to changing the mindset of the organisation. The process can be difficult, as it requires the organization to reflect upon who they are and who they serve. It is required to understand where the company is

84 of 87 today, in order to change it, and to be made aware of the assumptions that control the strategy of the company. Each of the four managerial mindsets creates unique

organizational structures, associated to workflows, customer interactions and innovation.

It is possible to have several mindsets that each can supplement the competitive strategy in its own way, as presented above. Having several mindsets can help creating new innovation and will broaden the amount of perspectives. But it is also crucial that the fundamental competitive strategy is not many-sided. In order for the strategy to be effectively used, it has to be able to sharply dive into goals and ways of controlling and measuring success, and enabling the company to be consistent in relation to customer interaction.

Becoming aware of what mindset operates at present, and deciding who the company needs to be, by being brave enough to challenge the underlying assumptions, is a prerequisite for succeeding with the competitive strategy. This reflection will help the organization create shared value for both MyLoyal, the customers, and the end-users.

MyLoyal will create growth and further advance its services and in the process of doing so, will help retailers and restaurant chains fit into the new world affected by the pandemic.

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