Strategic Analysis and Action 5 th edition Figures

Strategic Analysis and Action (5 th edition) Figures Strategic Analysis and Action (5 th edition) © 2002 Pearson

The Job of the General Manager Setting Direction vision mission values Assessing Performance today and tomorrow General Manager Creating Strategy determining the way forward Implementing Change making it happen Strategic Analysis and Action (5 th edition) © 2002 Pearson

The Performance Matrix Organizational Health Quadrant 2 + complacen t organizatio n Quadrant 1 desired state three years ago tomorrow ? today – troubled organization crisis Quadrant 4 Quadrant 3 – + Operating Performance Strategic Analysis and Action (5 th edition) © 2002 Pearson

Collins and Porras Vision Framework Organizational Vision Guiding Philosophy Tangible Image Mission Purpose Environment Core Beliefs & Values Vivid Description Source: Copyright © 1991, by The Regents of the University of California. Reprinted from the California Management Review, Vol. 34, No. 1. By permission of The Regents. Strategic Analysis and Action (5 th edition) © 2002 Pearson

Business Strategy Components Goals Value Proposition Product Market Focus Core Activities Strategic Analysis and Action (5 th edition) © 2002 Pearson

Strategic Choice: Product/Market Scope PRODUCT EXISTING NEW EXISTING Market penetration Product development NEW Market development Diversification MARKET Source: Ansoff, I. , The New Corporate Strategy. Copyright © 1987, John Wiley & Sons, Inc. Reprinted by permission of John Wiley & Sons, Inc. Strategic Analysis and Action (5 th edition) © 2002 Pearson

The Wal-Mart Business Strategy • Dominate markets • Lowest cost system • High growth • Do it Wal-Mart way Product Market Focus • Branded general merchandise • Value-oriented customers • Develop easier markets first: work from regional hubs Goals • Everyday low prices • Always in stock • Courteous, reliable Value Proposition Core Activities • Integrated logistics: supplier to checkout • Intensely managed • Local tailoring Strategic Analysis and Action (5 th edition) © 2002 Pearson

Apple’s Strategy • “Change the world through technology” Goals Value Proposition • Differentiation on product and service through a userfriendly graphic interface and integrated products Product Market Focus • • Complete desktop solution 50% US; 50% foreign Education (50%MS); home Hardware, software, peripherals • High end Core Activities R&D Mnf’g Dist’n • Fully integrated Strategic Analysis and Action (5 th edition) © 2002 Pearson

Corporate, Business and Functional Strategy Strategic Analysis and Action (5 th edition) © 2002 Pearson

The Diamond-E Framework Management Preferences Organization Strategy Environment Resources Strategic Analysis and Action (5 th edition) © 2002 Pearson

Strategic Risks TIME HORIZON ENVIRONMENTAL RISKS CAPABILITY RISKS SHORT-TERM LONG-TERM Errors in reading the environment cause strategic failure Environmental changes make the strategy obsolete Strategic demands Internal capabilities exceed the capacity to develop inconsistently execute with strategy Source: Ansoff, I. , The New Corporate Strategy. Copyright © 1987, John Wiley & Sons, Inc. Reprinted by permission of John Wiley & Sons, Inc. Strategic Analysis and Action (5 th edition) © 2002 Pearson

The Strategic Analysis Triangle WANT Management Preferences Individual Strategic Tension CAN Resource Capabilities and Organization Firm NEED Environment Industry Strategic Analysis and Action (5 th edition) © 2002 Pearson

The Process of Strategic Analysis and Action (5 th edition) © 2002 Pearson

Porter’s Five Forces Model POTENTIAL ENTRANTS Threat of new entrants INDUSTRY COMPETITORS Bargaining power of suppliers BUYERS SUPPLIERS Rivalry Among Existing Firms Threat of substitute products or services Bargaining power of buyers SUBSTITUTES Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. , from COMPETITIVE STRATEGY: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980, 1998 by The Free Press. Strategic Analysis and Action (5 th edition) © 2002 Pearson

Prisoner’s Dilemma Matrix FIRM TWO Strategy A Strategy B Strategy A I: $6, 000 I: $10, 000 II: $0 Strategy B I: $0 II: $10, 000 I: $2, 000 II: $2, 000 FIRM TWO Strategic Analysis and Action (5 th edition) © 2002 Pearson

PEST Forces Macro Forces Political Economic Social Technological Micro Forces Supply Competition Demand Strategic Analysis and Action (5 th edition) © 2002 Pearson

Internalization: Global/Local High Need for Global Integration Global Low • Economies of scale • Customers accept standardized products Multidomestic • Locally tailored products • Benefits of being local outweigh added costs Need for Local Responsiveness High Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc. , from THE MULTINATIONAL MISSION by C. K. Prahalad and Yves L. Doz. Copyright © 1987 by The Free Press. Strategic Analysis and Action (5 th edition) © 2002 Pearson

Internalization: Global/Local Strategic Analysis and Action (5 th edition) © 2002 Pearson

Testing the Strategy-Environment Linkage Business Environment Analysis Model (BEAM) E. G. , • Industry support programs • Economic and trade policy • Regulation of structure and conduct Supply E. G. , • Advances in product, process technology • Supplier competence and bargaining power • Competition for raw materials and people Government How well does the strategy anticipate. . . Competition E. G. , • Customer needs and performance • Market growth • Buyer bargaining power Demand E. G. , • Aggregate competitive conditions • Individual competitor strategies Strategic Analysis and Action (5 th edition) © 2002 Pearson

Resource Analysis Strategic Analysis and Action (5 th edition) © 2002 Pearson

The Indirect Role of Management Preferences Direct Role Strategic Choices Environment Indirect Role Organization, Resources & Capabilities A management preferences filter through which the environment and resources are assessed. Strategic Analysis and Action (5 th edition) © 2002 Pearson

Management Preference Analysis Strategic Analysis and Action (5 th edition) © 2002 Pearson

Strategy-Organization Analysis Strategic Analysis and Action (5 th edition) © 2002 Pearson

Organizational Capabilities Model Leverage Point Leadership Behaviour Organization Structure Culture Behaviour Organizational Capabilities Behaviour Culture Leverage Point Management Processes Strategic Analysis and Action (5 th edition) © 2002 Pearson

Basic Organization Structure (Partial) Strategic Analysis and Action (5 th edition) © 2002 Pearson

Intended and Emergent Strategy Unrealized Strategy Realized Strategy Intended Strategy Emergent Strategy Source: Mintzberg, H. ; Ahlstrand, B. ; Lampel, J. ; Strategy Safari, New York: The Free Press, 1998. Strategic Analysis and Action (5 th edition) © 2002 Pearson

Creating a Change Plan Strategic Analysis and Action (5 th edition) © 2002 Pearson

Urgency for Action: The Crisis Curve Good Anticipatory Change Reactive Change Strategic Performance Crisis Change Poor Time Strategic Analysis and Action (5 th edition) © 2002 Pearson

Readiness for Change and Strategic Capability Readiness for Change Good Anticipatory Change Reactive Change Strategic Performance Crisis Change Strategic Capability Poor Time Strategic Analysis and Action (5 th edition) © 2002 Pearson

Yes Proactive Resistors Change Agents Bystanders No Have Required Capabilities Assessing Potential Priority Targets Change Agents in Waiting Defensive Resistors Actively Opposed Neutral Strongly Supportive Commitment to Proposed Change Strategic Analysis and Action (5 th edition) © 2002 Pearson