MBAPRESENTATION CHEBOKSARY

Robin Matthews

FULL COPIES OF PRESENTATION AVAILABLE ON REQUESTrobindcmatthews@gmail.com

Please do not quote without acknowledgement

The meta modelOuter dynamics:; macro system co-opetition and competition Inner dynamics: the value chainPayoffs: stakeholders and competitive advantageGrammar: corporate culture

StrategyGeneric strategies: cost and differentiation

INTRODUCTION TO STRATEGY

THE META MODEL

META MODELOUTER DYNAMICS

Inner dynamics

payoffs

Outer dynamics

grammar

Payoffs to stakeholder groups

Global macro system

Rules, laws, regulations, structures, architectures, routines. Mindsets, culture, norms, values, habits, moods.

Intelligence rational and emotional.Formal and Informal, Inner and Outer.

Tangible and intangible Assets(includingReputation)

Competitors and co-operators

MARCS

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payoffs

Inner dynamics

Grammar: marcs

Outer dynamics

capabilities

META

MODEL

STRATEGIC ANALYSISOUTER DYNAMICS AND INNER DYNAMICS

IS THE move from E to E2 OR FROM E TO E3?

Current Business Environment

ECurrent

Capabilities

New Business Environment 1 E3

E2

Still have somecapabilities

New BusinessEnvironment 2

Need completelynew capabilities

META MODELOUTER DYNAMICS

COMPETITION

OUTER DYNAMICS COMPETITIVE DYNAMICS

META MODEL PAYOFFS

STAKEHOLDERS

• Shareholders• Creditors• Customers• Employees

• Community• Government• Ecology• Co-opetitors

COMPETITIVE ADVANTAGE

FAILURE

A B

RISK

RETURN

ab

Payoffs to shareholders

META MODELINNER DYNAMICS

THE VALUE CHAIN

Value chain (Porter)PRIMARY

• Outbound logistics• Operations

(manufacturing)• Inbound logistics• Marketing• Sales • Service

SUPPORT

• Infrastructure• Human resources• Purchasing• Technology

ASSETS• TANGIBL• (Capital)

• Physical• Financial• People• Working• Information• Knowledge

• INTANGIBLE(Capital)

• Reputation• Brands• Relationships• Trust• Learning • Creativity

Dynamic capability

• Sources of competitive advantage that it is difficult to copy

META MODEL GRAMMAR

McKinsey view of internal organizational grammar

COMPETITIVE STRATEGY

TO INCREASE VALUE OF THE FIRM

REDUCE COST INCREASE REVENUES DECREASE THE COST OF

CAPITAL

COST AND PRODUCTIVITY

Costsin the value chain

AVOIDABLE UNAVOIDABLE

F1

Sunk costsUnavoidable once incurred(True costs)

V

VariableAvoidable by cutting Down output(marginal costs)

F2

FixedAvoidable by going out of business

SEGMENTATIONAND PRICING

STRATEGY

DIFFERENT SEGMENTS/NICHESIN THE MARKET HAVE

DIFFERENT ELASTICITY

Effect on sales revenue of price reduction

Effect on sales revenue of a price increase

ElasticEp >1

Sales RevenueRISES

Sales Revenue FALLS

InelasticEp <1

Sales Revenue FALLS

Sales RevenueRISES

Revenues and differentiation

niches

Market segmentsMarket

segment

Whole market

SUMMARY

robinmatthewsembaoct2009

ACTIVITY CORRESPONDENCE IN THE STRATEGIC ENNEAGRAM

ORGANIZATIONAL GRAMMAR

Rules of the game Strategic decisions are subject to rules of the game or grammar:internal/externalformal/informalsocial/personal

MARCS =

Mind sets, Archetectures, Routines, Cultures, Structures

PROCESS Search Vision of alternative scenarios, and valuation of potential payoffs

1,4,2Search in (P),(Π)

Choice Choice (and commitment) of alternatives and Implementation

RISK

8,5,7Two mappings(Π)→(R)(P)→(R)

Adaptation Adaptation (monitoring and control) in response to miscalculations, gaps between actual and desired payoffsunexpected events and disappointed expectations

7,1; 2,8(Π)↔(R)(P)↔(R)

ANALYSIS Outer dynamicsInner dynamics

Strategic decisions as adaptation of inner dynamics (decisions about assets and activities both tangible and intangible) to outer dynamics. Strategic decisions are subject to organizational grammar.

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Grammar

Payoffs Payoffs are the outcomes of strategic analysis and process