Professional Documents
Culture Documents
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“Hows” of strategy
How to please customers Strategic Management
How to respond to changing market
conditions
How to outcompete rivals vs Tactical Management
How to grow the business
How to manage each functional piece of vs Operations Management
the business and develop needed
organizational capabilities
How to achieve strategic and financial
objectives
How to balance short term and long term
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Three questions to improve focus Objectives
Financial objectives
Which consumer or customer groups • Specific measures of financial
are being satisfied? performance
External Analysis
1. Macro environment?
2. Dominant economic traits?
External Analysis 3. Competitive forces?
4. Factors driving change?
5. Strongest & weakest positions?
6. Next strategic moves?
7. Key success factors?
8. Attractiveness & profitability?
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Dominant Economic Traits (cont.) Porter’s Five Competitive Forces
Pace of technological change 1. Risk of entry by potential
Level of differentiation of the rival competitors
products or services
Presence of economies of scale
2. Rivalry among established farms
Capacity utilization levels 3. Bargaining power of buyers
Impact of learning and experience 4. Bargaining power of suppliers
Capital requirements 5. Substitute products
Industry profitability
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Key Success Factors KSFs can be grouped in several ways:
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Five questions for Internal Analysis Is the present strategy working?
How well is the present strategy
working? Is the farm achieving it’s financial
and strategic objectives?
What are the Strengths, Weaknesses,
Opportunities, and Threats? (SWOT) Is it progressing towards it’s vision?
Are costs competitive? What is the current financial
condition and performance?
How strong is the competitive
position? How well have profit objectives been
balanced with other financial and
What strategic issues need to be
strategic objectives?
addressed?
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Signs of Competitive Strengths Signs of Competitive Weaknesses
important core competencies
distinctive strategies competitive disadvantages
cost advantages losing ground compared to other farms
good match of the farm’s strategic product groups below average growth
with the industry’s growth areas short on financial resources
above average profit margins poor strategic product groups compared to
taking advantage of cost economies industry growth
above average technological and innovational weak where best growth potential is
capability high cost producer
creative, entrepreneurially alert management not able to take advantage of cost economies
capitalizing on opportunities poor quality of and/or missing skills in key areas
possessing skills in key areas
Generic strategies
Low cost leadership
Growth
Prospector
Crafting Strategy Protector
Reactor
Differentiation
Focus or niche
Best-cost provider
Retrenchment
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Patterns of Actions Patterns, cont.
that Define Strategy
1. Actions to out compete rivals 7. Actions to form alliances & partnerships
2. Responses to external changes 8. Efforts to pursue opportunities or defend
3. Broadening or narrowing product line, against threats
changing quality, & modifying service 9. Actions and approaches that define how
4. Actions to alter geographic coverage functional activities are managed
5. Actions to merge with or acquire rivals 10. Actions to strengthen resources and
6. Efforts to integrate backward or forward capabilities
or to outsource current internal activities 11. Actions to diversify
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Improving Strategic Planning Using Scenarios
1. Planning under uncertainty 1. Bet on most probable scenario
2. Ivory tower planning 2. Bet on the “best” scenario &
3. Planning for the present strategy
4. Managers’ biases 3. Hedge on what will happen
5. Devil’s advocacy 4. Preserve flexibility
6. Dialectic inquiry 5. Influence the outcome
7. Advisory board 6. Combine methods
Robustness
First mover advantage
Initial competitive position Strategy Implementation
Cost or resources required
Risk
Competitor's expected choices
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Implementation involves
developing:
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