Published on January 31, 2009
Strategic Management Strategic Framework Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-1
Roadmap to Strategic Techniques Market Definition /Measures of Performance/ Financial Analysis /Product Lifecycle /Market Structure/ Market Environmental Scanning/ ETOP / Dynamics Porter Analysis/Industry Structure/Competitive Environment Industry Value Chain / Economies of S / KSF Financial Analysis / Stakeholder Analysis Company Capability Profile / Company Value Chain Company Core Capabilities Profile Core Competencies Organizational Lifecycle Vulnerability Assessment SWOT / Directional Policy Matrix Strategic Fit Portfolio Analysis / SPACE / Strategy Design features Centres of Gravity / Organizational Life Cycle Implement Portfolio Diversity Leadership / Culture / Structure / Staffing / Incentives / Information Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-2
Some Terminology from Corporate Strategic Environment • Culture The organization ambience and operating context (cohesion, collective sense of purpose) *What is our identity? • Vision The desired future state of the organization *What should we aspire to? Moral framework guiding corporate behaviour • Values *Against what criteria should our actions be judged? Assumptions about the organization mode of operation and interaction with environment • Beliefs *What do we take for given? • Mission Defines scope of corporate activity in terms of culture, vision and values *Where do we compete and how? Sets direction of corporate accomplishments • Goals *How to judge progress in performance? Defines milestones and targets for goals • Objectives *What to evaluate in performance? Defines a “fit” between the organization’s capabilities, goals and the market opportunities • Strategy *What should we sell to whom, where should we sell and how; given our competitors’ situation Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-3
Art of the General Firm Coopetition Products/Markets Competition Market/Product Choice: Focus Ability to Deliver: Capability Counter Hostile Action: Anticipation Σ “Fit” Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-4
Diamond E Framework Fry/Killing Management Preferences Organization External Strategy Environment Resources Characteristics of Good Strategy -Sustainable -Unique -Value Added (Real or Perceived) Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-5
Strategy Process and Tasks Formulation Mission Goals Strategic Plans Objectives, Action Plans Implement Staffing Structure Incentives Decision, Control Outputs Evaluation and Correction Performance Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-6
Strategic Four Factors Model External Environment Strategic Planning Resource Strategic Organization Needs Mgt Structure Strategic Control External Environment ABC 3F 3S Assumptions Forces Strategy Beliefs Focus Structure Consequences Fit Style Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-7
Components of Strategy Formulation 1 Business Definition 2 Key Success Factors 3 Environmental Assumptions 4 Competitive Position 5 Performance Objectives 6 Action Plan 7 Fit with Corporate Goals Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-8
Mintzberg Strategy 5 P’s • Ploy • Plan • Pattern • Policies • Position Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-9
Generic Strategies Many Market/Product Focus Differentiation Strategic Options Product Line-up Cost Leader Differentiation Few Company Narrow Company Wide Low Competitive advantage High SPACE Equivalence • Cost Leader = Aggressive • Focus = Competitive • Market/Product Differentiation = Conservative • Product Line-up Differentiation = Gamesmanship Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-10
Strategic Alternatives Strategic Alternative Focus Status Quo Internal Stability Continue in present products/markets Concentration Internal Single product line Do one thing well Horizontal Integration External Ownership or control of competitiors Gain market power and economies of scale Vertical Integration External Transform cost centres to profit centres Improve economies of scale, reduce dependence on suppliers or distributors Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-11
Strategic Alternatives cont. Strategic Alternative Focus Diversification External or Internal Broadening of product line Reduce competitive pressures; gain greater profitability; spread risk Joint Venture External Complementary benefits Spread risk; create synergy Retrenchment Internal Reduction of activity or operations Respond to adversity by permanent phaseout Divestiture or Internal Liquidation Removal of an entity that does not fit Realign products/markets or organization Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-12
Strategic Alternatives cont. Strategic Alternative Focus Innovation Internal Seizing of leadership position Take initiative; gain position early in product life cycle Restructuring External Cost reduction; growth potential Concentrate on products and divisions with high potential Copyright by Authors Tom Koplyay and David Goldsmith July 1998 1-13
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