Strategy Management Cycle

1. Who are we? – Mission, Vision, Value

2. Where are we? – Environmental Analysis: External (PESTLE, Porter’s Diamond, 5 Forces) & Internal (SWOT)
3. Where do we want to go? – Strategy (Ex. Porter’s Generic Strategy), Business Model
4. How can we get there? BCG, Strategic Actions, Blue Ocean, Disruptive innovation
5. How do we do it? Strategic/Scenario Planning, Strategic Alignment, BMC, 7S, Kotter (if needed), Theory O vs. E
6. How are we doing?

Organization’s Aspirations. WHO ARE WE?

• Mission – Why we exist

• Vision – What future we want to create
• Values – What is important to us (how we operate)
• These 3 shows how a company will position itself in the industry to achieve superior returns vs competitors

Campbell and Yeung

Case Analysis Framework (PACADI: 6 step decision making approach)

1. Problem Definition
2. Alternatives
3. Criteria
4. Analysis
5. Decision
6. Implementation Plan

Environmental Analysis. WHERE ARE WE?

1. Industrial Organization Theory

o Country Analysis – PESTLE, Porter’s Diamond
▪ Opportunities, Threats, Market attractiveness, Environment conducive to competitive advantage
o Industry Analysis – Porter’s 5 Forces

2. Resource-Based View Theory

o Internal analysis
• Porter’s Diamond Model – determinants that create the national environment which companies are born and learn
how to compete

• Industry Analysis: Porter’s 5 Forces – Opportunities & threats, industry attractiveness, industry position, stability
o Defend or Influence?

• External Environment Analysis:

o PESTLE
o PORTER’S DIAMOND
o PORTER’S 5 FORCES
o These 3 leads to analyzing the company’s competitive
advantage relative to the external factors
(industrial organization theory)

• Internal Environment Analysis:

o Strengths Capabilities + Gaps Barriers (Weaknesses) = Competitive Advantage (Resource-based view)
▪ Is it valuable?
▪ Is it rare?
▪ Is it difficult to imitate?
▪ Is it not easily substitutable?
WHERE DO WE WANT TO GO?

• Business Model – leads to strategy. Integrated choices that will position the company in the industry to achieve and
sustain competitive advantage over competitors

• Porter’s Generic Strategy

o Possible Risk Factors
▪ Imitation by competitors
▪ Technology change
▪ Value to buyer erodes
▪ Buyers become homogenous

HOW CAN WE GET THERE?

BCG Matrix

• Industry position
• Investment Decisions
• Strategic Actions

STRATEGIC ACTIONS

• Forward – distribution, retailers (outbound)

• Backward – Suppliers (inbound)
• Horizontal – competitors
LONG TERM OBJECTIVES

Blue Ocean Strategy

• Value innovation
• Create uncontested new market space
• Make competition irrelevant
• Break the value/cost trade off

ERRC GRID: 4-Action Framework

• Cost:
o Eliminate – factors the industry takes for granted
o Reduce – factors that can be reduced well below standard
• Buyer’s Value
o Raise – factors that can be raised well above standards
o Create – factors that the industry has never offered

Disruptive Innovation – PROCESS

• Business model that TECHNOLOGY enables that creates the disruptive impact.

1. Sustaining innovation - Incumbents continue to innovate to appeal to their most profitable customers IGNORING
those down market
2. New Entrants FOCUS on this ignored or new market by offering simpler and cheaper products
3. Incumbents DO NOT respond to the new entrants since markets are different
4. Incumbents are DISPLACED
STRATEGIC PLANNING AND IMPLEMENTATION (HOW DO WE DO IT?)

TACTICAL PLANNING

• Translating STRATEGIC PILLARS into ACTIONABLE PROJECTS over a defined period (marketing objectives)
• It identifies the DETAILS of the company’s PROCESSES AND OPERATIONS incl. the roles and responsibilities of
employees and REQUIRED RESOURCES.

STRATEGIC ALIGNMENT

• ALL ELEMENTS of the businesses are ARRANGED in such a way as the BEST SUPPORT the fulfilment of its LONG-
TERM PURPOSE.
o Strategy – HOW the business will achieve its long-term goals.
o Organizational Capabilities – readiness to execute the strategy.
BUSINESS MODEL CANVAS

THE 7-S Model – Alignment, Consistency, Fit, Reinforcement

• Assess the wellbeing of 7 INTERNAL factors to determine

If the company has a structural support to be successful.
• Hard Elements – influenced by management
o Strategy – ideally long-term
o Structure – corporate hierarchy
o Systems – daily SOP
• Soft Elements – company culture
o Staffing
o Skills
o Styles – management leadership approach
• Both elements should coincide with the
Company’s shared values and goals

Kotter Model – Change management, Execution Risk Management

• 8 Step model for leading change

1. Create sense of urgency – help others see the NEED for change. Communicate importance of acting immediately
2. Build a guiding coalition – to guide, coordinate, communicate activities
3. Form a strategic vision and initiatives – clarify how to future will be different from the past, how to make it a
reality via initiatives linked to vision
4. Enlist a volunteer army – large change scale is only possible with massive number of people rallying for a
common goal
5. Enable action by removing barriers – remove inefficient processes and hierarchies to provide freedom to work
across silos
6. Generate short-term wins – wins = results. These must be recognized, collected, and communicated to track
progress and energize volunteers to persist
7. Sustain acceleration – press harder after first successes. Increasing credibility improve systems, structures and
policies
8. Institute change – articulate the connections between new behaviors and organizational success – assuring they
continue until they become strong enough to replace old habits
BLUE OCEAN IMPLEMENTATION RISK.

• Organizational Risk – 4 key hurdles that block the implementation

o Tipping Point Leadership (TPL) – Change management, Execution Risk Management, Overcome the hurdles

• Management Risk – distrust and resentment can derail execution

o principles of Fair Processes – Change management, Execution Risk Management, Overcome the hurdles

• Strategy Execution
• Cracking the Code of Change

• Theory O – change based on organizational capability

• Theory E – change based on economic value

EX: