You are on page 1of 37

Strategic Management

Strategic Analysis

Strategic Development

Strategy Implementation
Evaluating the
Internal Environment
MBA Toolbox
Internal Analysis

Resource Audit
Value Chain
McKinsey 7S Framework
Value System
VRIO Framework (Valuable, Rare, Imitable, Organisation exp.)
Core Competencies
Distinctive Capabilities
Portfolio Evaluation
Generic Strategies
Leadership and Culture
Financial Analysis
Strategic Options / Business Expansion Matrix
Strengths and Weaknesses (SWOT)

And other frameworks relevant to organization
Resource Audit

Compare with key rivals
Value Added Operations



Organisation's resources


Value Added

The difference between the market value
of an output and the cost of its inputs.

NFP: Difference between service provided
and the cost of the inputs.
• Increase value of outputs
• Decrease value of inputs
• Hybrids
Value Chain
(Porter, 1985)

Primary Activities
Inbound Logistics
include the receiving, warehousing, and inventory control of input materials.

are the value-creating activities that transform the inputs into the final product.

Outbound Logistics
are the activities required to get the finished product to the customer, including
warehousing, order fulfillment, etc.

Marketing & Sales
are those activities associated with getting buyers to purchase the product,
including channel selection, advertising, pricing, etc.

activities are those that maintain and enhance the product's value including
customer support, repair services, etc.
Value Chain
(Porter, 1985)

Secondary Activities
the function of purchasing the raw materials and other inputs used in the value-
creating activities.

Technology Development
includes research and development, process automation, and other technology
development used to support the value-chain activities.

Human Resource Management
the activities associated with recruiting, development, and compensation of

Firm Infrastructure
includes activities such as finance, legal, quality management, etc.
Value Chain
(Porter, 1985)

Generic Strategies

Cost Leadership

Value Chain
Linkages, IT and Cost Matrix
Anthony's Triangle (1965)
Laudon, K. and Laudon, J., (2002) Management Information Systems:
Managing the Digital Firm. New Jersey: Prentice Hall. 7th Edition.
Human Resources

 Recruitment and Selection
 Performance Management
 Training and Development
 Rewards and Motivation
Human Resources

Human Resource Cycle, Fombrun et al. (1984)
Human Resources

Selection Process adapted from: Briscoe (1995)
Human Resources

Performance Cycle – Torrington, Hall and Taylor (2002)
Human Resources

The Balanced Score Card Concept – Adapted from Kaplan and Norton (1996)
Human Resources

Types of Reward – Rajan (1997)
Human Resources
Content: “What” energizes, directs behaviour
Maslow’s Hierarchy of Needs Theory: Physiological (need for air, water, food housing,
clothing), Safety (security, stability, freedom from harm), Social(love, affection, approval,
friends, association), Esteem(accomplishment, respect, attention, appreciation), Self-
Actualization (self fulfillment, growth, learning)
Hertzberg’s Motivator/Hygiene Theories: (Motivator: Responsibility, Self-Actualization,
Professional Growth, Recognition; Hygiene: Conditions, Salary, Relationship at Work,
Safety, status)

Process: “How” personal factors influence behaviour
McGregor’s Theory X and Theory Y (X: Assumes people lack ambition, dislike
responsibility, are inherently self-centered; motivate by reward and punishment. Y:
Assumes people will accept responsibility, can become self-motivated and exercise self-
control; motivate by removing obstacles and providing self-directed environment.)
Ouchi’s Theory Z/Japanese Theory (focus on team, company; usually lifetime
employment, collective decision making )
Vroom's Expectancy Theory – Motivation is explained in terms of expectations that
people have about (1) their ability to perform effectively on the job, (2) the rewards they
might obtain if they do perform effectively and (3) the value or degree of satisfaction they
anticipate from those rewards.

• Customer Service Objectives
• Resource Utilization Objectives
• Objectives Conflicts
• Operating System Structure – Process Map
• Key Limiting Resource Analysis
• Capacity Management
• Activity Scheduling
• Inventory Management
• Quality Management
Quality Processes
Quality Planning

• Identifying which quality standards are relevant to the
project/operations and determining how to satisfy them.

• Joseph Juran – Quality - Fitness of Use
• Edward Deming – Quality Improvement – Plan, Do, Check and Act
• Philip Crosby – Quality – Conformance to requirements
• Grade and quality

Wild, R., (2002) Operations Management. Sixth Edition. Continuum.
Quality Processes
Quality Assurance
• Applying planned systematic quality activities to ensure
that the project employs all processes needed to meet
requirements (Kaizen)
• TQM – Total Quality Management Philosophy
encourages companies and their employees to focus on
finding ways to continuously improve quality of their
business practices and products.
• Pareto's Rule 20/80
• Process analysis, quality audits, knowledge base
• Recommended changes
• Recommended corrective action
Quality Processes

Quality Control

Monitoring specific results to determine whether they
comply with relevant quality standards (e.g. variances from
BSC objectives) and identifying ways to eliminate causes
of unsatisfactory performance.
Customer Development Process
Competitive Role and Strategies
Internal Marketing
Product Life Cycle
Service Encounter
Service Quality Gaps
Physical Evidence
Value System
(Porter, 1985)

The firm's value chain links to the value chains of
upstream suppliers and downstream buyers. The
result is a larger stream of activities known as the
value system.

The development of a competitive advantage depends
not only on the firm-specific value chain, but also on
the value system of which the firm is a part.
Value System
(Porter, 1985)
McKinsey 7S Framework

Alignment / Interrelatedness / Support
of Soft/Hard Elements

Gap Analysis
McKinsey 7S Framework

(n2- n)/2
(49 – 7)/2
(42)/2 = 21
McKinsey 7S Framework

• The Family / Support Culture
-based on relationships and intimacy

• The Eiffel Tower / Role Culture
- based on structure and hierarchy

• The Guided Missile / Achievement Culture
- based on performance and competence

• The Incubator
-fulfilment of the individual

Source: F. Trompenaar, Riding the Waves of Culture (1993)

Networked Communal
based in the heart)

Fragmented Mercenary

Low High
Solidarity (Tasks and goals – based in the head)

Source: Goffee and Jones
Leadership Styles

Leadership Styles adapted from Tannenbaum & Schmidt (1973)
Organisational Structure

What is the current structure of the target organisation?

Weak matrix
Balanced matrix
Strong matrix
Outsourced, hybrids etc.
McKinsey 7S Framework

Alignment / Interrelatedness / Support
of Soft/Hard Elements

Gap Analysis
McKinsey 7S Framework