Novo Marmo strategic thinking

8/6/2019 Novo Marmo strategic thinking

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STRATEGICTHINKING

Prepeard By : Faleh Zahrawi

Novo Marmo



STRATEGIC ISSUES

A Strategic Issue is any issue that

significantly influences a person’s, a work group’s or an organization’s ability to develop and maintain a competitiveadvantage.



STRATEGIC DOMAINS

• Organizational

• Work Group or Function

• Individual



COMPETITIVE

ADVANTAGE A competitive advantage has

three key characteristics:

1. it provides superior value to customers

2. it is hard to imitate

3. it enhances one’s ability to respond to

changes in the environment.



SOURCES OF

COMPETITIVE ADVANTAGE• Government subsidy or support

• Established or monopolistic markets

• Product innovation• Process innovation, Cost efficiencies

• Superior Service

• Human Resource Management



Every CEO has to spend

an enormous amountof time shuffling papers.The question is, how much of your time can you leave free to think about ideas? To me the pursuit of ideas isthe only thing that matters. You canalways find capable people to do almost

everything else.”

.



Strategy is the art of creating value. It provides the intellectual

frameworks, conceptual models,and governing ideas that allow

a company’s managers to identify opportunitiesfor bringing value to customers and fordelivering that value at a profit. In this respect,strategy is the way a company defines its business and links together the only resourcesthat really matter in today’s economy:knowledge and relationships or anorganization’s competencies and customers.

Normann, R. and Ramirez, R., “From Value Chain to Value Constellation:

Designing Interactive Strategy,” Harvard Business Review, July-August 1993, p.65.



STRATEGIC FITMODEL

Strategic MindsetsSTRATEGIC INTENT

MODEL

Source, Hamel and Prahalad, Strategic Intent , HBR

Strategic thinking is driven by the match betweencurrent capabilities andexisting opportunities

Searching for sustainableadvantages

Finding protected niches

Strategic thinking is driven by bridging gap between today’sreality and tomorrow’s vision

Finding ways to leverageresources

Outpacing competitors in building new advantages

Making new industry rules



WHAT MIGHT WE DO?

(external opportunitiesand threats)

WHAT CAN WE DO?

(strengths and weaknesses)

WHAT DO WEWANT TO DO?(organizational andindividual values)

WHAT DO OTHERS EXPECT US TO DO?

(stakeholderexpectancies)

Four Questions that Guide Strategic Choices

STRATEGY



WHAT MIGHT WE DO?

(external opportunitiesand threat)

WHAT CAN WE DO?

(strengths andweaknesses)

WHAT DO WE

WANT TO DO?(organizational andindividual values)

WHAT DO OTHERS EXPECT US TO DO?

(stakeholder expectancies)

r Related Questions that Guide Strategic Cho

STRATEGY

What do we

need tolearn to care

about?

What new

capabilities do we

want to develop?

How do we

create new

possibilities ?

How do we partner

to build shared expectancies ?



Porter’s FiveForces Model

NEW ENTRANTS

BUYERS

SUBSTITUTES

INDUSTRY COMPETITORS

SUPPLIERS



Inbound

Logistics

Oper-

ations

Out-

boundLogistics

Market-

ing &Sales

Service

Porter’s Generic Value

Chain

Adapted from Michael Porter, Competitive Advantage, Free Press, New York, 1985, p. 46

FIRM INFRASTRUCTURE

TECHNOLOGY DEVELOPMENT

HUMAN RESOURCE MANAGEMENT

PROCUREMENT

M

A R G I N

M A R G I N



Raw Materials

Transport

Processing

GENERAL VALUE CHAIN

Forming

Assembly

DistributionSalesService

What’s your value chain? What are the margins in each link? Where are your competitive strengths? Where is your strategic intent?



Creating Core

Capabilities• The building blocks of corporate strategy

• are not products and markets but business processes.

• Competitive success depends upon transforming acompany’s key processes into strategic capabilitiesthat consistently provide superior value tocustomers

• Companies create these capabilities by making strategic

investments in a support infrastructure that linkstogether and transcends traditional functions.

• Capability-based strategies, because they cross functions,must be championed by senior leadership.Stalk, Evans, and Shulmand (1992)



Defining GrowthTrajectories

N E E

D S

CUSTOMERS

Existing New

E x

i s t

in g

N e

w

Charan and Tichy

A B

CD



Defining GrowthTrajectories

N E E

D S

CUSTOMERS

Existing New

E x

i s t

i n g

N e

w

Charan and Tichy

A B

CD

Push Past

R e s p o n

s e

Q u a n t

u m L e a p

$XBGlobal

Your

Share



Organization Charters

• Mission Statement

• Vision Statement

• Values Statement• Strategy

• Operating Goals

• Leadership



ORGANIZATION

CHARTERS

Mission Vision

Values

Goals

LEADERSHIP

1. Mission Statement2. Vision Statement

3. Values Statement

4. Strategy 5. Operating Goals and Milestones

6. Leadership

Strategy



PROBLEM LEADERSHIP

LEADERSHIP ACTIVITY Questions Answers

Problem Solving Old New

Problem Finding New Old

Problem Creating New New

Adapted from Pathfinding by Harold Leavitt, 1995



• Technological innovation

• Fast customer response

• Leading edge synergies• Investing in core capabilities

• BUT reinventing the future?



Indirect Influence

on Outcomes

CultureEnviron-ment

Leader-ship

DesignDecisions

Results



Competitive AdvantageThrough People

• Employment Security

• Selectivity in Recruiting

• High Wages

• Incentive Pay • Employee Ownership

• Information Sharing

• Participation andEmpowerment

Jeffrey Pfeffer, Producing sustainable competitive advantage through the effective management of people, Competitive Advantage through People, HBS Press, 1994, (AME, 1995, V. 9. N. 1

Self-Managed Teams

Training and Skill Development

Cross Utilization and TrainingSymbolic Egalitarianism

Wage Compression

Promotion from Within



Strategy as Revolution

• Planning isn’t strategic.• Strategy making must be subversive.

• The Bottleneck is at the top of the bottle.

• Revolutionaries exist in every company.

• Strategy making must be democratic.• Change is not the problem, engagement is.

• Anyone can be a strategy activist.

• Perspective is worth 50 IQ points.

• Top down and Bottom up are not alternatives.• You can’t see the end from the beginning.



Revolutionizing Strategy

• Radically improving the value equation

• Separating form and function

• Achieving Joy of Use

• Pushing the bounds of universality • Striving for individuality

• Increasing accessibility

• Re-scaling Industries

• Compressing the Supply Chain

• Driving Convergence

Strategy as Revolution, Gary Hamel, HBR July-August, 1996, 96405, p. 69



Strategy is revolution;

everything else is tactics.

In industry after industry the

terrain is changing so fast that experience is irrelevant and even

dangerous.The objective is not to get people to support change

but to give them responsibility for engenderingchange, some control over their destiny.

Hamel



Who Should Be

Involved in DemocraticStrategy Making?• People geographically on the periphery

• Newcomers• Young people



Change the Rules

The future is not the

result of choices among alternative pathsoffered in the present -- it is a place thatis created -- created first in the mind and

will; created next in the activity.



CONCLUSION

• What’s your charter?

• What competitive advantage will achieve your

charter?• Are you internally consistent?

• Nurture your revolutionaries.

• Create problems that build the future.



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