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2.strategic Intent
2.strategic Intent
Strategic Intent
Prahalad and Hamel talk about corporate leaders whose ambitions are all out of proportion to their resources and capabilities. E.g. Komatsu set out to Encircle Caterpillar, Canon sought to Beat Xerox
Strategic Intent is more than blind ambition It includes a management process that energizes and focuses on organizations employees through clear communication
Let blue collar employees be given the responsibility to create more shareholder wealth
Building Challenge
Strategic intent implies a sizeable stretch for an organization. Current capabilities and resources will not suffice This forces the organization to be more inventive, to make most of limited resources.
Contd.
Traditional view of strategy focuses on the degree of fit between existing resources and current opportunities, strategic intent creates an extreme misfit between resources and ambitions.
Corporate Challenges
Like strategic intent, challenges stretch the organization. E.g. canon set its engineers a target price of $1000 for a home copier Corporate challenges include analyzing competitor and understanding the foreseeable pattern of industry evolution.
Create a sense of urgency(E.g. Komatsu budgeted on the basis of worst case exchange rate that overvalued yen) Develop a competitor focus at every level through widespread use of competitive intelligence.(E.g. Ford showed production line workers videotapes of operations at Mazdas most efficient plant)
Remaking Strategy
Western managers centers on the problem of maintaining strategic fit The other centers on the problem of leveraging resources.
Similarity Differences
Both models recognize the problem of competing with limited resources The relative competitive advantage determines relative profitability
Search for niches/dissuades the company from challenging an entrenched competitor Reduce financial risk by building a balanced portfolio of cash-generating and cashconsuming business
Strategy is not limited to the eight rules of excellence, seven Ss , five competitive forces , four life-cycle stages and innumerable two-by two matrix. Concepts like the product life cycle, experience curve, product portfolio and generic strategies have toxic side effects: -they reduce the no. of strategic options management is willing to consider -they create a preference for selling business rather than defending them
They yield predictable strategies that rivals easily decode. The strategists goal is not to find a niche within existing industry space but to create new space that is uniquely suited to companys own strength. Japanese companies have won not because they have smarter managers but because they have developed ways to harness the wisdom of anthill.