Beruflich Dokumente
Kultur Dokumente
outside an organization
Involve change (sometimes considerable and
sometimes incremental)
Levels of Strategy
Corporate Level
Strategy
Business Level
Strategy
Operational
Strategy
Levels of Strategy
Corporate Level Strategy
Concerned with the overall purpose and scope of the
whole organization and how value will be added to the
different business units of the organization
Resource allocation, geographical coverage and diversity
of products or business units
Operational Strategies
Concerned with how the component parts of an
organization deliver effectively the corporate and business
level strategies in terms of resources, processes and
people
Strategic Choices
Concerned with the options for strategy in terms of both the directions in
which strategy might move and the methods by which strategy might be
pursued
Strategy in Action
Concerned with ensuring that chosen strategies are actually put into
practice
Introducing and implementing change, monitoring and evaluating
implemented strategies is crucial
Key Terms Used in Strategic Management
Vision
Mission
Goal
Objective
Strategic Capability
Competitive advantage
Key Terms Used in Strategic Management
Vision
Where the organization wants to be in the future
Engro Foods will continue to make investments aimed at impacting lives and
delighting consumers each day, every day, in a multitude of ways
Mission
What the organization stands for
Reason for existence
Scope of organizations markets and products
Provides legitimacy
Arif Habib Corporations Mission:
Our mission is to excel in perceiving, developing and executing innovative projects across
business sectors with the aim of maximizing returns for stakeholders, while playing a
significant role in developing Pakistans economy and its integration into the world markets
Key Terms Used in Strategic Management
Goal
It is the desired future state
It is set for the long-term
Objective
More precise aim in line with the goal
Quantified and short-term oriented
Key Terms Used in Strategic Management
Strategic Capability
Resources and competences of an organization needed
for it to survive and prosper
Competitive Advantage
Anything that a firm does especially well compared to rival
firms or owns something which the rival firms dont
Strategic management is all about gaining and sustaining
competitive advantage
Views of Strategy Development
Strategists:
Who?
Strategising Strategising
activities: methodologies:
What? Which?
The Practice of Strategy
Strategy has to be made, by the right people doing
the right things in the right way
Have direct, up-to-date experience of the realities of their organisation and its
markets
Better positioned to implement strategy because of their direct contact with first
line managers and their sub-ordinates
Thus, involving middle managers can lead to better strategic decisions and
implementation
Strategy Consultants
Often used for strategy development in large organisations
Big names are Boston Consulting Group, Bain, Monitor, and
McKinsey & Co.
Consultants aid in:
Analysing, prioritising,
and generating options
Transferringknowledge
Transferring knowledge
High
Who to include in Strategy?
Issues, which are less urgent but imply high strategic change,
can benefit from a broader participation (e.g. global/domestic
growth opportunities)
Who to include in Strategy?
Strategy Analysis
Analysis may serve purposes other than the input into good strategic
decisions
Prestigious consulting firms are often used for political and symbolic
analyses
Strategic Issue Selling
Strategic issue an unresolved question requiring a decision
The process of winning the attention and support of top management and
other important stakeholders for strategic issues
What gets top management attention is not necessarily the most important
issues
Some decision makers are over-optimistic and some are risk-averse (in
situations where little data is available)
Strategy workshops
Strategy projects
Hypothesis testing
A clear mandate
Top management commitment
Milestones and reviews
Appropriate resources
Hypothesis Testing
Generation of Prescriptive
Testing of
Descriptive Hypothesis /
Hypothesis
Hypothesis solution
Business Cases and Strategic Plans
A business case provides the data and argument in support of
failure?
structures of meaning
Organisational Culture in Four Layers
Organisational Culture in Four Layers
Values
Are often written statements of the degree of importance an
organisation attaches to certain factors
The core values of Lucky Cement are: ethics and integrity, excellence,
innovation, customer focus, social responsibility and entrepreneurship
(source: Annual Report, 2011)
Beliefs
More specific, but may not be written down
Paradigm
Difficult to identify and explain because they are not talked about too
often
They are taken for granted assumptions and beliefs like we exist to
This implies that they are captured by their culture and refuse
to change their culture
external environment
to interpret
The effects of such drift are not visible earlier on and the organisation
Blame games
downturn in performance
Stories
are about the successes, disasters, heroes, villains
Power Structures
Powerful executives have strong association with long established ways
of doing things
Control Systems
Vis--vis performance measurement and reward systems
Organisational Structure
Reflects power and shows important roles and relationships
The Environment
How do we analyse the macro environment of an organisation?
strategic customers?
Changes in the environment affect firms and they need to adapt the
environment
each scenario
Building Scenarios
Typically better to have two or four scenarios, avoiding an
easy mid-point
Scenarios are especially useful where:
Power of Buyers
The most immediate customers of the firm
Concentrated buyers
Concentrated suppliers
We also need to know what are the critical success factors for
competing successfully in our chosen segment
Competitors and Markets
Strategic Groups
Organisations within an industry with similar strategic
Market Segments
The concept of market segment focuses attention on
paramount importance
Competitors and Markets
Critical Success Factors
Are those product features that are particularly valued by a group of
Pakistan
Customers value branch network, customer service, free online
banking, free POs/DDs, free cheque books, free debit card, free
SMS banking, free business and cash insurance
Faysal Business First, HBL Freedom Account, NIB Saudagar
Account
Strategic Capability
Strategic capability is the resources and competences of an
Resources
Anything which provides benefit to the organisation is an
organisational resource
Unique Resources
Those resources that critically underpin competitive advantage and
Core Competences
the skills and abilities by which resources are deployed through an
survive
Achieving competitive advantage requires organisation to have
advantage
If prices rise too high then customers will sacrifice value and opt
acceptable price
Competitive rivalry also requires firms to focus on reducing costs
Cost Efficiency
Sources of Cost Efficiency
Economies of scale
Supply costs
Product/process design
Experience
Experience Curve
An organisation undertaking any activity develops
experience
First mover advantage is important
Experience Curve
Capabilities for Achieving and Sustaining Competitive
Advantage
Strategic capability should be:
Valuable (Motor bike consumers are important for us. So what we have done for them is that
we have introduced Biker Zone for them on our sites where there is a proper bike mechanic
available who can change the bikes oil and provides maintenance services for the bike)
Rare
Inimitable
Non-substitutable
Dynamic (We are smaller and new. This means we are more compact and able to take quick
decisions. If you ask dealers, they will tell you that a problem which Shell resolves in six
months, TOTAL resolves that problem in one month. )
Diagnosing Strategic Capability
The Value Chain
Managers need to understand which activities they undertake are
product
product to customers
The Value Chain
activities