Novo Marmo
STRATEGIC THINKING
Prepeard By : Faleh Zahrawi
STRATEGIC ISSUES
A Strategic Issue is any issue that significantly influences a persons, a work groups or an organizations ability to develop and maintain a competitive advantage.
STRATEGIC DOMAINS
Organizational Work Group or Function Individual
COMPETITIVE ADVANTAGE
Acompetitiveadvantagehas threekeycharacteristics: 1.itprovidessuperiorvaluetocustomers 2.itishardtoimitate 3.itenhancesonesabilitytorespondto changesintheenvironment.
SOURCES OF COMPETITIVE ADVANTAGE
Government subsidy or support Established or monopolistic markets Product innovation Process innovation, Cost efficiencies Superior Service Human Resource Management
Every CEO has to spend an enormous amount of time shuffling papers. The question is, how much of your time can you leave free to think about ideas? To me the pursuit of ideas is the only thing that matters. You can always find capable people to do almost everything else.
.
Strategy is the art of creating value. It provides the intellectual frameworks, conceptual models, and governing ideas that allow a companys managers to identify opportunities for bringing value to customers and for delivering that value at a profit. In this respect, strategy is the way a company defines its business and links together the only resources that really matter in todays economy: knowledge and relationships or an organizations competencies and customers.
Normann, R. and Ramirez, R., From Value Chain to Value Constellation: Designing Interactive Strategy, Harvard Business Review, July-August 1993, p.65.
Strategic Mindsets
STRATEGIC FIT MODEL STRATEGIC INTENT MODEL
Strategic thinking is driven by the match between current capabilities and existing opportunities Searching for sustainable advantages Finding protected niches
Strategic thinking is driven by bridging gap between todays reality and tomorrows vision Finding ways to leverage resources Outpacing competitors in building new advantages Making new industry rules
Source, Hamel and Prahalad, Strategic Intent, HBR
Four Questions that Guide Strategic Choices
WHAT CAN WE DO? (strengths and weaknesses) WHAT MIGHT WE DO? (external opportunities and threats)
STRATEGY
WHAT DO WE WANT TO DO? (organizational and individual values)
WHAT DO OTHERS EXPECT US TO DO? (stakeholder expectancies)
ur Related Questions that Guide Strategic Choi
WHAT CAN WE DO? new What (strengths and capabilities do we weaknesses) want to develop? WHAT MIGHT WE DO? How do we (external opportunities create new and threat) possibilities?
STRATEGY
What do we WHAT DO WE need to WANT TO DO? learn to care (organizational and about? individual values)
How do we partner toWHATshared build DO OTHERS EXPECT US TO expectancies? DO? (stakeholder expectancies)
Porters Five Forces Model
NEW ENTRANTS
SUPPLIERS
INDUSTRY COMPETITORS
BUYERS
SUBSTITUTES
Porters Generic Value Chain
FIRM INFRASTRUCTURE
HUMAN RESOURCE MANAGEMENT TECHNOLOGY DEVELOPMENT
GI AR M N
PROCUREMENT Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
IN M A RG
Adapted from Michael Porter, Competitive Advantage, Free Press, New York, 1985, p. 46
GENERAL VALUE CHAIN
Raw Materials Transport Processing Whats your value chain? What are the margins in each link? Where are your competitive strengths? Where is your strategic intent? Forming
Assembly Service Sales Distribution
Creating Core Capabilities
The building blocks of corporate strategy are not products and markets but businessprocesses. Competitive success depends upon transforming a companys keyprocessesintostrategiccapabilities thatconsistentlyprovidesuperiorvalueto customers Companies create these capabilities by making strategic investmentsin a support infrastructure that links together and transcends traditional functions. Capability-based strategies, because they cross functions, must be championedbyseniorleadership. Stalk, Evans, and Shulmand (1992)
Defining Growth Trajectories D
NEEDS
New
A
Existing
Existing
Charan and Tichy
New
CUSTOMERS
Defining Growth Trajectories D
New
Response
NEEDS
Existing
nt ua A Q
m u
p ea L
B
$XB Global
PushPast
Your Share
Existing
Charan and Tichy
New CUSTOMERS
Organization Charters
Mission Statement Vision Statement Values Statement Strategy Operating Goals Leadership
ORGANIZATION CHARTERS
LEADERSHIP Strategy Mission Goals Values Vision
1. Mission Statement 2. Vision Statement 3. Values Statement
4. Strategy 5. Operating Goals and Milestones 6. Leadership
PROBLEM LEADERSHIP
LEADERSHIP ACTIVITY Problem Solving Problem Finding ProblemCreating Old New
Questions Answers New Old New New
Adapted from Pathfinding by Harold Leavitt, 1995
Technological innovation Fast customer response Leading edge synergies Investing in core capabilities BUT reinventing the future?
Indirect Influence on Outcomes
Environment
Leadership
Design Decisions
Culture
Results
Competitive Advantage Through People
Employment Security Selectivity in Recruiting High Wages Incentive Pay Employee Ownership Information Sharing Participation and Empowerment
Self-Managed Teams Training and Skill Development Cross Utilization and Training Symbolic Egalitarianism Wage Compression Promotion from Within
Jeffrey Pfeffer, Producing sustainable competitive advantage through the effective management of people, Competitive Advantage through People, HBS Press, 1994, (AME, 1995, V. 9. N. 1
Strategy as Revolution
Planning isnt strategic. Strategy making must be subversive. The Bottleneck is at the top of the bottle. Revolutionaries exist in every company. Strategy making must be democratic. Change is not the problem, engagement is. Anyone can be a strategy activist. Perspective is worth 50 IQ points. Top down and Bottom up are not alternatives. You cant see the end from the beginning.
Revolutionizing Strategy
Radically improving the value equation Separating form and function Achieving Joy of Use Pushing the bounds of universality Striving for individuality Increasing accessibility Re-scaling Industries Compressing the Supply Chain Driving Convergence
Strategy as Revolution, Gary Hamel, HBR July-August, 1996, 96405, p. 69
Strategy is revolution; everything else is tactics. In industry after industry the terrain is changing so fast that experience is irrelevant and even dangerous. The objective is not to get people to support change but to give them responsibility for engendering change, some control over their destiny.
Hamel
Who Should Be Involved in Democratic Strategy Making?
People geographically on the periphery Newcomers Young people
Change the Rules
The future is not the result of choices among alternative paths offered in the present -- it is a place that is created -- created first in the mind and will; created next in the activity.
CONCLUSION
Whats your charter? What competitive advantage will achieve your charter? Are you internally consistent? Nurture your revolutionaries. Create problems that build the future.
See U Next Week
