Strategy in Action

Strategy Vector & Co-evolutionary Lock-In

A study in Intel’s Andy Grove (1987-1998)

Kanaka, MSc
 Strategic Management
“Strategic management is an ongoing process that
assesses the business and the industries in which the
company is involved; assesses its competitors and
sets goals and strategies to meet all existing and
potential competitors; and then reassesses each
strategy annually or quarterly [i.e. regularly] to
determine how it has been implemented and
whether it has succeeded or needs replacement by a
new strategy to meet changed circumstances, new
technology, new competitors, a new economic
environment., or a new social, financial, or political
environment.” (Lamb, 1984:ix)
 Strategic Management
• Strategy Formulation
– Analysis & Evaluation (internal & external, micro &
macro, SWOT, PEST & RBV)
– Setting Objective (Vision & Mission, Financial,
strategic & tactical)
– Setting Strategic Plan
• Strategy Implementation
• Strategy Evaluation
 Strategic Management
• Strategy Implementation
– Resource Allocation
– Organizing Structure :chain of commands.
– Managing Process :monitor & benchmark
variances
• Strategy Evaluation
– How effective ?
– SWOT
 Strategic Management
• Organizational Approach

• Sociological Approach

• Bottom up or Top down Approach

 Strategy in Action
Internal Ecology Model
– Induced :
• Exploiting internal initiative
• Creating environment for Middle Managers to Initiate
transition
– Autonomous :
• Exploring outside current strategic Recognizing external
transition
 Strategic Vector
• (Intel’s) Grove’s Vectoring :
– Magnitude & Direction
– Aligning Strategy & Action
– Strategy & Leadership Style
– Gordon Moore  Andy Grove  Craig Barnet
• Strong Leadership
• CEO driven strategy
• Centralized structure
• Tight Resource Management
 Co-evolutionary Lock-In
– Strategic Intent VS structures & processes
• Structure & process may impede progress
– Horizontal VS Vertical
• Different market & condition requires different
direction of growth
– Power VS Autonomy
• Power can stifle autonomy
– To avoid being locked :
• Strategy must be adaptive
• Learning while progressing
 Strategic Inertia Example
• Intel Proshare
– Video conferencing creates demand for
microprocessor
– Strong strategic intent ($750M)
– Similar approach to microprocessor marketing
– Frank Gill , SE
– Lesson learned :
• Too strong push
• Need vertical focus
 Strategic Inertia Example
• Hood River Project
– PC is electronic entertainment
– Internal funding runs out
– Network computer threat
– Lesson :
• Over forecasting (1M  10K’s)
 Strategic Inertia Example
• PCI Chipset for PCI bus (1990’s)
– Initially undervalued project
– Ron Smith pursued as new business
– Over-performed
– Became part of microprocessor strategy
• Networking (1990’s)
– Viewed as distraction
– Frank Gill : need to spend time in non strategic products
– Limited support, limited resource
– New GM (1977) able to show importance  full support
 Why Strategies Fail ?
• Fail to obtain • Fail to understand the
commitment customer
• Fail to Follow Up • Fail to understand the
• Fail to coordinate environment
• Over estimate of • Fail to Manage Change
competence & Under
estimate or resource
(Money, People, Time)

Communicate, Communicate & Communicate

 End Class

"Teach the young people how to think, not

what to think.“ (Sidney Sugarman )