Strategic Analysis and Action (5 th edition) © 2002 Pearson Education Canada Strategic Analysis and...
-
Upload
della-gilbert -
Category
Documents
-
view
214 -
download
1
Transcript of Strategic Analysis and Action (5 th edition) © 2002 Pearson Education Canada Strategic Analysis and...
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Strategic Analysis and Action (5th edition)
Figures
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
GeneralManager
Setting Directionvision
missionvalues
ImplementingChange
making it happen
Creating Strategydetermining the way
forward
AssessingPerformance
today and tomorrow
The Job of the General Manager
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Quadrant 1Quadrant 2
Quadrant 3Quadrant 4
complacentorganization
desired state
crisistroubled
organization
Operating Performance
Org
aniz
atio
nal H
ealth
+
+
–
–
three years ago tomorrow?
today
The Performance Matrix
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Environment
Purpose
Core Beliefs & Values
Mission
Vivid Description
Organizational Vision
Tangible ImageGuiding Philosophy
Collins and Porras Vision Framework
Source: Copyright ©1991, by The Regents of the University of California. Reprinted from the California Management Review, Vol. 34, No. 1. By permission of The Regents.
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Product MarketFocus
Goals
CoreActivities
ValueProposition
Business Strategy Components
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Strategic Choice: Product/Market Scope
Source: Ansoff, I., The New Corporate Strategy. Copyright © 1987, John Wiley & Sons, Inc. Reprinted by permission of John Wiley & Sons, Inc.
DiversificationMarket developmentNEW
Product developmentMarket penetrationEXISTING
MARKET
NEWEXISTING
PRODUCT
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Product MarketFocus
Goals
CoreActivities
ValueProposition
• Everyday low prices• Always in stock• Courteous, reliable
• Branded general merchandise• Value-oriented customers• Develop easier markets first: work
from regional hubs
• Integrated logistics: supplier to checkout
• Intensely managed• Local tailoring
• Dominate markets• Lowest cost system• High growth• Do it Wal-Mart way
The Wal-Mart Business Strategy
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Product MarketFocus
Goals
CoreActivities
ValueProposition
• Differentiation on product and service through a user-friendly graphic interface and integrated products
• Complete desktop solution• 50% US; 50% foreign• Education (50%MS); home• Hardware, software, peripherals• High end
• “Change the world through technology”
R&D Mnf’g Dist’n
• Fully integrated
Apple’s Strategy
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Functional/ Functional/ Functional/Product Product Product
Industry A
BusinessStrategy
A
Functional/Product
Functional/ProductProductProductProduct
Functional/Functional/ Functional/
Strategy
BusinessStrategy
B
Functional/
CorporateStrategy
StrategyStrategy
Industry B
ProductStrategy Strategy
Industry C
BusinessStrategy
C
StrategyStrategy Strategy Strategy
Corporate, Business and Functional Strategy
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Management Preferences
Organization
Resources
Strategy Environment
The Diamond-E Framework
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Strategic Risks
Source: Ansoff, I., The New Corporate Strategy. Copyright © 1987, John Wiley & Sons, Inc. Reprinted by permission of John Wiley & Sons, Inc.
Internal capabilities develop inconsistently with strategy
Strategic demands exceed the capacity to execute
CAPABILITY RISKS
Environmental changes make the strategy obsolete
Errors in reading the environment cause strategic
failureENVIRONMENTAL RISKS
LONG-TERMSHORT-TERM
TIME HORIZON
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
WANTManagement Preferences
Individual
NEEDEnvironmentIndustry
CANResource Capabilities
and OrganizationFirm
StrategicTension
The Strategic Analysis Triangle
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
The Process of Strategic Analysis
Activities
Step 1: Base Case Analysis Assess the strategic position of the business and the urgency for action.
1. Assess past performance. 2. Identify and evaluate current strategy using the Diamond-E
drill. 3. Forecast future performance under current strategy. 4. Decide on the need, nature, and urgency of change.
Step 2: Strategy Formulation and Testing Develop and evaluate proposals to address business opportunities and challenges.
1. Work from the environment and capabilities to generate new proposals.
2. Use the Diamond-E drill to shape and short-list proposals. 3. Prepare performance forecasts for short-listed proposals.
Step B: Decision and Implementation Commit, implement, and review.
1. Decide on proposal(s) to implement. 2. Move to build commitment and develop required
capabilities. 3. Implement.
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
INDUSTRY COMPETITORS
Rivalry AmongExisting Firms
POTENTIAL ENTRANTS
SUPPLIERS BUYERS
SUBSTITUTES
Threat of new entrants
Bargaining power of buyers
Threat of substitute products or services
Bargaining power of suppliers
Porter’s Five Forces Model
Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from COMPETITIVE STRATEGY: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980, 1998 by The Free Press.
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Prisoner’s Dilemma Matrix
I: $2,000II: $2,000
I: $0II: $10,000
Strategy B
I: $10,000II: $0
I: $6,000II: $6,000Strategy A
Strategy BStrategy A
FIRM TWO
FIRM TWO
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Macro Forces
Micro Forces
Political Social TechnologicalEconomic
Supply DemandCompetition
PEST Forces
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Need for Local ResponsivenessLow High
HighN
eed
for G
loba
l Int
egra
tion
Global• Economies of scale• Customers accept standardized products
Multidomestic• Locally tailored products
• Benefits of being local outweigh added costs
Internalization: Global/Local
Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster,Inc., from THE MULTINATIONAL MISSION by C.K. Prahalad and Yves L. Doz. Copyright © 1987 by The Free Press.
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Internalization: Global/Local
Step 1: Focus the Environment Analysis Work from the strategic proposal to define the boundaries of the relevant environment, highlight the questions that need to be asked about demand, supply, competition, and government. Establish a time horizon for analysis.
Step 2: Test the Strategy-Environment Linkage How well does the strategic proposal anticipate the opportunities and challenges in demand, supply, competition, and government? For serious misfits, recycle to develop a more attractive proposal.
Recycle
Step 3: Forecast Performance Decide if the strategic proposal, implemented as planned, will meet its goals. For clearly failing proposals, recycle to develop a more attractive proposal.
Recycle
Step 4: Rank Against Other Proposals Consider the strategic proposal in the light of alternative proposals. If it is competitive, proceed with the Diamond-E drill. If not, consider dropping it and recycle to develop a more attractive proposal.
Recycle
Step 5: Move to Next Step in Diamond-E Drill Assess the strategy-resource linkage.
GENERATE NEW
STRATEGIC PROPOSAL(S)
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
How well does the strategy
anticipate...
Government
Competition
DemandSupply
E.G.,• Customer needs and
performance• Market growth• Buyer bargaining power
E.G.,• Aggregate competitive
conditions• Individual competitor
strategies
E.G.,• Advances in product,
process technology• Supplier competence and
bargaining power• Competition for raw materials
and people
E.G.,• Industry support programs• Economic and trade policy• Regulation of structure and
conduct
Testing the Strategy-Environment LinkageBusiness Environment Analysis Model (BEAM)
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Resource Analysis
Step 1: Identify Resource Requirements Work from the strategic proposal to clarify and project the resources required for implementation and ongoing success. Prepare at a level of detail that will facilitate analysis and management action.
Step 2: Test the Strategy-Resource Linkage Compare the resource requirements with the counterpart resources in the business or readily available to it. Identify current and anticipated gaps between the two. For serious misfits, recycle to develop a more attractive proposal.
Recycle
Step 3: Develop Gap-Closing Analysis Assess the feasibility of closing any material gaps. If the costs, chances of success, and consequences of failure are acceptable, carry the proposal forward. If not, recycle to develop a more attractive proposal.
Recycle
Step 4: Move to Next Step in Diamond-E Drill Assess the strategy-management preference linkage.
GENERATE NEW
STRATEGIC PROPOSAL(S)
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Management Preferences
Strategic Choices
Organization, Resources & Capabilities
Environment
Indirect RoleA management preferencesfilter through which theenvironment and resourcesare assessed.
DirectRole
The Indirect Role of Management Preferences
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Management Preference Analysis
Step 1: Identify the Required Management Preferences Work from the strategic proposal to develop a list of required management preferences implied by each of the four elements of strategy.
Step 2: Test the Strategy-Preferences Linkage Compare the required preferences with the observed preferences of influential managers and management groups. Identify current and anticipated gaps between the two. For serious misfits, recycle to develop a more attractive proposal.
Step 3: Develop Gap-Closing Analysis Assess the feasibility of closing any material gaps. If the costs, chances of success, and consequences of failure are acceptable, carry the proposal forward. If not, recycle to develop a more attractive proposal.
Step 4: Move to Next Step in Diamond-E Drill Assess the strategy-management preference linkage.
GENERATE NEW
STRATEGIC PROPOSAL(S)
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Strategy-Organization Analysis
Step 1: Identify Required Organizational Capabilities Identify the key organizational capabilities that will be required to successfully implement the strategic proposal.
Step 2: Identify Capability Gap Compare the required organizational capabilities with those currently in the business. Identify the most important capability gaps. If the gaps are clearly too large to close, reject the proposal and recycle to develop a more attractive one.
Recycle
Step 3: Identify Required Organizational Changes Identify the changes in organization structure, management processes, and leadership behaviour that would be needed to develop the missing capabilities identified in Step 2.
Recycle
Step 4: Assess Feasibility Assess the probability that the proposed organizational changes will in fact result in the creation of the required new capabilities, in the time available. Identify the major areas of risk.
Recycle
Step 5: Move to Next Step in Diamond-E Drill Decide which of the strategic proposals you have been examining to adopt, based on an analysis of risk and expected performance.
RETURN TO FIRST STEPS
OF DIAMOND-E DRILL
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
OrganizationalCapabilities
Behaviour
Behaviour
Behaviour
Culture
Culture
Culture
Leverage PointLeadershipBehaviour
Leverage PointOrganization
Structure
Leverage PointManagement
Processes
Organizational Capabilities Model
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Basic Organization Structure (Partial)
etc. etc. etc. etc.
etc. etc.
two boss etc.managers
Production
Manager
Functional Organization
Marketing
CEO
Product Organization
Books
Magazines
Newspapers
Human
Editorial
General
Editorial
Asia
Books
Resources
Geographic Organization
Production Marketing
Finance
Magazines
Newspapers
CEO
NorthAmerica
Europe
Books
Magazines
Newspapers
Resources
Matrix Organization
FinanceHuman
Books Magazines Newspapers
CEO
EuropeNorth
AsiaAmerica
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
UnrealizedStrategy
RealizedStrategy
IntendedStrategy
EmergentStrategy
Intended and Emergent Strategy
Source: Mintzberg, H.; Ahlstrand, B.; Lampel, J.;Strategy Safari, New York: The Free Press, 1998.
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Creating a Change Plan
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Change Agenda
What change needs have you identified in your Diamond-E analysis?
Analysis of Starting Conditions
Urgency Organizational Readiness Personal Readiness
Are you dealing with anticipatory, reactive, or
crisis change?
Who will be most affected by the proposed change?
How ready are they?
How ready are you to lead the change
process?
Establishing Guidelines for Action
Priority Objective Priority Targets and Actions Leadership Style Pace
What do you need to accomplish
first?
Who are your priorty targets? What will your first steps be?
How are you going to manage the
change process?
How fast do you need to
move?
Creating an Action Plan Period 1, etc. Objectives Targets First Steps Style Timing 1. …………. ……….. ……………. …………….. …………….. 2. …………. ……….. ……………. …………….. ……………..
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Time
Good
Poor
StrategicPerformance
Anticipatory Change
ReactiveChange
CrisisChange
Urgency for Action: The Crisis Curve
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
Time
Good
Poor
StrategicPerformance
Anticipatory Change
ReactiveChange
CrisisChange
Readiness for Change
StrategicCapability
Readiness for Change and Strategic Capability
Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
ProactiveResistors
DefensiveResistors
ChangeAgents
ChangeAgents in Waiting
Bystanders
ActivelyOpposed Neutral Strongly
Supportive
Commitment to Proposed Change
NoYe
s
Have
Req
uire
d C a
pabi
lit ies
Assessing Potential Priority Targets