Contenu connexe Similaire à Mastering business strategy simplifying the complex (20) Plus de Michaelcmcdermott (7) Mastering business strategy simplifying the complex2. Perspectives on Strategy
Author(s)
Perspective
(Published)
1.
Emergent Strategy
Executives use
unpredictability is used as a
justification to avoid tough
choices – “go-with-theflow”.
Michael Porter
Competitive
Advantage
Choose industry & unique
competitive position.
Prahalad & Hamel
Core Competences
Capabilities with four traits
determine competitive
advantage.
Kim & Mauborgne
Blue Ocean Strategy Create new & larger market
space where no rivals, &
enjoy benefits of lowest
cost & highly differentiated.
(1980)
3.
(1990)
4.
(2005)
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Key Message
Henry Mintzberg
(1978)
2.
Key Concept
© McDermott, 2014
2
3. Perspectives on Strategy
Author(s)
Perspective
(Published)
Key Concept
Key Message
5.
Richard Rumelt
Good vs Bad
Strategy
Focus all resources on
the “big problem”.
6.
Cynthia
Montgomery (2013)
The Strategist
Articulate distinctive
purpose &
communicate that.
7.
Lafley and Martin
Playing to Win
Make five integrated
choices.
8.
Rita McGrath
The End of
Competitive
Advantage
Forget sustainable
advantage, and live
with transient
advantage
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(2011)
(2013)
(2013)
© McDermott, 2014
3
4. 1. MINTZBERG AND DELIBERATE VS
EMERGENT STRATEGY
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© McDermott, 2014
4
6. Mintzberg (1978)
Deliberate vs Emergent Strategy
Strategy
Deliberate
Emergent
Recommendations
Delay making
strategic choices until
future is predictable.
Monitor remote
external environment
& make necessary
adjustments.
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Adjust also when
major change sin
external competitive
environment
© McDermott, 2014
6
7. Companies develop intended strategy;
Some plans are “dropped” or “unrealized”;
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Some unintended ideas emerge
and are implemented
© McDermott, 2014
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9. 2. MICHAEL PORTER: COMPETITIVE
POSITION FOR COMPETITIVE
ADVANTAGE
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© McDermott, 2014
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10. Michael Porter and Strategy
• The Porter view stresses the importance of
analysis
• Good analysis = good strategy
• Good strategy = sustainable competitive
advantage
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© McDermott, 2014
10
11. Michael Porter and Strategy
• What industry do we compete in?
– So perform industry analysis.
– Determine the nature of the nature.
• How do we compete?
– Select a generic strategy.
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© McDermott, 2014
11
12. Michael Porter and Strategy
Strategic Analysis
Strategic Choice
Competitive
Advantage
Industry Analysis
Choice of Generic
Strategy
Competitive
Advantage
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© McDermott, 2014
12
15. Michael Porter and Strategy:
Generic Strategy
• Finding a unique
competitive position.
• But often in highly
competitive industry.
• All seeking to grab a
share of a defined
market.
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© McDermott, 2014
15
16. 3. PRAHALAD AND HAMEL: CORE
COMPETENCE OF THE FIRM AND
STRATEGIC INTENT
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© McDermott, 2014
16
17. Why are tribute
bands not
superstars
25/01/2014
It’s obvious!
We do not have all
the four traits of
core competences
© McDermott, 2014
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18. Core Competences and the Resource-Based View
(RBV)of the Firm
(Prahald and Hamel, 1990)
Competitive advantage is
determined by internal
considerations – the
company’s capabilities
Capabilities must possess four
key traits
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© McDermott, 2014
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19. Core competences are of crucial importance
(see above).
But what are the defining traits of core
competencies?
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© McDermott, 2014
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24. Strategic Intent
Once tiny Japanese companies
developed explicit strategic intent
to beat their much larger US and
European rivals
1960s
Once tiny South Korean companies
developed explicit strategic intent
to beat their much larger Japanese
rivals
1980s
Once tiny Chinese companies
developed explicit strategic intent
to beat their much larger Asian
rivals
1990s/2000s
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© McDermott, 2014
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26. 4. KIM AND MAUBORGNE: BLUE OCEAN
STRATEGY
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© McDermott, 2014
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27. Strategy
Michael Porter
Kim & Mauborgne
Or how to
survive with a
Red Ocean
Strategy
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Developing a
Blue Ocean
Strategy
© McDermott, 2014
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32. Recognize this star, the movie and the dialogue?
Grady:
We're trying to solve the problem.
Billy:
Good. What's the problem?
Grady:
The problem is that we've lost 3 key players that we now
have to replace.
BILLY
Not like this. You're not even looking at the problem.
Okay, stop. The problem we're trying to solve is that this
is an unfair game.
There are rich teams, poor teams, 50 feet of crap and
then there's us.
Billy = Good Strategy
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Grady = Bad Strategy
© McDermott, 2014
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33. The Key Message?
Progress requires
candid admission
of the true problem
No problem = no strategy
Strategy = problem solving
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© McDermott, 2014
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35. The Problem
The Solution
How can an older, slower,
weaker, boxer who has lost
his unique competences
beat the world champion in
energy-sapping heat of
Africa?
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© McDermott, 2014
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38. What’s the “Big problem” facing these companies?
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39. What’s the “Big issue/problem” facing these
companies?
The issue or problem may not be
conspicuously obvious….but there is
one lurking within.
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© McDermott, 2014
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40. What’s the Problem?
• Most companies refuse to pose this basic
question.
• Why?
• It makes them feel very uncomfortable…it
demands admitting there is a problem
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© McDermott, 2014
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42. Strategy and Leadership
• The Porter view separates the role of the
leader from strategy.
• It ignores the importance of the strategist
(the CEO)
• This is a major error.
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© McDermott, 2014
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43. Meaning-Maker
“strategy has been narrowed to a
competitive game plan, divorcing it
from a firm's larger sense of
purpose;
the CEO's unique role as arbiter and
steward of strategy has been
eclipsed;
The Roles
of the
Strategist
The Reasoner
25/01/2014
and the exaggerated emphasis on
sustainable competitive advantage
has drawn attention away from the
fact that strategy must be a dynamic
tool for guiding the development of
a company over time” (Montgomery,
HBR, 2008)
The Operator
© McDermott, 2014
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44. The Buck Stops with the Strategist
Develop
Stated
Purpose
25/01/2014
Develop
Strategy
Articulate
Strategy in
Concise
Statement
Sets
Direction
© McDermott, 2014
Establishes
Priorities
Guides all
Activities
44
45. 1. Defines firm’s unique value.
2. Explains its relevance – why it matters
3. Easy to understand & memorable
Develop
Stated
Purpose
Develop
Strategy
25/01/2014
Articulate
Strategy in
Concise
Statement
Sets
Direction
© McDermott, 2014
Establishes
Priorities
Guides all
Activities
45
46. The Buck Stops with the Strategist
Develop
Stated
Purpose
Develop
Strategy
Sets
Direction
Establishes
Priorities
Guides all
Activities
Articulate
Strategy in
Concise
Statement
Strategy statement is important
25/01/2014
© McDermott, 2014
46
47. Strategies and Strategy Statements
The Honed Strategy &
Strategy Statement
• Sets direction;
• Establish priorities;
• Guides activity
The Weak Strategy &
Strategy Statement
• Fails to provide direction;
• Causes panic;
• Creates confusion.
Source of competitive
advantage
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Source of competitive
disadvantage
© McDermott, 2014
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48. Strategy and Strategy Statements
Effective
Ineffective
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
5.
6.
Distinctive
Provides focus – the what
Specific – the how
Explanatory and transparent
Targeted – the who
Inspirational
25/01/2014
Too Generic – could be anyone
Covers all bases
Clichés – meaningless
Baffling and opaque
Scattered
Dull
© McDermott, 2014
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49. 7. A.G. LAFLEY AND ROGER L. MARTIN
PLAYING TO WIN: STRATEGY IS FIVE
INTEGRATED CHOICES
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© McDermott, 2014
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50. "The most important thing in the Olympic
Games is not winning but taking part; the
essential thing in life is not conquering but
fighting well.“
Baron Pierre de Coubertin, founder of the
Olympics,
You play only where you can win
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© McDermott, 2014
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51. You Play only where you can Win?
Really
•
•
•
•
•
•
•
Can US auto companies beat BMW, Mercedes?
Can Walmart win in China?
Can JC Penney beat Macy’s?
Can Google win in China?
Can Avon win anywhere?
Can RIM (Blackberry) win in enterprise solutions?
Can Dell win in B2C as opposed to B2B?
25/01/2014
© McDermott, 2014
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52. Winning Demands Beating the Biggest
and also the Best
US airlines need to compete only where they
can win - beating the airlines below
The Biggest
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The Best
© McDermott, 2014
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53. How to Win
With a Low Cost Strategy
With Differentiation
• There can be only one winner!
• There can be several winners
• Whoever has the lowest costs
• But the rewards rise with the
level of differentiation
achieved.
• Focus must be on costreduction and standardization
• And a willingness to lose
customers that do not settle
for standardization
• Focus is customerunderstanding & brand
building
• High commitment to
innovation
Both strategies require the pursuit of distinctiveness
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© McDermott, 2014
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54. Strategy is Five Choices
• What is your winning aspiration?
• The purpose of your enterprise, its motivating aspiration.
Choice 1.
• Where will you play?
• A playing field where you can achieve that aspiration.
Choice 2.
• How will you win?
• The way you will win on the chosen playing field.
Choice 3
• What capabilities must be in place?
• The set and configuration of capabilities required to win in the chosen way.
Choice 4
• What management systems are required?
Choice 5 • The systems and measures that enable the capabilities and support the choices.
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© McDermott, 2014
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55. In an SME the above is sufficient.
In a large multi-business company, apply this cascade at the following levels:
• Corporate-level cascade (e.g. P&G)
• Strategic group cascade (e.g. skin care, detergents, diapers)
• Individual business cascade (e.g. Oil of Olay, Tide, Pampers)
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© McDermott, 2014
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56. Notice how this is a dynamic system.
Notice too the importance of feedback.
Thus strategy is an iterative process
Iterative
process
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© McDermott, 2014
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57. In an SME the above is sufficient.
In a large multi-business company, apply this cascade at the following levels:
• Corporate-level cascade (e.g. P&G)
• Strategic group cascade (e.g. skin care, detergents, diapers)
• Individual business cascade (e.g. Oil of Olay, Tide, Pampers)
25/01/2014
© McDermott, 2014
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58. Create fierce brand advocates;
Make a difference in the world;
Make money doing it
In its own retail stores;
Athletic wear for women
Creating technically superior
yoga wear that is also very cool
Changes stock regularly to
reinforce exclusivity & scarcity;
Customers attracted to stores
by knowledgeable staff
Product & store design;
Customer service;
Supply-chain expertise.
25/01/2014
© McDermott, 2014
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59. Create fierce brand advocates;
Make a difference in the world;
Make money doing it
In its own retail
stores;
Athletic wear for
women
Product & store design;
Customer service;
Supply-chain expertise.
25/01/2014
Creating technically superior yoga wear that is
also very cool;
Changes stock regularly to reinforce exclusivity
& scarcity;
Customers attracted to stores by knowledgeable
staff
© McDermott, 2014
Expand to:
• Accessories?
• Menswear?
• Online presence?
• Different retail formats?
• How does store employee serve
59
the customers
60. 2018
Global # 1
US sales of 1m vehicles
All actions at the model, brand,
category, sector, and company
level driven by meeting the
ideal.
25/01/2014
© McDermott, 2014
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61. What is Winning?
What is your
winning
aspiration*?
What is your
stated
purpose?
What is
your
winning
aspiration?
25/01/2014
Your
Strategy
© McDermott, 2014
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* Note the similar starting point between Montgomery and The Strategist
62. What is Winning?
What is
your
winning
aspiration?
What is
your
stated
purpose*?
Thus your winning
aspiration should
reveal your identity
This should focus
upon framing
ambitions around
the customer
25/01/2014
© McDermott, 2014
62
* Note the similar starting point between Montgomery and The Strategist
63. What is Winning?
What is
your
winning
aspiration?
What is
your
stated
purpose*?
Thus your winning
aspiration should
reveal your identity
This should focus
upon framing
ambitions around
the customer
25/01/2014
© McDermott, 2014
63
* Note the similar starting point between Montgomery and The Strategist
64. Examples of Winning Aspirations
• to inspire and nurture the human spirit – one
person, one cup and one neighbourhood at a
time.
our customers' favorite place
and way to eat and drink.
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© McDermott, 2014
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65. Examples of Winning Aspirations: Who am I?
to inspire and nurture the human spirit –
one person, one cup and one
neighbourhood at a time.
We will be the easiest pharmacy retailer
for customers to use.
Undisputed Marketplace Leadership
For Our Customers A compelling place to
shop. . . by providing convenience and
low prices For Our Associates A
compelling place to work. . . by providing
exceptional opportunities and rewards for
achievement For Our Investors A
compelling place to invest. . . by providing
outstanding returns
25/01/2014
to be our customers' favorite place
and way to eat and drink.
“To bring inspiration and innovation to
every athlete* in the world.”
“* If you have a body, you are an
athlete.”
We fulfill dreams through the
experience of motorcycling, by
providing to motorcyclists and to the
general public an expanding line of
motorcycles and branded products and
services in selected market segments.
People love our clothes and trust our
company. We will market the most
appealing and widely worn casual
clothing in the world. We will clothe
the world.
© McDermott, 2014
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66. Examples of Winning Aspirations: Who am I?
to inspire and nurture the human spirit –
one person, one cup and one
neighbourhood at a time.
to be our customers' favorite place
and way to eat and drink.
We will be the easiest pharmacy retailer
for customers to use.
“To bring inspiration and innovation to
every athlete* in the world.”
“* If you have a body, you are an athlete.”
Undisputed Marketplace Leadership
We fulfill dreams through the experience of
motorcycling, by providing to motorcyclists
and to the general public an expanding line
of motorcycles and branded products and
services in selected market segments.
For Our Customers A compelling place to
shop. . . by providing convenience and low
prices For Our Associates A compelling
place to work. . . by providing exceptional
opportunities and rewards for
achievement For Our Investors A
compelling place to invest. . . by providing
outstanding returns
People love our clothes and trust our
company. We will market the most
appealing and widely worn casual clothing
in the world. We will clothe the world.
25/01/2014
© McDermott, 2014
66
67. •
•
•
•
Our Strategy 2018 focuses on positioning the Volkswagen Group as a global
economic and environmental leader among automobile manufacturers. We have
defined four goals that are intended to make Volkswagen the best automaker in
the world by 2018:
• Volkswagen intends to deploy intelligent innovations and technologies to
become
a world leader in customer satisfaction and quality.
• The goal is to increase unit sales to more than 10 million vehicles a year;
in particular, Volkswagen intends to capture an above-average share of growth
in the major growth markets.
• Volkswagen’s aim is a sustainable return on sales before tax of at least 8%
so as to ensure that the Group’s solid financial position and ability to act are
guaranteed even in difficult market periods.
• Volkswagen aims to become the top employer across all brands, in all companies
and regions; this is necessary in order to build a first-class team.
25/01/2014
© McDermott, 2014
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69. Two Questions are at the Heart of Strategy
Where to
play?
How to
Win?
Strategy
25/01/2014
© McDermott, 2014
69
70. Winning
Aspiration
Where &
How to Play
25/01/2014
• Defines the scope of
the firm’s activities
• Defines:
• What the firm will do;
• Where; and
• How
© McDermott, 2014
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71. 1. Where to Play?
Which
markets?
Which customers
and/or
consumers?
Which
Channels?
Which Product
Categories?
Which parts of
the industry
value chain
The answers capture the strategic
playing field for the firm
25/01/2014
© McDermott, 2014
71
72. 2. How to Win?
Which
markets?
Which customers
and/or
consumers?
Which
Channels?
Which Product
Categories?
Which parts of
the industry
value chain
The recipe for success in each chosen area
25/01/2014
Competitive advantage
© McDermott, 2014
72
73. Strategy
What capabilities must be
in place to win?
What management systems are
required to support the strategic
choices?
The range & qualities of activities
necessary to win
25/01/2014
© McDermott, 2014
73
74. Strategy
What capabilities must be
in place to win?
Internal Capabilities
(e.g. Innovation, Brand
building,
merchandising
What management systems are
required to support the strategic
choices?
External Capabilities
(form partnerships with key parties such as
designers,
advertising & PR agencies, key influencers
Deepening existing capabilities
Building new capabilities
25/01/2014
© McDermott, 2014
74
75. The Core Capabilities of P&G
These five core
capabilities
support & reinforce
each other
It is the
combination of
these advantages
that confers
competitive
advantage
But this could also be Adidas or Nike?
25/01/2014
© McDermott, 2014
75
76. Two Questions are at the Heart of Strategy
How to
Win?
Where to
play?
Strategy
What capabilities must be
in place to win?
25/01/2014
What management systems are
required to support the strategic
choices?
© McDermott, 2014
76
77. 8. RITA GUNTHER MCGRATH: THE END
OF COMPETITIVE ADVANTAGE
25/01/2014
© McDermott, 2014
77
80. Think surfing, think strategy
Ride the waves – knowing when to jump “off” and stay on.
Even “good waves” are short-lived.
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© McDermott, 2014
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81. Conclusions
Strategy demands:
1. Making explicit your sense of purpose ( or statement of
mission);
2. Defining your winning aspiration;
3. Acknowledging your big problem;
4. Recognizing that new games are always emerging;
5. Choosing where to play;
6. Determining your competitive position and how you will
play.
7. Deepening and developing core competences or
capabilities;
8. Creating the systems that enable you to play successfully
25/01/2014
© McDermott, 2014
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