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ESSENCE OF STRATEGY
DISTINCTIVELY DIFFERENT FROM THE COMPETITORS
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A COMPANY CAN CONTROL ITS OWN DESTINY IF IT UNDERSTANDS HOW TO CONTROL THE DESTINY OF ITS INDUSTRY
HAMEL, PRAHLAD
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CHANGE IN SOME FUNDAMENTAL WAY THE RULES OF ENGAGEMENT IN A LONG STANDING INDUSTRY REDRAW THE BOUNDARIES BETWEEN INDUSTRIES CREATE ENTIRELY NEW INDUSTRIES
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STRATEGIC PLANNING
TOP MANAGEMENT DETERMINES ORGANISATIONAL OBJECTIVES,STRATEGIES NEEDED TO REACH THESE OBJECTIVES TOP LEVEL ACTIONS NECESSARY TO IMPLEMENT THE STRATEGY PROPERLY
TACTICAL PLANNING
SHORT RANGE PLANNING THAT IS ORIENTED TOWARDS OPERATIONS AND IS CONCERNED WITH SPECIFIC AND SHORT RANGE DETAILS
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AND
SERVES A DISTINCT PRODUCT SERVES A DISTINCT MARKET SEGMENT SERVES A DISTINCT GEOGRAPHICAL AREA
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2.
STRATEGIC DECISIONS
PERTAIN TO FUNDAMENTAL QUESTIONS IN WHAT BUSINESS THE FIRM SHOULD BE IN AND HOW IT SHOULD BE IN ?
3.
ADMINISTRATIVE DECISIONS
ORGANISE AND MOBILISE FOR THE IMPLEMENTATION OF THE CORPORATE STRATEGY
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STRATEGIC DECISIONS
KEY CHARACTERISTICS 1. 2. 3. 4. DECISIONS CENTRALISED PARTIAL IGNORANCE DECISIONS NON REPETITIVE DECISIONS NOT SELF REGENERATIVE
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OPERATING DECISIONS
KEY CHARACTERISTICS
DECENTRALISED DECISIONS RISK AND UNCERTAINTY REPETITIVE DECISIONS LARGE VOLUME DECISIONS
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ADMINISTRATIVE
KEY CHARACTERISTICS
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STRATEGIC DECISIONS
KEY DECISIONS
OBJECTIVES AND GOALS DIVERSIFICATION STRATEGY EXPANSION STRATEGY ADMINISTRATIVE STRATEGY FINANCE STRATEGY GROWTH METHOD TIMING OF GROWTH
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ADMINISTRATIVE DECISIONS
KEY DECISIONS
ORGANISATION
STRUCTURE OF INFORMATION AUTHORITY AND RESPONSIBILITY FLOWS STRUCTURE OF RESOURCES
CONVERSION, WORK FLOWS, DISTRIBUTION SYSTEMS , FACILITIES, LOCATION
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OPERATING DECISIONS
KEY DECISIONS
OPERATING OBJECTIVES AND GOALS PRICING AND OUTPUT LEVELS OPERATING LEVELS
PRODUCTION SCHEDULES INVENTORY LEVELS WAREHOUSING ETC.
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2.
3.
FUNCTIONAL STRATEGY
PRODUCTION, FINANCE, PERSONNEL, MARKETING, ETC
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LEVELS OF STRATEGY
ENTERPRISES WHICH DO NOT HAVE SBUs
1.
2.
CORPORATE STRATEGY
FUNCTIONAL STRATEGY
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1.
2.
3.
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STRATEGIC INTENT IS MORE THAN SIMPLY UNFETTERED AMBITION ACTIVE MANAGEMENT : FOCUSES THE ORGANISATIONS ATTENTION ON THE ESSENCE OF WINNING MOTIVATES PEOPLE BY COMMUNICATING THE VALUE OF THE TARGET LEAVES ROOM FOR INDIVIDUAL AND TEAM CONTRIBUTION SUSTAINS ENTHUSIASM BY PROVIDING NEW OPERATIONAL DEFINITIONS AS CIRCUMSTANCES CHANGE USES INTENT CONSISTENTLY TO GUIDE RESOURCES ALLOCATIONS
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JAPENESE COMPANIES WHICH HAD FAR LIMITED RESOURCES THAN THE EASTERN COMPANIES HAVE BECOME GLOBAL LEADERS BECAUSE OF THEIR STRATEGIC INTENT THAT STRETCHED THEIR ORGANISATION
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2.
STRATEGY DEVELOPMENT
( EVALUATION OF STRATEGIC ALTERNATIVES AND CHOICE OF STRATEGY )
3.
IMPLEMENTATION
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1.
2. 3.
ENTREPRENEURIAL MODE
ADAPTIVE MODE PLANNING MODE
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IN LARGE ORGANIZATIONS
BOARD OF DIRECTORS GENERAL MANAGERS CORPORATE PLANNING STAFF EXTERNAL CONSULTANTS
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BOARD OF DIRECTORS
THE ULTIMATE LEGAL AUTHORITY IN THE BUSINESS THEY ARE RESPONSIBLE TO THE STOCKHOLDERS MANAGERS TAKE PRUDENT ACTIONS REGARDING CORPORATE OBJECTIVES APPROVING MAJOR FINANCIAL AND OPERATIONAL DECISIONS
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GENERAL MANAGERS ARE THE TOP EXECUTIVES OF THE ENTERPRISE & SBUS RESPONSIBLE FOR THE SURVIVAL AND SUCCESS OF THE ENTERPRISE
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GENERAL MANAGER
ORGANISATION BUILDER ..
LEADER
( ORGANISES )
( DIRECTS )
CHIEF IMPLEMENTER .
( ONTROLS )
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THERE CAN AND WILL BE NO EFFECTIVE FORMAL STRATEGIC PLANNING IN AN ORGANISATION IN WHICH THE CHIEF EXECUTIVE DOES NOT GIVE IT FIRM SUPPORT AND MAKE SURE THAT OTHERS IN THE ORGANISATION UNDERSTAND HIS DEPTH OF COMMITMENT
GEORGE STEINER
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STRATEGIC MANAGEMENT PROCESS HAS THREE PHASES INVOLVING A NUMBER OF SYSTEMATIC STEPS 1. STRATEGY FORMULATION 2. IMPLEMENTATION 3. EVALUATION AND CONTROL
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SWOT ANALYSIS
IMPLEMENTATION
CHOICE OF STRATEGY
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THE ART AND SCIENCE OF FORMULATING , IMPLEMENTING AND EVALUATING CROSS FUNCTIONAL DECISIONS THAT ENABLE AN ORGANISATION TO ACHIEVE ITS OBJECTIVES.
STRATEGIC MANAGEMENT
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TERM STRATEGIC ( IN STRATEGIC MANAGEMENT ) MEANS PERTAINING TO THE RELATION BETWEEN THE FIRM AND ITS ENVIRONMENT
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1. DOES IT -- CONFORM WITH CORPORATE PHILOSOPHY ? 2. DOES IT -- ACCOMPLISH THE MISSION AND OBJECTIVES ? 3. DOES IT -- EXPLOIT ORGANIZATIONAL STRENGTHS AND ENVIRONMENTAL OPPORTUNITIES ? 4. DOES IT -- COMBAT ENVIRONMETAL THREATS AND OVERCOME INTERNAL WEAKNESSES ? 5. IS THE STRATEGY CONSISTENT ?
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1. SOMETIME MAKES THE ORGANIZATOIN OVER AMBITIOUS AND THE RESULTANT FAILURE --- CAUSE FRUSTRATION
2. MAKES THE FUTURE VISION TUNNELED THAT SEVERAL OPPORTUNITIES MAY BE OVERLOOKED
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1. RESOURCE ALLOCATION
2. LEADERSHIP IMPLEMENTATION
3. RIGHT STRUCTURE
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LIBERALIZATION ON
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A CUSTOMER DRIVEN DEFINITION OF QUALITY STRONG QUALITY LEADERSHIP EMPHASIS ON CONTINUOUS IMPROVEMENT RELIANCE ON FACTS, DATA , AND ANALYSIS ENCOURAGEMENT OF EMPLOYEES PARTICIPATION
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CUSTOMERS LOYALTY ORGANIZATION RESPONDING TO PROBLEMS , NEEDS AND OPPORTUNITIES ENCOURAGES TEAM WORK AND MAKES WORK MORE SATISFYING
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CUSTOMERS PERSPECTIVE
COMPETITORS PERSPECTIVE
SUPPLIERS PERSPECTIVE
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CUSTOMER NEEDS
CUSTOMER PREFERENCES
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A TOTAL QUALITY MANAGEMENT INITIATIVE AFFECTS EVERY STEP IN THE STRATEGIC MANAGEMENT PROCESS IT FOCUSSES
1 2. 3. FIRMS ENVIRONMENTAL ANALYSIS ORGANISATIONS VISION AND MISSION KEEPING OBJECTIVES TIED SECURELY TO CUSTOMERS NEEDS