Corporate Strategy & Effectiveness

Muhammad Asim

Corporate Strategy & Effectiveness

Strategy Formulation Business Strategy

Muhammad Asim

Jack Welch on Strategy

Chairman & CEO of GE 1981 - 2001

Muhammad Asim

Jack Welch on Strategy

Introduction In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. In 2000, the year before he left, the revenues increased to nearly $130 billion. When Jack Welch left GE, the company had gone from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world. In 1999 he was named "Manager of the Century" by Fortune magazine

Muhammad Asim

Jack Welch on Strategy

The Vision

To be # 1 or # 2 in any market we operate!

Where we are not number one or number two, and dont have or cant see a route to a technological edge, we have got to ask ourselves very tough question: If you werent already in the business, would you enter it today? And if the answer is no, face into that second difficult question: What are you going to do about it? When youre number four or five in a market, when number one sneezes, you get pneumonia. When youre number one, you control your destiny. If you are not Number 1 or 2, aspire to be and work to get there else, close down the operations
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Jack Welch on Strategy

Strategy "It's not that I don't understand their [the experts] theories about competitive advantage, core competencies, virtual commerce, supply chain economics, disruptive innovation, and so on, it's just that the way these experts tend to talk about strategy -- as if it is some kind of high-brain scientific methodology -- feels really off to me.

"In real life, strategy is actually very straightforward. You pick a general direction (Welch calls this the "big aha") and implement like hell."

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Jack Welch on Strategy

3+5 The Three Steps: 1. First, come up with a "big aha" for your business -- a smart, realistic, relatively fast way to gain sustainable competitive advantage. 2. Second, put the right people in the right jobs to drive the "big aha" forward. 3. Third, relentlessly seek out the best practices to achieve your "big aha", whether inside or out, adapt them, and continually improve them.

Muhammad Asim

Jack Welch on Strategy

3+5 The next 5 Steps: 1. What the Play Field Looks Like Now. (scoping out the competition)

2. What the Competition Has Been Up To (where is the competition going? are there new entrants?)
3. What You've Been Up To (scoping out yourself)

4. What's Around the Corner (where are the threats?)

5. What's Your Winning Move?

Muhammad Asim

Jack Welch on Strategy

What the play field looks like now?

Who are the competitors in this business, large and small, new and old?
Who has what share, globally and in each market? Where do we fit in? What are the characteristics of this business? Is it commodity or high value, or somewhere in between? Is it long cycle or short? Where is it on the growth curve? What are the drivers of profitability? What are the strengths and weaknesses of each competitor? How good are their products? How much does each one spend on R&D? How big is each sales force? How performance-driven is each culture? Who are this businesss main customers and how do they buy?

Muhammad Asim

Jack Welch on Strategy

What the competition has been up to?

What has each competitor done in the past year to change the playing field?
Has anyone introduced game-changing new products, new technologies, or a new distribution channel?

Are there any new entrants, and what have they been up to in the past year?

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Jack Welch on Strategy

What youve been up to?

What have you done in the past year to change the competitive playing field?
Have you bought a company, introduced a new product, stolen a competitors key salesperson, or licensed a new technology from a start-up? Have you lost any competitive advantages that you once had a great salesperson, a special product, a proprietary technology?

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Jack Welch on Strategy

Whats around the corner?

What scares you most in the year ahead -- what one or two things could a competitor do to nail you?
What new products or technologies could your competitors launch that might change the game? What M&A deals would knock you off your feet?

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Jack Welch on Strategy

Whats your winning move?

What can you do to change the playing field is it an acquisition, a new product, globalization?
What can you do to make customers stick to you more than ever before and more than anyone else?

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Thank you

Muhammad Asim