What is Strategic Management? 2 The big picture of what your agency is doing and where it is going Helps determine where your organization is going over the next year or more Why is this important? Takes you outside the day-to-day activities of your organization or project and helps give you clarity about what you actually want to achieve and how to go about achieving it rather than a plan of action for day-to-day operations. Definition of Strategic Management 3 A disciplined effort to produce fundamental decisions and actions that would help to shape what an organization is and what it serves to do Ring and Perry (1985)
Definition of Strategic Management 4
A method for organizations to focus on maximizing their efforts using scarce resources available to them and exploit potential opportunities Poister and Streib (1994)
Definition of Strategic Management 5
A disciplined effort, which provides a systematic process to capture relevant information, which is crucial for setting up long-term directions delineated by specific goals, objectives and actions Bryson (1995)
Definition of Strategic Management 6
Explicit guide for future behaviour of the organization Mintzberg (2001)
7 Fundamental Objectives Effective planning: identifying what to do and ensuring that these are the right things to do
Efficient resource management: deciding how to do things and who will do them and ensuring that people do things right
Control and evaluation: ensuring that people are accountable and take responsibility for what is being done using structures, processes and performance to monitor 8 Dimensions to Strategic Management Content Process Addressing
People Processes / System Technology Context 9 Comprehensive Strategic Management Model
Develop Vision and Mission Statement s Establish long term objectives Generate evaluate and select strategies Implement strategies Measure and Evaluate Performance Perform External Audit Perform Internal Audit Strategy Formulation Strategy Implementation Strategy Evaluation 10 Strategic planning has been practised by private organizations much longer than public organizations (Poister and Streib, 2005). Only from the early 1980s, after some public organizations especially in the western countries (Hansen, 2007) have undergone many modernization initiatives and transformed themselves into what is known today as New Public Management (NPM) (Pollitt and Bouckhart, 2004), strategic planning started to be commonly incorporated by public organizations (Hood, 1991). Public organizations that adopt the NPM concept would be using strategic planning for various reasons and one of them is to shape their future directions (McBain and Smith, 2010).
Examples of their expectations would be to achieve public value creation (Moore, 2000; and Bryce, 2000), efficiency in the processes (Bryson, 1995; and Hammer and Champy, 1993), significant contribution and impact to the society (Koteen, 1989), excellent service quality (Parasuraman, 2002), good corporate governance (Dalton and Croft, 2003) and etc. Background of Strategic Management 11 Many researchers have attempted to define the meaning of strategic planning. Most of the definitions focus on aligning the environment that the organization faces by assessing internal and external factors that it is being exposed to (Healey, 1992).
Hines (1991) suggest that the internal and external factors are critical aspects and they need to be analysed and addressed appropriately so that a relevant strategic planning can be developed (Nutt and Backoff, 1992).
This is also consistent with Hines (1991) findings suggesting that internal and external factors are critical issues, which are very complex to analyzed, however because their criticality, they need to be addressed appropriately in the development of organization strategic planning.
Background of Strategic Management 12 Meanwhile, Ethridge et.al. (1997) explains strategic planning as a disciplined effort to produce fundamental decisions and actions that would help to shape what an organization is and what it serves to do. Researchers such as Poister and Streib (1994) describe strategic planning as a method for organizations to focus on maximizing their efforts using scarce resources available to them and exploit potential opportunities.
Bryson (1995) defines strategic planning as a disciplined effort, which provides a systematic process to capture relevant information, which is crucial for setting up long-term directions delineated by specific goals, objectives and actions. Thus, strategic planning saturates the culture of the organization dictating where it is heading to (Osborne and Gaebler, 1992), what is important to achieve (Wildavsky, 1979) and maintain a favourable balance for the organization within the environment it faces over the long-run (Eadie, 2000).
Finally, Mintzberg (2001) explains that strategic planning in the form of an explicit guide for future behaviour of the organization.
Background of Strategic Management 13 Strategic Management Theory Firstly, a unlike private organizations that use strategic planning to gain competitive advantage (Porter, 1985) in order to maximise profit in the long-term, the same cannot be said about public organizations. Most of the public organizations operates as monopoly (Tilley, 1993; and Clarke et.al. 1994). They are established to fulfil certain mandates for the benefit of the public (Nutt and Backoff, 1992).
This is also in line with the research findings by Moore (2000) and Bryce (2000) that suggest the special characteristics of public organizations would be to create public value and achieve social mission / mandate for the stakeholders.
This is consistent with the suggestion made by Nutt and Backoff (1992) that public organizations should be vary of using private sector approaches that assume clear goals, profit or economic purposes, unlimited authority to act, secret development, limited responsibility for actions, and oversight through market mechanisms that signal financial results. 14 Secondly, Brunsson (1989) suggests it is the tasks of public organizations to deal with inconsistent demands i.e. their work should involve the articulation of on-going and irresolvable debates. Walker and Ruekert (1987) propose that public organizations to develop enduring patterns of demands that seek to align them to their environment.
Dealing with instability in strategic planning proves to be ironic because the concept of strategic planning itself is based on stability (Mintzberg, 1987). The dilemma here is to have a strategic planning to create some form of stability but trying to apply it in environment that changes from time to time. Strategic Management Theory 15 Thirdly, in the case of private organizations, their management teams are able to develop strategy to meet their expected goals (Boyne and Walker, 2004). As for public organizations, Boschken (1988); Bozeman and Straussman (1990); and Ring and Perry (1995) argue that strategy contents are most likely to be imposed on them.
This is often the case because, they are funded for example by government (Boyne, 1998), parties for specific intentions (Hood et. al., 1999), public scrutiny of all transactions (Nutt and Backoff, 1992) and etc. Based on this argument, DiMaggio and Powell (1983) suggest that public organizations are more likely to be subject to pressures of coercive isomorphism and that would greatly influence their strategic planning. Strategic Management Theory 16 Fourthly. Mintzberg (1987), suggest that in developing strategic planning, it is important to combine the holistic perspective blending the aspects of future, present and past i.e. strategy is the anticipation of the future but it must be understood from patterns of the past. In management studies, strategy could be classified into two i.e. deliberate (intended) and emergent (realized) (Mintzberg and Waters, 1985).
In the case of pure deliberate strategy, it would preclude any learning process in deriving to the strategy. On the other hand, a pure emergent strategy would preclude the element of control. In reality, when trying to cope with the dynamic changes in the environment, neither pure deliberate strategy nor pure emergence strategy could be implemented (Mintzberg and Waters, 1985).
Therefore, it is essential for public organizations to blend the two approaches in developing their strategic planning i.e. combined deliberation and control with flexibility and organizational learning. Strategic Management Theory 17 Fifthly, there are two decision-making approaches to help public organizations to develop their strategic planning i.e. rational and incremental. In rational decision- making, the best decision will be implemented in order to achieve the defined objectives set by the public organizations (Rainey, 2003).
Examples of rational approach for decision-making would be. bounded rationality (Simon, 1997) and muddling through (Lindblom, 1959). While rational decision- making seems to be ideal in real life, the incremental decision-making is considered to be more practical (Lindblom, 1959).
The characteristics of incremental decision-making would include no effort at comprehensiveness i.e. all policies should be derived in relation to the past and current practices (Lindblom, 1959).
Examples of incremental approach for decision-making would be logical incremental (Quinn, 1980) and satisficing (Mayhew, 1974; and Simon, 1956). Strategic Management Theory 18 Finally, in developing the strategy for public organizations, it is extremely important that all factors affecting the environment of the organizations been taken into considerations.
There are various tools and techniques that could be used to asses a public organizations external environment such as PESTLE analysis, competitor analysis, Four-Link model (Lynch, 2006) and gap analysis. Some useful tools and techniques that could be used to assess a public organizations internal environment would be stakeholder analysis and benchmarking.
Failure to acknowledge the significant influences that external and internal factors have towards the environment of the public organization could seriously pose threats to the relevance of the organization in the industry. Strategic Management Theory WHAT IS VISION? 19 Vision statement: WHAT DO WE WANT TO BECOME?
Getting agreement on organization basic vision to achieve in the long run is important
Clear vision can provide: Foundation for comprehensive mission statement Strategy development starting point WHAT IS MISSION STATEMENT? Mission statement: WHAT IS OUR BUSINESS? A form of declaration, an organisations reason for being 20 Should be enduring statement of purpose allows similar organisation to be distinguished from another Mission statement should reveal What organisation wants to be and; Whom it wants to serve
WHAT IS STATEMENT OF VALUES? Growing number of organisations producing a statement of values rather than publishing vision & mission statements 21 Importance of Mission Statement derives to give organisation: Unanimity of purpose Basis for allocating resources Starting point for organisational culture & climate Focal point for ideas (future strategy & direction)
Strategic Plans At All Organisation Level Process of developing longer-term organisational objective 22 Strategic plans need to be developed at various level. Second part of the unit looks at different between Corporate level Business unit level strategy plans
Organisations operational plan or business plan usually have 1 or 2 year life span for medium term and 3 to 5 year for long term Strategic plans are necessary to organisation with all division working to the same overall goals 23 It possesses diverse roles and responsibilities, ranging from those with potential commercial focus to boost up country economy to those that are socially oriented such as welfare programs, education and public health campaigns Roles and responsibilities of Government Public Sector Roles 24 Education Postal Health Welfare Tax Security Land Utilities Science and Technology Finance Environment Economic Planning Development Housing Transportation Legal Public Sector Involvement 25 Need of Strategic Management in Public Sector Managing complexity of issues
Efficient allocation of resources
Effective managing goals
Client centric
26 Need of New Public Management More systematic efforts to make public administrations more accountable, efficient, client centric and responsive.
The ideology borrowed from the managerial methods of the private sector
Still addressing social values 27 Employment of professional managers Explicit standard to measures performance Greater emphasis on consistency of services Decentralization Increased competition between organizational and subunits Emphasis on private sector management styles Increased accountability and prudence in resource use Tenets of New Public Management Privatization Quasi-market competition Performance orientation Results-oriented Empowerment in decision makings Decentralization Specialization Client centric 28 Agendas of New Public Management 29 Strategic Analysis: Internal Audit Analysis B E C D A Activity Map Value Chain Stakeholder Analysis Benchmarking Internal Audit Generic Strategies Borrowing from private sector, Porter (1998) developed series of generic strategies for Strategic Business Unit (SBUs):
Cost Leadership Not originally intended to imply lowest cost but instead referred to ability of large international organisation to determine price levels in different market
Differentiation Strategies Based on distinguishing product or service from competitor
Focus Identify market for product or service and ensure organisational strategy focused on serving that market
30 31 SWOT Analysis TOWS MATRIX
32 Strengths - S
List Strengths Weaknesses - W
List Weaknesses Opportunities O
List Opportunities SO Strategies
Use strengths-take advantage of opportunities WO Strategies
Overcome weaknesses -take advantage of opportunities Threats T
List Threats ST Strategies
Use strengths-avoid threats WT Strategies
Minimise weaknesses-avoid threats Strengths : - Strong Financial Support - MIDAs strong position & brand - Wide Network (Overseas & State offices) - Clear & Transparent Policies - Sufficient Human Capital - Central investment promotion agency - Abundant natural resources - Malaysias strategic location Weaknesses : - Complicated approval procedures - Unclear new divisions roles and functions - Investor care needs to be enhanced - Lack of experienced officers - Lack of guidance from superior/seniors - Lengthy & unproductive meetings/activities - Weak financial management - Incomprehensive CBA Opportunities : - Relocation of companies operations to Asia - IP acquisitions - External seminars/conferences/ training for capacity building - Gaps in current Ecosystems 1. To undertake SPMs to targeted companies relocating their operations to Asia 2. To formulate policies that encourage IP creation/development/acquisition 3. To explore new competitive edge as selling points during missions 1. To assign an account manager for each potential investor 2. To replace unproductive meetings with trainings/attending seminars 3. To analyse ROIs on programmes carried out vis--vis investments targets Threats : - Stiff competition with other countries - Incentive substitution by other agencies e.g. Regional Corridor - Political intervention - Perception Cheap Labour
1. To leverage on MIDAs brand and wide network to further promote Malaysia as an investment destination 2. To strengthen coordination with other IPAs 3. To optimise human capital utilisation on promotion activities 4. To review and enforce policies on labour intensive industries 1. To simplify business processes 2. To formulate job descriptions for all divisions 3. To be more focused in promoting targeted subsectors
Internal Factors External Factors TOWS Matrix Analysis for MIDA 33 34 BCG Matrix Growth Market Share 35 STAR high growth market, dominant market share requires additional resources for continued growth BCG Matrix Growth Market Share 36
Cash Cow low growth, dominant market share generates surplus resources for allocation to other business units BCG Matrix Growth Market Share 37 Question Mark high growth market, low market share represents a high-risk/cost opportunity requiring a large commitment of resources to build market share BCG Matrix Growth Market Share 38
Dog low/declining market, subordinate market share has diminished prospects and represents a drain on the portfolio BCG Matrix Growth Market Share 39 Internal Factor Evaluation (IFE) matrix is a strategic management tool for auditing or evaluating major strengths and weaknesses in functional areas of a business.
IFE matrix also provides a basis for identifying and evaluating relationships among those areas. The Internal Factor Evaluation matrix or short IFE matrix is used in strategy formulation.
Internal Factor Evaluation 40 The IFE matrix can be created using the following five steps:
Key internal factors
Conduct internal audit and identify both strengths and weaknesses in all your business areas. It is suggested you identify 10 to 20 internal factors, but the more you can provide for the IFE matrix, the better. The number of factors has no effect on the range of total weighted scores (discussed below) because the weights always sum to 1.0, but it helps to diminish estimate errors resulting from subjective ratings. First, list strengths and then weaknesses. It is wise to be as specific and objective as possible. You can for example use percentages, ratios, and comparative numbers.
How can I create the IFE matrix? 41 Weights
Having identified strengths and weaknesses, the core of the IFE matrix, assign a weight that ranges from 0.00 to 1.00 to each factor. The weight assigned to a given factor indicates the relative importance of the factor. Zero means not important. One indicates very important. If you work with more than 10 factors in your IFE matrix, it can be easier to assign weights using the 0 to 100 scale instead of 0.00 to 1.00. Regardless of whether a key factor is an internal strength or weakness, factors with the greatest importance in your organizational performance should be assigned the highest weights. After you assign weight to individual factors, make sure the sum of all weights equals 1.00 (or 100 if using the 0 to 100 scale weights).
The weight assigned to a given factor indicates the relative importance of the factor to being successful in the firm's industry. Weights are industry based.
IFE matrix 42 Rating
Assign a 1 to X rating to each factor. Your rating scale can be per your preference. Practitioners usually use rating on the scale from 1 to 4. Rating captures whether the factor represents a major weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4). If you use the rating scale 1 to 4, then strengths must receive a 4 or 3 rating and weaknesses must receive a 1 or 2 rating.
Note, the weights determined in the previous step are industry based. Ratings are company based.
Multiply
Now we can get to the IFE matrix math. Multiply each factor's weight by its rating. This will give you a weighted score for each factor.
Sum
The last step in constructing the IFE matrix is to sum the weighted scores for each factor. This provides the total weighted score for your business. IFE matrix 43 IFE matrix 44 What values does the IFE matrix take? Regardless of how many factors are included in an IFE Matrix, the total weighted score can range from a low of 1.0 to a high of 4.0 (assuming you used the 1 to 4 rating scale). The average score you can possibly get is 2.5.
Why is the average 2.5 and not 2.0? Let's explain using an example. You have 4 factors, each has weight 0.25. Factors have the following rating: 1, 4, 1, 4. This will result in individual weighted scores 0.25, 1, 0.25, and 1 for factors 1 through 4. If you add them up, you will get total IFE matrix weighted score 2.5 which is also the average in this case.
Total weighted scores well below 2.5 point to internally weak business. Scores significantly above 2.5 indicate a strong internal position.
What if a key internal factor is both a strength and a weakness in IFE matrix? When a key internal factor is both a strength and a weakness, then include the factor twice in the IFE Matrix. The same factor is treated as two independent factors in this case. Assign weight and also rating to both factors. IFE matrix 45 Strategic Analysis: External Audit Four Links Model Layers of External Environment PESTLE Competitor GAP Analysis External Audit 46 Layers of External Environment 4. Macro-environment
3. Industry / Sector
2. The market / competitors
1. The Organization PESTLE Analysis PESTLE Political Economy Socio-cultural Technology Legal Environment PESTLE Analysis Political Issues to consider include government policy and ideology, taxation and social insurance policy, social welfare policies, foreign trade regulations and regulatory agencies
Economic Issues might include business and economic growth cycles, interest rates, inflation rates, average disposable income, levels of unemployment and deprivation
Socio-cultural Issues will be particularly important for many public sector organisations and could include such issues as demographic trends, increased cultural diversity, the distribution of income, social mobility, life style, education and etc PESTLE Analysis Technological Issues may link to technology capabilities and computerisation, automation, internet, mobile phone technologies and etc
Legal Issues can and do have a big impact on public sector organisations including employment law, health and safety legislation, regulatory systems and product safety rules
Environmental Issues are prominent in public sector for example environmental protection legislation, waste disposal policies, energy consumption regulations 50 Competitor Analysis: Porters Five Forces Four Link Model 1. Informal cooperative links and networks
2. Formal cooperative links
3. Complementors
4. Government links and networks
The EFE matrix is very similar to the IFE matrix.
While the IFE matrix deals with internal factors, the EFE matrix is concerned solely with external factors. External Factor Evaluation List factors The first step is to gather a list of external factors. Divide factors into two groups: opportunities and threats.
Assign weights Assign a weight to each factor. The value of each weight should be between 0 and 1 (or alternatively between 10 and 100 if you use the 10 to 100 scale). Zero means the factor is not important. One or hundred means that the factor is the most influential and critical one. The total value of all weights together should equal 1 or 100.
How can I create the EFE matrix? Rate factors Assign a rating to each factor. Rating should be between 1 and 4. Rating indicates how effective the firms current strategies respond to the factor. 1 = the response is poor. 2 = the response is below average. 3 = above average. 4 = superior. Weights are industry-specific. Ratings are company-specific.
Multiply weights by ratings Multiply each factor weight with its rating. This will calculate the weighted score for each factor.
How can I create the EFE matrix?
Total all weighted scores Add all weighted scores for each factor. This will calculate the total weighted score for the company. How can I create the EFE matrix?
How can I create the EFE matrix? Analyze the company's history, development, and growth A convenient way to investigate how a company's past strategy and structure affect it in the present is to chart the critical incidents in its history - that is, the events that were the most unusual or the most essential for its development into the company it is today. Some of the events have to do with its founding, its initial products, how it makes new- product market decisions, and how it developed and chose functional competencies to pursue. Its entry into new businesses and shifts in its main lines of business are also important milestones to consider.
Identify the company's internal strengths and weaknesses Once the historical profile is completed, you can begin the SWOT analysis. Use all the incidents you have charted to develop an account of the company's strengths and weaknesses as they have emerged historically. Examine each of the value creation functions of the company, and identify the functions in which the company is currently strong and currently weak. Some companies might be weak in marketing; some might be strong in research and development. Make lists of these strengths and weaknesses. The SWOT checklist gives examples of what might go in these lists. Detailed Analysis of Case Study
Analyze the external environment
The next step is to identify environmental opportunities and threats. Here you should apply all information you have learned on industry and microenvironments, to analyze the environment the company is confronting. Of particular importance at the industry level is Porter's five forces model and the stage of the life cycle model. Which factors in the microenvironment will appear salient depends on the specific company being analyzed. However, use each factor in turn (for instance, demographic factors) to see whether it is relevant for the company in question. Having done this analysis, you will have generated both an analysis of the company's environment and a list of opportunities and threats. The SWOT checklist lists some common environmental opportunities and threats that you may look for, but the list you generate will be specific to your company.
Detailed Analysis of Case Study
Evaluate the SWOT analysis
Having identified the company's external opportunities and threats as well as its internal strengths and weaknesses, you need to consider what your findings mean. That is, you need to balance strengths and weaknesses against opportunities and threats. Is the company in an overall strong competitive position? Can it continue to pursue its current business- or corporate-level strategy profitably? What can the company do to turn weaknesses into strengths and threats into opportunities? Can it develop new functional, business, or corporate strategies to accomplish this change? Never merely generate the SWOT analysis and then put it aside. Because it provides a succinct summary of the company's condition, a good SWOT analysis is the key to all the analyses that follow. Detailed Analysis of Case Study Analyze corporate-level strategy
To analyze a company's corporate-level strategy, you first need to define the company's mission and goals. Sometimes the mission and goals are stated explicitly in the case; at other times you will have to infer them from available information. The information you need to collect to find out the company's corporate strategy includes such factors as its line(s) of business and the nature of its subsidiaries and acquisitions. It is important to analyze the relationship among the company's businesses. Do they trade or exchange resources? Are there gains to be achieved from synergy? Alternatively, is the company just running a portfolio of investments? This analysis should enable you to define the corporate strategy that the company is pursuing (for example, related or unrelated diversification, or a combination of both) and to conclude whether the company operates in just one core business. Then, using your SWOT analysis, debate the merits of this strategy. Is it appropriate, given the environment the company is in? Could a change in corporate strategy provide the company with new opportunities or transform a weakness into a strength? For example, should the company diversify from its core business into new businesses?
Detailed Analysis of Case Study
Other issues should be considered as well. How and why has the company's strategy changed over time? What is the claimed rationale for any changes? Often it is a good idea to analyze the company's businesses or products to assess its situation and identify which divisions contribute the most to or detract from its competitive advantage. It is also useful to explore how the company has built its portfolio over time. Did it acquire new businesses, or did it internally venture its own? All these factors provide clues about the company and indicate ways of improving its future performance.
Detailed Analysis of Case Study Analyze business-level strategy
Once you know the company's corporate-level strategy and have done the SWOT analysis, the next step is to identify the company's business-level strategy. If the company is a single- business company, its business-level strategy is identical to its corporate-level strategy. If the company is in many businesses, each business will have its own business-level strategy. You will need to identify the company's generic competitive strategy - differentiation, low cost, or focus - and its investment strategy, given the company's relative competitive position and the stage of the life cycle. The company also may market different products using different business-level strategies. For example, it may offer a low-cost product range and a line of differentiated products. Be sure to give a full account of a company's business- level strategy to show how it competes.
Detailed Analysis of Case Study
Identifying the functional strategies that a company pursues to build competitive advantage through superior efficiency, quality, innovation, and customer responsiveness and to achieve its business-level strategy is very important. The SWOT analysis will have provided you with information on the company's functional competencies. You should further investigate its production, marketing, or research and development strategy to gain a picture of where the company is going. For example, pursuing a low-cost or a differentiation strategy successfully requires a very different set of competencies. Has the company developed the right ones? If it has, how can it exploit them further? Can it pursue both a low-cost and a differentiation strategy simultaneously?
The SWOT analysis is especially important at this point if the industry analysis, particularly Porter's model, has revealed the threats to the company from the environment. Can the company deal with these threats? How should it change its business-level strategy to counter them? To evaluate the potential of a company's business-level strategy, you must first perform a thorough SWOT analysis that captures the essence of its problems. Once you complete this analysis, you will have a full picture of the way the company is operating and be in a position to evaluate the potential of its strategy. Thus, you will be able to make recommendations concerning the pattern of its future actions. However, first you need to consider strategy implementation, or the way the company tries to achieve its strategy. Detailed Analysis of Case Study Analyze structure and control systems
The aim of this analysis is to identify what structure and control systems the company is using to implement its strategy and to evaluate whether that structure is the appropriate one for the company. Different corporate and business strategies require different structures. For example, does the company have the right level of vertical differentiation (for instance, does it have the appropriate number of levels in the hierarchy or decentralized control?) or horizontal differentiation (does it use a functional structure when it should be using a product structure?)? Similarly, is the company using the right integration or control systems to manage its operations? Are managers being appropriately rewarded? Are the right rewards in place for encouraging cooperation among divisions? These are all issues that should be considered. In some cases there will be little information on these issues, whereas in others there will be a lot. Obviously, in analyzing each case you should gear the analysis toward its most salient issues. For example, organizational conflict, power, and politics will be important issues for some companies. Try to analyze why problems in these areas are occurring. Do they occur because of bad strategy formulation or because of bad strategy implementation?
Detailed Analysis of Case Study
Organizational change is an issue in many cases because the companies are attempting to alter their strategies or structures to solve strategic problems. Thus, as a part of the analysis, you might suggest an action plan that the company in question could use to achieve its goals. For example, you might list in a logical sequence the steps the company would need to follow to alter its business-level strategy from differentiation to focus. Detailed Analysis of Case Study Make recommendations
The last part of the case analysis process involves making recommendations based on your analysis. Obviously, the quality of your recommendations is a direct result of the thoroughness with which you prepared the case analysis. The work you put into the case analysis will be obvious to the professor from the nature of your recommendations. Recommendations are directed at solving whatever strategic problem the company is facing and at increasing its future profitability. Your recommendations should be in line with your analysis; that is, they should follow logically from the previous discussion. For example, your recommendation generally will centre on the specific ways of changing functional, business, and corporate strategy and organizational structure and control to improve business performance. The set of recommendations will be specific to each case, and so it is difficult to discuss these recommendations here.
Detailed Analysis of Case Study Such recommendations might include an increase in spending on specific research and development projects, the divesting of certain businesses, a change from a strategy of unrelated to related diversification, an increase in the level of integration among divisions by using task forces and teams, or a move to a different kind of structure to implement a new business-level strategy. Again, make sure your recommendations are mutually consistent and are written in the form of an action plan. The plan might contain a timetable that sequences the actions for changing the company's strategy and a description of how changes at the corporate level will necessitate changes at the business level and subsequently at the functional level.
After following all these stages, you will have performed a thorough analysis of the case and will be in a position to join in class discussion or present your ideas to the class, depending on the format used by your professor. Remember that you must tailor your analysis to suit the specific issue discussed in your case. In some cases, you might completely omit one of the steps in the analysis because it is not relevant to the situation you are considering. You must be sensitive to the needs of the case and not apply the framework we have discussed in this section blindly. The framework is meant only as a guide and not as an outline that you must use to do a successful analysis. Detailed Analysis of Case Study 1 no frills 2 low price 3 hybrid 4 differentiation 5 focused differentiation 6 8 7 Perceived product / services benefits Strategies destined for ultimate failure Low High High Low Price Strategy Clock: Johnson et.al (2006) Financial
How should we appear to our stakeholders? Customer
How should we appear to our customer? Learning and Growth
How will we sustain our ability to change and improve Internal Business Processes
What business processes must we excel at? Vision and Strategy Balance Scorecard 70 SWOT analysis Stakeholder Mapping External and internal environment Best practices and benchmarks Strategy Map Addressing Learning and Growth Internal Perspectives Customer Perspectives Financial Perspectives Development of Strategy Map 71 Strategy Map Thank You 72