anna.rosinus@fh-mainz.de Anna Rosinus Strategic Management what does this course cover?
Management& Organisation: what is? contribution? influences? differences/types? stakeholder/shareholder hierarchy entrepreneurship corporate governance Success: what is? why is it necessary? how to achieve? how to measure? (growth vs. profitability vs. value creation) Resources/Capabilities: what is/are? contribution? influences? differences? how to analyse? internal analysis distinctive competencies Environment: what is? contribution? factors/dimensions? external analysis five forces competitive intelligence benchmarking Strategy: what is? contribution? influences? differences/types? who decides? analysis-formulation- implementation-control 2 Anna Rosinus Outline Introduction to Strategic Management Environmental Scanning & Industry Analysis Internal Scanning & Organisational Analysis Strategy Formulation Situation Analysis & Business Strategy Corporate Strategy Functional Strategy & Strategic Choice Strategy Implementation organising for Action Staffing & Directing Evaluation & Control Entrepreneurship Corporate Governance, Sustainability, Globalisation
what to expect? 3 Anna Rosinus Introduction to Strategic Management Definition(s) Process Phases (Basic Model of Strategic Management) Organisational Adaptation Learning Organisations - Organisational Learning Recent Developments & Challenges to Strategy Benefits of Strategic Management Strategic Decision-Making what to expect? 4 Anna Rosinus Strategic Management - Definitions the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resource necessary for carrying out these goals (Chandler, 1963) competitive strategy is about being different. it means deliberately choosing a different set of activities to deliver a unique mix of value (Porter, 1996) a pattern in a stream of decisions (Mintzberg, 2007) set of managerial decisions and actions that determines the long-run performance of a firm (Wheelen/Hunger, 2012) strategy is about winning (Grant, 2010) the long-term direction of an organisation (Johnson et al. 2012) https://www.youtube.com/watch?v=ibrxIP0H84M what is strategy? what is strategic management? 5 Anna Rosinus Basic Questions Where is the organisation now? NOT Where do we want it to be? If everything stay as it is, i.e. nothing is changed, where will the organisation be in 1 year, 2, 5 or 10 years? Is that acceptable? If not: what has to be changed? What specific actions should management undertake in the future? What are the risks and payoffs involved? keeping it simple source: Wheelen, Hunger (2012) 6 Anna Rosinus Strategic Management Model what are the different steps in strategic management? strategy formulation strategy implementation evaluation and control environmental scanning 1 2 3 4 7 Anna Rosinus Environmental Scanning: Gathering information
Strategy Formulation: Developing long-range plans Strategy Implementation: Putting Strategy into Action Evaluation and Control: Monitoring Performance Mission Objec- tives Strate- gies Policies Pro- grams Bud- gets Proce- dures Performance Feedback/Learning: Make corrections as needed
External: Opportunities and Threats Internal: Strengths and Weaknesses Strategic Management Process in Detail source: Wheelen, Hunger (2012) 8 Anna Rosinus Strategic management Process (1) source: Wheelen, Hunger (2012) Environmental Scanning External: Opportunities and Threats Natural Environment: Resources and climate Societal Environment: General forces Task Environment: Industry analysis Internal: Strengths and Weaknesses Structure Chain of command Culture, beliefs, expectations, values Resources: Assets, skills, competencies, knowledge Strategy Formulation Strategy Implementation Evaluation and Control 9 Anna Rosinus Environmental Scanning External Analysis what should be done? 10 Anna Rosinus Strategic management Process (2) source: Wheelen, Hunger (2012) Mission Reason for existence
Objectives What resul t s t o accompl i sh by when Strategies Plan to achieve the mission, vision & objectives Policies broad guidelines for decision- making Environmental Scanning Strategy Formulation Strategy Implementation Evaluation and Control 11 Anna Rosinus Strategy Formulation Mission, Vision etc. what should be done? To organize the worlds information and make it universally accessible and useful. a classic example (etched in bronze at Newport News Shipbuilding), unchanged since its founding in 1886:
We shall build good ships here at a profit if we can at a loss if we must but always good ships. 12 Anna Rosinus Strategy Formulation SWOT/TOWS-Analysis what should be done? 13 Anna Rosinus Strategy Types what should be done? 14 Anna Rosinus Strategic management Process (3) source: Wheelen, Hunger (2012) Programs Acti vi ti es needed to accompl i sh a pl an Budgets Costs of the programs Procedures Sequence of steps needed to do a job Environmental Scanning Strategy Formulation Strategy Implementation Evaluation and Control BMW objective: increasing production efficiency by 5% each year programs: 1. shorten new model development time from 60 to 30 months 2. reduce preproduction time from a year to no more than five months 3. build at least two vehicles in each plant so that production can shift among models depending upon demand 15 Anna Rosinus Strategy Implementation Example: SOPs what should be done? source: 2.bp.blogspot.com; mcdonalds.com.hk Anna Rosinus Strategic management Process (3) source: Wheelen, Hunger (2012) Performance actual results Environmental Scanning Strategy Formulation Strategy Implementation Evaluation and Control 17 Anna Rosinus Phases of Strategic Management how did strategic management change over time? basic financial planning forecast-based planning externally oriented strategic planning strategic management organisational adaptation learning organisations 18 Anna Rosinus Strategy and Strategic Fit does a company have to adapt to its environment? the company
goals and values
resources and capabilities
structure and systems the industry environment
competitors
customers
suppliers STRATEGY & creating strategic fit 19 Anna Rosinus Organisational Adaptation = obtaining and preserving strategic fit of a company and its (industry) environment
theory of population ecology (no adaption at all; inertia, replacement) institution theory (adaptation through imitation) strategic choice perspective (adaptation to changing environments + changing the environment, rational decision-making) Organisational Learning theory does a company have to change with its environment? 20 Anna Rosinus Organisational Learning Learning Organisations Learning organisation: an organisation skilled at creating, acquiring, and transferring knowledge and modifying its behaviour to reflect new knowledge and insights
How to? solving problems systematically experimenting with new approaches learning from past experience, history and experiences of others transferring knowledge quickly and easily throughout the organisation how can organisations change? 21 Anna Rosinus Recent Developments & Challenges governance issues globalisation x-commerce & digitalisation in general sustainability requirements other trends?
to be detailed later ( 8.) what implications do global trends have on strategic management? 22 Anna Rosinus Benefits of Strategic Management answers to the following questions: what is the companys vision what does it aim at? what is really i.e. strategically important? what happens in the companys environment? who are the competitors? what do customers want? etc. improvements in terms of: operational efficiency, strategic thinking, and organisational learning matching the organisations environment with its strategy, structure and processes why do we need strategic management? 23 Anna Rosinus Strategic Decision Making focus on the long-run future of the organisation
characteristics of strategic decision making include: rarity impact directivity what makes a decision strategic ? 24 - 1 Anna Rosinus Strategic Decision Making focus on the long-run future of the organisation
characteristics of strategic decision making include: rarity impact directivity what makes a decision strategic ? 24 - 2 Anna Rosinus Mintzbergs Modes of Strategic Decision Making entrepreneurial adaptive planning
logical incrementalism (Quinn) how can strategic decisions be made? 25 Anna Rosinus Environmental Scanning & Industry Analysis environmental scanning (natural, societal environment - PESTLE) industry analysis (task environment 5 Forces) competitive intelligence trends and forecasting what to expect? 26 Anna Rosinus v Strategic management Process (1) Environmental Scanning
External: Opportunities and Threats Natural Environment: Resources and climate Societal Environment: General forces Task Environment: Industry analysis Internal: Strengths and Weaknesses Structure Chain of command Culture, beliefs, expectations, values Resources: Assets, skills, competencies, knowledge Strategy Formulation Strategy Implementation Evaluation and Control 27 Anna Rosinus Environmental Variables (PESTEL) which external variables should be considered? adapted from Wheelen, Hunger (2012) customers societal environment ( =macroenvironment) task environment ( =microenvironment) internal environment competitors suppliers general public ecological political-legal socio-cultural technological economic natural environment climate wildlife physical resources structure culture resources
28 Anna Rosinus PESTLE-Criteria what to look at in the societal/macro environment? s o u r c e :
W h e e l e n / H u n g e r
( 2 0 1 2 )
29 Anna Rosinus Example PESTLE-Analysis: Pharmaceuticals Anna Rosinus PESTLE-Analysis Red Bull, i.e. energy drinks political economic socio-cultural technological legal ecological group work Anna Rosinus Repetition: Industries, Markets and Sectors industry: a group of firms producing products and services that are essentially the same, e.g. the automobile industry market: a group of customers for specific products or services that are essentially the same, e.g. the market for luxury cars in Germany market segment: a group of customers with similar needs that are different from customer needs in other market segments, e.g. the silver surfer-segment in the consumer electronics market sector: a broad industry group (or a group of markets), e.g. the health sector what are we talking about? 30 Anna Rosinus Repetition: Industry Types monopolies: only one firm and therefore no competitive rivalry, monopoly power = a dominant position in the market, e.g. google oligopolies: a few firms dominate => limited rivalry, the oligopolists have power over buyers and suppliers, e.g. Boeing and Airbus perfect competition: low barriers to entry, many equal/similar rivals, sound information, industries often show only some features of perfect competition, e.g. mini-cabs in London hypercompetition: frequent, bold and aggressive competitor interactions => constant disequilibrium and change, e.g. smartphones what are we talking about? 31 Anna Rosinus Example Hypercompetition: Tour de France practical application source: bicyclinghub.blogspot.de; upload.wikimedia.org; zeit.de/sport/tour-de-france.html Anna Rosinus Further Examples Hypercompetition practical application https://www.youtube.com/watch?v=9n5pTNq5JWk Anna Rosinus Issues-Priority-Matrix probable impact on company p r o b a b i l i t y
o f
o c c u r e n c e
low high l o w
low priority medium priority h i g h
high priority how to define priorities? 33 Anna Rosinus Strategic Myopia why dont we reject major changes in the environment? dailymail.co.uk RIM: A story of missed opportunities Robin Chan Anna Rosinus Task Environment Analysis: Porters Five forces existing competitors suppliers substitutes customers new entrants (potential competitors) what to look at in the task environment? adapted from Porter, M. (1979) in general: weak forces enhance profit (potential), whereas strong forces limit profits vertical forces horizontal forces example of a simplified supply chain supplier (input factors such as intermediate products and/or raw material, e.g. milk) manufacturer (e.g. yogurt) retailer (e.g. rewe, carrefour, tesco) end customers, consumers 35 Anna Rosinus Porters Five forces: New Entrants new entrants add production capacity, strive for market share and profits likelihood of entrance is largely dependent on market entry barriers such as: initial lump sum investment and other fixed costs ( economies of scale) product differentiation & marketing ( existing consumer preferences) market saturation level of switching costs, consumer lock-in, established industry standards, network effects/externalities access to distribution channels (e.g. shelf space) government policies
what determines the intensity of the forces? 35 - 1 Anna Rosinus Porters Five forces: Substitutes substitutes = products that appear to be different but can satisfy the same need as another product
what determines the intensity of the forces? 35 - 2 Anna Rosinus Porters Five forces: Substitutes substitutes = products that appear to be different but can satisfy the same need as another product
what determines the intensity of the forces? 35 - 3 Anna Rosinus Porters Five forces: Customers/Buyers buyers bargaining power is high where plenty alternatives/substitutes low switching costs purchased volume accounts for a large share of your total sales, in general linked to small number of different customers (ABC) threat of backward integration cost/price sensitive (e.g. cost of purchased good accounts for a large share of their total costs) quality = relatively unimportant (e.g. input factors as commodities) transparency and availability of price and quality information what determines the intensity of the forces? 35 - 4 Anna Rosinus Porters Five forces: Suppliers suppliers bargaining power is high where few plenty alternatives/substitutes high low switching costs purchased volume accounts for a minor large share of their your total sales threat of forward backward integration quality = relatively unimportant (e.g. highly specialised inputs) what determines the intensity of the forces? 35 - 5 Anna Rosinus Porters Five forces: Existing Competitors rivals are interdependent companies, whose strategic moves may cause retaliation competitive intensity depends on: number (& diversity) of companies involved ( perfect competition, but a small number of competitors doesnt automatically imply no rivalry) growth of the market/industry characteristics of products/services: commodities vs. differentiated/ specialised products exit barriers (comp. entry barriers, in particular lump-sum investments, highly specialised equipment) largely linked to Industry Life Cycle () what determines the intensity of the forces? 35 - 6 Anna Rosinus Industry Life Cycle what determines the competitive intensity of an industry? Johnson et al. (2011) 36 Porters 5 forces 47 competitive rivalry (intensity) customers (buyers) bargaining power substitute products or services (threat) suppliers bargaining power new competition (threat) Anna Rosinus Determine Porters Five forces for either Audi or Coca Cola group work Anna Rosinus Implications of Five Forces Analysis in general: understanding the drivers of attractiveness and profitability before market entry: identification of industry attractiveness which industries/markets to enter? after market entry identification of strategies that can influence the five forces, e.g. vertical integration aimed at building/raising barriers to entry OR creating customer lock-in what does that tell us? 37 Anna Rosinus Porters Five Forces: Some Comments problems: defining industries and markets properly in particular how narrow/broad... e.g. BMW is No. 11 in the global automobile industry, but No 1 in the luxury segment 1 converging and/or overlapping industries e.g. digital industries with mobile phones/cameras/mp3 players updates: consideration of other stakeholders and/or complements as 6 th force: complementary organisations enhance the attractiveness of a business to customers or suppliers, e.g. e-book stores and e-book readers (NOT amazon) what are potential shortcomings? 1) data source: OICA 2012 38 Anna Rosinus Competitive Intelligence primary activity of competitive intelligence (business intelligence) is to monitor competitors in order to support strategic planning competitive intelligence is a systematic program for gathering and analyzing information about your competitors activities and general business trends to further your own companys goals. 1
sources of competitive intelligence: internet (incl. social media, investor relations websites ) press financial reports trade shows information brokers drawing a distinct boundary between legal and ethical business practices as mentioned above and industrial espionage is crucial but nor easy how to monitor competitors? 1) Kahaner, L. (1997) 39 Anna Rosinus Benchmarking comparing an organisations performance (typically a set of performance indicators or key success factors, such as quality, price, innovation) with others (typically its competitors) 2 approaches: industry/sector benchmarking: comparison with other organisations in the same industry/sector best-in-class benchmarking: comparison of an organisations performance or capabilities with best-in-class wherever that is found, e.g. British Airways benchmarked its refuelling operations against Formula 1 related approach: strategy canvas comparison with competitors basis: critical success factors result: blue oceans ()
how to evaluate ones performance? Johnson et al. (2011) 40 Anna Rosinus Benchmarking different kinds of visualisation: radar (or spider) chart line chart various possibilities, e.g. : comparison with 1 or 2 selected competitors comparison with the closest or the worst and the best performer in the industry comparison with the best-in-class how to? identification of key success factors evaluation of the companies, ideally in a workshop and/or by consulting external experts visualisation & discussion of conclusions how to evaluate ones performance? source: jboye.com ; atkearney.de 41 Anna Rosinus Benchmarking related approach: strategy canvas comparison with competitors basis: critical success factors result: blue oceans ()
how to evaluate ones performance? Johnson et al. (2011) Anna Rosinus Example: Benchmarking 1. Please list the key success factors (KSF) for the smartphone industry (column 1) 2. Please compare the performance of Apple and Samsung (columns 2&3) 3. visualise your results (use the right hand part of the table as grid lines) (e.g. use 0 as worst and 5 as best rating) group work further key success factors: performance/speed, battery, connectivity, additional services warranty/guarantee as well as support (software updates), camera, Operating System KSF Apple Samsung worst best design 4 3 image 4 3-4 price 2 3-4 display quality/resolution 4 4 usability 4 3-4 42 - 1 Anna Rosinus Example: Benchmarking 1. Please list the key success factors (KSF) for the smartphone industry (column 1) 2. Please compare the performance of Apple and Samsung (columns 2&3) 3. visualise your results (use the right hand part of the table as grid lines) (e.g. use 0 as worst and 5 as best rating) group work further key success factors: price KSF Apple Samsung worst best handling, usability 3 4 size (as small as possible) and weight 4 3 material, quality, hardware features 5 3 software features, compatibility 3 4 design 4 4 42 - 2 Anna Rosinus Example: Benchmarking 1. Please list the key success factors (KSF) for the smartphone industry (column 1) 2. Please compare the performance of Apple and Samsung (columns 2&3) 3. visualise your results (use the right hand part of the table as grid lines) (e.g. use 0 as worst and 5 as best rating) group work further key success factors: marketing/advertising, price KSF Apple Samsung worst best easy to handle, usability, software 4 3 design 5 3 display (size, resolution) 3 3 camera quality 4 4 availability of Apps 5 3 42 - 3 Anna Rosinus Trends and Forecasting forecasting is based on a set of assumptions, BUT mistakes in the assumptions are the most frequent reason for forecasting errors techniques: extrapolation brainstorming expert opinion statistical modelling scenario writing how to learn about future developments? pathstoknowledge.net 43 Anna Rosinus v Strategic management Process (1) Environmental Scanning
External: Opportunities and Threats Natural Environment: Resources and climate Societal Environment: General forces Task Environment: Industry analysis Internal: Strengths and Weaknesses Structure Chain of command Culture, beliefs, expectations, values Resources: Assets, skills, competencies, knowledge Strategy Formulation Strategy Implementation Evaluation and Control 45 Anna Rosinus Internal Scanning & Organisational Analysis The Resource-Based Approach to Strategy Value Chain Analysis Scanning (Internal Resources) Functional Resources and Capabilities Corporate Culture as a Competitive Advantage
what to expect? 44 SWOT OPPORTUNITIES & THREATS (CH. 2) STRENGTHS (sustainable competitive advantages) & WEAKNESSES (competitive disadvantages) OVERVIEW CHAPTER 3 (1) RBV Resource Based View (2) Value Chain Analysis (Porter) RESOURCES, CAPABILITIES, COMPETENCIES DISTINCTIVENESS: VRIO framework (Barney) ACTIVITIES (functional units) + CORPORATE CULTURE activities to drop activities to improve/ strengthen R, C no longer necessary (rigidities) resources & capabilities to acquire/develop cost drivers, profit pools Anna Rosinus The Resource-Based Approach to Strategy (1) resources: an organisations assets what we have tangible intangible capabilities: a corporations ability to exploit its resources core and distinctive competencies what we do well competency: a cross-functional integration and coordination of capabilities core competency: a collection of competencies that is wide-spread throughout the corporation across divisional boundaries; something the corporation does exceedingly well distinctive competency: core competencies that are superior to those of the competition
what makes the difference? capabilities resources competencies Anna Rosinus The Resource-Based Approach to Strategy (1) resources: an organisations assets what we have tangible intangible capabilities: a corporations ability to exploit its resources core and distinctive competencies what we do well competency: a cross-functional integration and coordination of capabilities core competency: a collection of competencies that is wide-spread throughout the corporation across divisional boundaries; something the corporation does exceedingly well distinctive competency: core competencies that are superior to those of the competition
what makes the difference? capabilities resources competencies 46 - 2 Anna Rosinus The Resource-Based Approach to Strategy (2) threshold capabilities the qualifiers - are needed to achieve parity with competitors a given market, whereas distinctive capabilities the winners help to achieve competitive advantage, they are of value to customers and difficult to imitate for competitors dynamic capabilities help an organisation to renew and recreate its strategic capabilities according to changes in the environment redundant capabilities were effective in the past but become less relevant due to changes and developments in the industry might form rigidities that inhibit change and become a weakness
what makes the difference?
47 Anna Rosinus VRIO Framework (Barney) Value Rarity Inimitability Organisation => resources, capabilities and competencies meeting these criteria provide a basis for achieving sustainable competitive advantage
what makes resources, capabilities and competencies distinctive? Wheelen/Hunger (2012) adapted from Jay Barney (1991) 48 Anna Rosinus VRIO Framework - Implications how to achieve competitive advantage? Johnson et al. (2011) Anna Rosinus VRIO How to? list resources and capabilities estimation of customer value check existing competitors for their performance in these resources & capabilities check potential entrants/substitutes for their performance for your most valuable resources analyse cost of imitation tradability & availability can be secured? knowledge = shared with how many people is the capability linked? can the organisation make use of these resources and capabilities? (e.g. appropriate control systems, incentives?) how to investigate the distinctiveness of resources and capabilities? Anna Rosinus VRIO How to? list resources and capabilities estimation of customer value check existing competitors for their performance in these resources & capabilities check potential entrants/substitutes for their performance for your most valuable resources analyse cost of imitation tradability & availability can be secured? knowledge = shared with how many people is the capability linked? can the organisation make use of these resources and capabilities? (e.g. appropriate control systems, incentives?) how to investigate the distinctiveness of resources and capabilities? Anna Rosinus VRIO How to? resources local restaurants (number, location) recipes brand quality of ingredients employees franchisee network capabilities ability to offer global as well as local menus high-quantity, low-cost sourcing Marketing delivering uniform quality worldwide knowledge transfer
Please try to apply the VRIO framework to McDonalds: What are important resources and capabilities? (~3 of each) Are these capabilities valuable? Are they rare? How costly is their imitation? Is the company organised in order to make use of these capabilities? Anna Rosinus Sustainable Competitive Advantages Durability: how fast do a firms underlying resources, capabilities, or core competencies depreciate or become obsolete Imitability: how easily can a firms underlying resources, capabilities, or core competencies can be duplicated by others Transparency: How difficult is it to understand the relationship of resources and capabilities that support a successful strategy? Transferability: Can competitors gather those resources and capabilities? Replicability: If competitors duplicated the resources and capabilities will they be able to imitate the other firms success? Explicit knowledge (easy to articulate and communicate) Tacit knowledge (not easy to communicate, because the knowledge is deeply rooted in employee experience or in the companys culture)
what makes a competitive advantage sustainable? 49 - 1 Anna Rosinus Sustainable Competitive Advantages what makes a competitive advantage sustainable? 49 - 2
Anna Rosinus Access to Capabilities and Competencies internal capability development building and recombining leveraging capabilities stretching capabilities external capability development mergers and acquisitions forming alliances how to develop capabilities and competencies? ceasing (non-core) activities stopped, outsourced or reduced in cost monitor outputs and benefits better understand sources of consumer benefit awareness development
training, development and organisational learning 51 Anna Rosinus Value Chain Analysis how do different activities contribute to consumer benefit? source: adapted from Johnson et al. (2011) upstream downstream 52 Anna Rosinus Value Chain Analysis how do different activities contribute to consumer benefit? source: adapted from Johnson et al. (2011) Ford 1920s/30s Anna Rosinus Value Chain Analysis 1. draw each product lines value chain 2. examine the linkages within each product lines value chain 3. assign the costs 4. identify drivers for cost reduction OR for differentiation depending on your strategy (cost leadership or differentiation) 5. analyse competitive advantages for each activity 6. identify profit pools 7. make recommendations, e.g. concerning make or buy-decisions how to use value chain analysis? 53 Anna Rosinus Value Chain Analysis use the value chain analysis to develop... a cost leadership strategy for Abercrombie & Fitch OR a differentiation strategy for Volkswagen group work source: adapted from Johnson et al. (2011) 54 Anna Rosinus Scanning Functional Resources and Capabilities Marketing Finance R&D Operations HR IT what about the different functional units of a company? 55 Anna Rosinus Marketing? market position what do we want to achieve? market leader, market share, growth etc. market segmentation which customers do we want to serve? niche segments, luxury class etc. marketing mix how do we want to create demand and competitive advantage? 4P: product, price, place, promotion how can contribute to corporate and business strategy? Product Place Price Promotion 56 Anna Rosinus Marketing & Branding one of the worlds oldest brands has been created 10k years ago in India herbal paste chyawanprash what is a brand? what does branding mean? branding was formerly known as a way to tell one person's cattle from another by means of a hot iron stamp a brand is a name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. American Marketing Association Dictionary brands as a means of mass-marketing: industrialisation (19th century) centralisation of production first packaged goods trademarks as a visualisation of brands" Anna Rosinus Best Global Brands other strategic marketing subjects? source: www.interbrand.com 2 0 1 2
2009: 1. 2009: 20. 2009: 2. 2009: 7. 2009: 3. 2009: 4. 2009: 6. 2009: 9. 2009: 19. 2009: 8. 2009: 12. 2009: 15. 2009: 10. 2009: 14. 2009: 11. 2009: 13. 2009: 16. 2009: 24. 2009: 5 2009: 43. TOP WINNERS BIGGEST LOSER STABLE PERFORMERS Anna Rosinus Finance? provision and control of financial resources issuance of shares/management of shareholders bank loans optimisation of financial leverage (ratio of total debt to total assets) capital budgeting analysis of investment projects allocation of funds (capex and opex) how can contribute to corporate and business strategy? 57 Anna Rosinus R&D? R&D intensity amount of R&D expenses in relation to e.g. total costs or sales revenue development and use of innovative technology technology deployment/technology transfer bringing new ideas to market how can contribute to corporate and business strategy? 58 Anna Rosinus Example Technology Transfer: Augmented Reality practical application Anna Rosinus Operations? manufacturing type: how & where a product/service is manufactured: continuous systems such as assembly lines intermittent systems such as job shops economies of scale experience/learning curve how can contribute to corporate and business strategy? the law of experience the unit cost value added to a standard product declines by a constant % (typically 20- 30%) each time cumulative output doubles. 59 Anna Rosinus Example Operational excellence: Toyota process rather than product innovation due to lacking resources after world war II efficiency was key (material usage, waste & stock minimisation just in time input deliveries, instantaneous problem solving = jidoka) andon cord - line stops, kanban - material "calls", intelligent factory layouts continuous improvement - kaizen - involving everybody, incremental instead of big changes The Toyota Way - a set of principles and behaviors continuous improvement & respect for people => long-term success organisational learning developing people although Toyota doesn't protect this secret they still stand out
practical application Anna Rosinus HR? management/organisation of teams autonomous (self-managing) cross-functional management/use of temporary workers increasing flexibility reduced impacts of cyclicality internal differences in the workforce 2 groups quality of work life empowerment: participative problem solving rewards: not only monetary improvements in working environment and work-life balance training human diversity (different races, cultures and backgrounds) succession and knowledge management
how can contribute to corporate and business strategy? 60 Anna Rosinus IT? automation back-office processes help yourself solutions enhance key business functions better and faster information for management communication/information exchange (entire value net, i.e. with subsidiaries, suppliers & customers intranet, extranet, EDI) knowledge management (intranet, wiki) development of competitive advantages time, scope, and quality of processes
how can contribute to corporate and business strategy? 61 Anna Rosinus Corporate Culture the collection of beliefs, expectations and values learned and shared by a corporations members and transmitted from one generation of employees to another there are three ways to do any job: the wrong way, the right way and the company way(the way we do it around here) depth & breadth of culture what about a companys soft basis? 62 Anna Rosinus Corporate Culture: Functions identity stability of the organisation as a social system commitment frame of reference and guide for behaviour what about a companys soft basis? Anna Rosinus Corporate Culture: Functions identity stability of the organisation as a social system commitment frame of reference and guide for behaviour what about a companys soft basis? Anna Rosinus Corporate Culture: Functions identity stability of the organisation as a social system commitment frame of reference and guide for behaviour what about a companys soft basis? 2010 was a big year for Facebook and the revelation of the 2010 strategy infographic was no exception. Mark Zuckerberg unintentionally revealed the infographic that was printed on the inside of his hoodie at the D8 conference. The hoodie with the famous infographic was reportedly given to all Facebook employees in 2010.