PRESENTATION SLIDES

Contemporary Strategy Analysis

The Concept of Strategy

OUTLINE
The role of strategy in success

A framework for strategy analysis

The evolution of strategic management Corporate strategy and business strategy

Strategy making: Design or process?

The role of strategy

Components of Success
MADONNA GOALS Single-minded quest for stardom. GIAP & NORTH VIETNAMESE Reunification of Vietnam under Communist rule. LANCE ARMSTRONG Winning the Tour de France Diagnosis of the physical, psychological and strategic determinants of individual and team performance Systematic development of individual stamina and team capabilities

UNDERIdentified emerging Intimate knowledge of STANDING THE trends in popular culture. terrain Understanding ENVIRONMENT Understood key success U.S. political system. factors in showbiz

RESOURCE APPRAISAL

Recognized limited raw talent. Exploited strengths in selfpromotion, product development & relationship management Commitment and discipline. Charismatic leadership. Team building. Attention to detail.

Recognized economic and military weaknesses and core political strengths

IMPLEMENTATION

Tight control. Longterm commitment. Effective propaganda. Inspirational leadership.

Clear delineation of individual roles. Alignment of incentives with team goals. Nurturing esprit de corp

What Makes a Successful Strategy?

Successful Strategy

EFFECTIVE IMPLEMENTATION Long-term, simple and agreed objectives Profound understanding of the competitive environment Objective appraisal of resources

What is Strategy?
Distinguishing strategy from tactics:
Strategy is the overall plan for deploying resources to establish a favorable position. Tactic is a scheme for a specific maneuver.

Characteristics of strategic decisions:

Important. Involve a significant commitment of resources. Not easily reversible.

The Evolution of Strategic Management

1950s
DOMINANT THEME

1960s-early 70s Corporate planning

Mid-70s-mid-80s Positioning

Late 80s 1990s Competitive advantage

2000s Strategic innovation

Budgetary planning & control Financial control

MAIN ISSUES

Planning growth &diversification

Selecting sectors/markets. Positioning for leadership Industry analysis Segmentation Experience curve Portfolio analysis

Focusing on sources of competitive advantage

Reconciling size with flexibility & agility

KEY CONCEPTS & TOOLS

Capital budgeting. Financial planning

Forecasting. Corporate planning. Synergy

Resources & Cooperative capabilities. strategy. Shareholder Complexity. value. Owning E-commerce. standards. Knowledge Management Alliances & networks Self -organiz ation & virtual organization

MANAGEMENT IMPLICATIONS

Coordination & control by Budgeting systems

Corporate planning depts. created. Rise of corporate planning

Diversification. Restructuring. Global strategies. Reengineering. Matrix structures Refocusing. Outsourcing.

The Basic Framework Strategy: the Link between the Firm and its Environment

THE FIRM
Goals & Values Resources & Capabilities Structure & Systems

THE INDUSTRY ENVIRONMENT

STRATEGY STRATEGY Competitors Customers Suppliers

Sources of Superior Profitability

INDUSTRY ATTRACTIVENESS

RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL

Which businesses should we be in?

CORPORATE STRATEGY

How do we make money?

COMPETITIVE ADVANTAGE

How should we compete?

BUSINESS STRATEGY

Strategy Making : Design or Process?

Strategy as Design Planning and rational choice Strategy as Process Many decision makers responding to multitude of external and internal forces EMERGENT STRATEGY

INTENDED STRATEGY

REALIZED STRATEGY
Mintzbergs Critique of Formal Strategic Planning: The fallacy of prediction the future is unknown The fallacy of detachment -- impossible to divorce formulation from implementation The fallacy of formalization --inhibits flexibility, spontaneity, intuition and learning.

Strategy Making Processes within the Company: Multiple Roles of Strategy

Strategy as Decision Support Improves the quality of decision making

Strategy as Coordination and Communication

Creates consistency and unity

Strategy as Target

Improves performance by setting high aspirations

The Role of Analysis

Strategy analysis improves decision processes, but doesnt give answers. Strategy analysis assists us to identify and understand the main issues. Strategy analysis helps us to manage complexity. Strategy analysis can enhance flexibility and innovation by supporting learning.