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WHAT IS STRATEGY?

A plan designed to achieve a long term aim


The oxford dictionary

An Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage
- By Management Consultant

The chosen Strategy indicates what the organization will do as well as what the organization will not do.

WHAT IS COMPETITIVE ADVANTAGE?

An organization has a competitive advantage when it implements its strategy that competitors are unable to duplicate.

Organization Must understand no Competitive advantage is permanent. It will last permanent till the competitors are able to acquire the skills need to duplicate the strategy

WHAT IS AVERAGE RETURN?

Average returns are returns equal to those an investor expects to earn from other investments with a similar amount of risk

WHAT IS ABOVE AVERAGE RETURNS?

Above average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk

WHAT IS CORE COMPETENCY?

Core Competencies are capabilities that serve as a source of competitive advantage for an organization over its rivals

WHAT IS RISK?

A Risk is an investors uncertainty about the economic gains or losses that will result from an particular investment

WHAT IS STRATEGIC MANAGEMENT PROCESS?

It is the full set of commitment and actions required for an organization to achieve strategic competitiveness and earn above average returns

WHAT IS STRATEGIC COMPETITIVENESS?

It is achieved when an organization successfully formulates and implements a value creating strategy

WHAT IS STRATEGIC FLEXIBILITY?

It is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

WHAT ARE RESOURCES?

Resources are input in to a organizations production process, such a capital, equipment, the skills of individual employees, patents, finances and talented workforce

WHAT IS CAPABILITY?

A Capability is the capacity for a set of resources to perform a task or an activity in an integrated manner

WHAT IS GLOBAL ECONOMY?

A Global Economy is one in which the goods, services, people, skills and ideas move freely across geographic borders

WHAT IS GLOBALIZATION?

It is the increasing economic inter dependence among countries and their organizations as reflected in the flow of goods and services, final capital, and knowledge across country borders. Globalization is a product of a large number of organizations competing against one another in a increasing no of global economies

WHAT IS DISRUPTIVE TECHNOLOGY?

The technologies that destroyed the value of existing technologies and create new markets

WHAT IS VISION?

Vision is a picture of what the organization wants to be and in broad terms, what it wants to ultimately achieve

WHAT IS MISSION?

A mission specifies a business or businesses the organization intents to compete and the customers intents to serve

The External Environment The Internal Organization

Vision Mission

Strategy Formulation
BusinessLevel Strategy Merger and Acquisition Strategies Competitive Rivalry and Competitive Dynamics International Strategy CorporateLevel Strategy Cooperative Strategy

Strategy Implementation
Corporate Governance Organizational Structure and Controls Strategic Entrepreneurship

Strategic Leadership

Strategic Competitiveness Above-Average Returns

Many leaders today do not understand the ongoing, intimate connection between leadership and strategy. Specialists help managers analyze their industries and position their businesses for competitive advantage, and strategy has become largely a job for experts, or something confined to an annual planning process. What's been forgotten is that strategy is not a destination or a solution. It's not a problem to be solved and settled. It's a journey. It needs continuous, not intermittent, leadership. It needs a strategist.

No matter how carefully conceived, or how well implemented, any strategy put into place in a company today will eventually fail if leaders see it as a finished product.

The strategist is the one who must shepherd this ongoing process, who must watch, identify and decide and move, time and time again. The strategist is the one who may decline certain opportunities and pursue others. Consultants' expertise and considered judgments can be considered, but, in the end, it is the strategist who bears the responsibility for setting a firm's course and making the choices day after day that continuously refine that course.

That is why strategy and leadership must be reunited at the highest level of an organization. All leaders shall own strategy as the heart of their responsibilities.

Demographic Segment

Population size Age structure Geographic distribution Inflation rates Interest rates Trade deficits or surpluses Budget deficits or surpluses Antitrust laws Taxation laws Deregulation philosophies

Ethnic mix Income distribution

Economic Segment

Personal savings rate Business savings rates Gross domestic product

Political/Legal Segment

Labor training laws Educational philosophies and policies

Sociocultural Segment

Women in the workforce Workforce diversity Attitudes about the quality of work life

Shifts in work and career preferences Shifts in preferences regarding product and service characteristics

Technological Segment

Product innovations Applications of knowledge

Focus of private and government-supported R&D expenditures New communication Technologies Newly industrialized countries Different cultural and institutional attributes Availability of water as a resource Producing environmentally friendly products

Global Segment

Important political events Critical global markets

Physical Environment Segment

Energy consumption Practices used to develop energy sources Renewable energy efforts Minimizing a firms environmental footprint

The External Environment


Economic

Demographic Industry Environment Treat of New Entrants power of suppliers Power of Buyers Product Substitutes Intense of Rivalry Competitor Environment

Physical

Political/Legal

Sociocultural

Technological

Global

Making the Distinctions


Unattractive High: Many homogeneous competitors and homogenous products. Innovations quickly copied. Slow growth. Excess capacity. Price competition High: Industry is dependent on a few, concentrated suppliers producing unique products, and Industry is not important source of profitability to suppliers High: Customers have lots of choices among similar products. Low levels of brand awareness. Low switching costs, Low levels of emotional involvement with purchase. to attractive Low: One or a few dominant. Unique products. Strong brand identities. Rapid industry growth, Shortage of capacity Low: Many suppliers producing homogeneous products. Price competition and plentiful supply make it easy to procure supplies at reasonable cost. Low: Products are scarce, highly differentiated, and important to customers well being. Customers have limited choice. Brands are strong

Rivalry among firms

Power of Suppliers

Power of Customers

Making the Distinctions


Unattractive Low: Industry is easy to enter and sometimes difficult to exit, creating excess capacity. Strategies of existing competitors can be easily replicated or surpassed. Entry requires low levels of capital, modest scale, and no scare or specialized resources High: Wide variety of compelling substitute products are available that meet customers needs at attractive relative prices Barriers to entry and exit to attractive High: it is difficult or not economical for new firms to enter your industry. Entry required economies of scale, product differentiation, high capital investment, regulatory approval, or accumulation of special expertise or experience. Low: Customers have few or no choices of alternative products that could meet their needs at comparable prices

Ability of Substantive products