1. WHY DO GREAT COMPANIES FAIL UNPARALLED TRACK RECORD OF SUCCESS NO GAP BETWEEN EXPEC- TATIONS & PERFOR MANCE ACCUMULATION OF ABUNDANT RESOURCES OPTIMISED BUSINESS SYSTEM SUCCESS CONFIRMS STRATEGY A VIEW THAT RESOURCES WILL WIN OUT DEEPLY ETCHED RECEPIES MOMENTUM IS MISTAKEN FOR LEADERSHIP CONTENTMENT WITH CURRENT PERFORMANCE RESOURCES SUBSTITUTE FOR CREATIVITY VULNERABILITY TO NEW RULES FAILURE TO “ REINVENT” LEADERSHIP INABILITY TO ESCAPE THE PAST INABILITY TO INVENT THE FUTURE
2. Successful Business strategy Competitiveness Growth and profits Managers begin To believe They are best Build layers of staff To cope with growth External arrogance And internal focus On control Decline into Satisfactory Under performance Initiative and Innovation stifled Dynamics of satisfactory underperformance
3. Corp profile AVERAGE ANNUAL INCREASE IN STOCK PRICE- 1977-1988 6.5 Company ‘ A’ 13.6 Company ‘ B’ 45.5 Company ‘ C’ 10% 20% 30% 50% 40%
5. THE VIRTUOUS CIRCLE SUPERIOR DDTS/ SERVICE CUSTOMER SATISFACTION FEWER CUSTOMER DEFECTIONS HIGH PROFITS GROWTH INVESTMENT TO ENHANCE PRODUCTIVITY INVESTMENT IN HR EMPLOYEE SATISFACTION DEDICATED WORK TEAM
6. THREE KINDS OF THINKING PROCESS MECHANICAL SYSTEMS HINKING PROBLEM PROTOTYPE INTUTION STRATEGIC THINKING . SOLUTION PROCESS OF THOUGHT REARRANGEMENT OF ELEMENTS LOCAL OPTIMIZATION OR SEEING TREE NOT THE FOREST TRANSFORMATION OR CHANGED CONFIGURATION ANALYSIS OF ESSENCE
7. A HABIT CHARACTER SOW A THOUGHT AN ACTION A HABIT CHARACTER DESTINY SOW REAP SOW SOW REAP REAP REAP AN ACTION
8. Basic definitions Strategic management —refers to the managerial process of forming a strategic vision,setting objectives, crafting a strategy; implementing and executing the strategy,and then over time initiating whatever corrective adjustments in the vision, objective, strategy, and execution are deemed appropriate. Strategic vision —is a road map of a company’s future—providing specifics about technology and customer focus,the geographic and the product markets to be pursued, the capabilities it plans to develop and the kind of company that management is trying to create. Mission statement – is typically focused on its present business scope—”who we are and what we do;”mission statement broadly describe an organization’s present capabilities, customer focus, activities, and business makeup. Objectives —are an organization's performance targets—the results and outcomes it want to achieve. They function as yardsticks for tracking an organization’s performance and progress. Strategic objectives —relate to outcomes that strengthen an organization’s overall business position and competitive vitality
9. Mission statement-IBM THE INDIVIDUAL MUST BE RESPECTED EXCELLENCE & SUPERIOR PERFORMANCE MUST BE PURSUED THE CUSTOMER MUST BE GIVEN THE BEST POSSIBLE SERVICE
10. Tasks of strategic management SETTING OBJECTIVES STRATEGY TO ACHIEVE OBJECTIVES IMPLEMENTING AND EXECUTI;NG STRATEGY EVALUATION AND CONTROL DEVELOPING STRATEGIC VISION AND MISSION REVISE AS NEEDED REVISE AS NEEDED IMPROVE/ CHANGE AS NEEDED IMPROVE/ CHANGE AS NEEDED RECYCLE TO TASKS 1,2,3.4 AS NEEDED TASK - 1 TASK -2 TASK-4 TASK-3 TASK-5
11. Strategy factors internal/ external Economic Societal Political Regulatory & Community considerations Competitive Conditions and Overall industry attractiveness Company Opportunities & Threats to the Company’s Well-being The mix of considerations that Determine a company’s strategic situation Company resources Strengths/weaknesses Competencies And Competitive capabilities Personal ambitions Business Philosophies & Ethical principals To key executives Shared values And Company culture Identification Evaluation Of Strategy alternatives Conclusions About Factors On Implications For strategy Crafting Strategy That fits The Overall situation Internal factors External factors
12. The Business System Diamond Jobs and structure Management and measurement system Business Process Values and beliefs
13. ENVISIONING THE OPPURTUNITIES CREATE A VISION OF THE FUTURE ASSES THE FIRM’S FUTURE ENVIRONMENT DEFINE THE SCOPE OF INNOVATION SET STRATEGIC DIRECTIONS & PRIORITIES TO SEEDING STAGE CREATING A VISION 1. WHAT DO WE WANT TO STAND FOR AS A COPRPORATION. 2. WHAT KINDS OF PRODUCTS DO WE WANT TO OFFER. 3. WHAT KIND OF CUSTOMERS DO WE WANT TO SERVE 4. WHAT DO WE WANT OUR PRODUCTS TO MEAN TO OUR CUSTOMERS.
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19. Formulating Product/Market Strategies MARKETS Existing New OFFERINGS Existing New Diversification New offering development Market development Market penetration
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28. DECOMPOSING THE ECONOMIC ENGINE CONCEPT OF SERVED MKT -1- REVENUE & MARGIN STRUCTURE -2- CONFIGRATION OF SKILL & ASSETS -3- FLEXIBILITY & ADAPTIVENESS -4- WHAT IS OUR BASIC VALUE POSITION? HOW HAVE WE SEGMENTED THE MARKET? WHAT KIND OF CUSTOMERS DO WE SERVE? WHERE ARE OUR CUSTOMERS? WHERE IN THE BUSINESS SYSTEM WE TAKE PROFIT? WHERE DO OUR MARGINS COME FROM? WHAT HAS DETERMINED THE SIZE OF THE MARGIN? WHAT ARE THE MAJOR COST & PRICE DRIVERS? WHAT DO WE BELIEVE WE KNOW HOW TO DO WELL? WHAT KINDS OF SKILLS PREDOMINATE IN OUR INDUSTRY? WHAT IS THE TRAJECTORY OF OUR DEVELOPMENT SPENDING? HOW ALERT ARE WE TO NEW VALUE DELIVERY MODELS? HOW EASILY COULD INVESTMENTS PROGRAMME BE RECONFIGURED? WHICH CONSTITUENCIES WOULD RESIST CHANGE?
29. FINDING THE LIMITS OF THE CURRENT ECONOMIC ENGINE -1- -2- -3- - 4- WHAT CUSTOMER NEEDS ARE’T WE SERVING . COULD PROFITS BE EXTRACTED AT A DIFFERENT POINT IN THE VALUE CHAIN. MIGHT CUSTMER NEEDS BE BETTER SERVED BY AN ALTERNATE CONFIGURATION OF SKILLS & ASSETS. WHAT IS OUR VULNERA- BILITY TO’ NEW RULES’ OF THE GAME
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31. Porter’s model Firms in other industries offering substitute products Rivalry among competing sellers Competitive pressure created by jockeying for better market position and comptt advantage Potential new entrants Buyers Suppliers of raw materials, parts, components etc .
32. Means to competitive advantage Competitive advantage Strategic assets And market achievements Core and distintictive competencies Core capabilities Company resources
37. Multi-factor grid B Selective Development (problem children) C Offensive Growth (stars) A Disinvestments (dogs) D Low profile (cash cows) weak weak attractiveness average average high high competitiveness
38. Evaluation of MFPG MFPG Basically leads to same kind of analysis as BCG matrix but the major difference is that the link between the competitiveness and financial performance is lost.
39. Strategy levels Corporate strategy Business strategies Functional strategies Operating strategies Corporate level managers Business level general mangers Heads of functional areas within business unit or division Plant managers,geographic unit managers
40. Company value chain Purchased Supplies and Inbound logistics operations Sales and marketing Distribution And Outbound logistics service Profit margins Product –technology and systems development General administration Human resources management Primary activities and costs Support Activities & costs
