Transcript Schedule for the AT Kearney Business Unit Strategy Training Program
Introduction Module I Module II Module III Module IV Module V Roll-out Action 1 Action 2 Action 3 Action 4 Action 5 Module VI Conclusion
Introduction Objectives and content of the program
Contents
Administrative issues Strategy and its importance for A.T. Kearney Defining strategy and how business unit strategy compares to other types of strategy Objectives of A.T. Kearney’s Business Unit Strategy Training Program Content of A.T. Kearney’s Business Unit Strategy Training Program A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 2
Administrative issues
Welcome to the Business Unit Strategy Training Program
Help make ATK strategy capable Network with like minded colleagues
Goals of the Business Unit Strategy Training Program
Develop skills in strategic analysis Share and test experiences with others Source: A.T. Kearney Think about business issues from a strategic perspective A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 3
Administrative issues
About the creation of this program
Source: A.T. Kearney • The program was conceived and developed by the Global Strategy Initiative (GSI), an initiative begun in 1997 to raise A.T. Kearney’s strategy capability. The program is one of several deliverables resulting from the GSI • The program materials were developed by a team of A.T. Kearney consultants from around the world over the course of 9 months • The program was created using a “bottom-up” approach, in which sources from around the firm and academia were gathered and with time filtered into the “finished product” • This is the first version of the business unit training program. It will be updated and improved on a regular basis by a new team of A.T. Kearney consultants A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 4
Administrative issues
Personal introductions
• Name • Office • Experience with A.T. Kearney • Experience before A.T. Kearney • Specific strategy highlights Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 5
Administrative issues
What is your perspective on strategy, and what are your expectations of the course?
• What is your view on business unit strategy in general?
• What is your view on A.T. Kearney and business unit strategy?
• What are your expectations with regard to this training program?
Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 6
Schedule for the A.T. Kearney Business Unit Strategy Training Program
Administrative issues
Time 8-9 9-10 10-11 11-12 12-1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-?
Monday Introduction
Module I Lunch Guest Speaker Case preparation Case presentation Dinner Source: A.T. Kearney
Tuesday
Module II Lunch Case preparation Case presentation Dinner
Wednesday
Module III Lunch Module IV Case preparation Case presentation Dinner A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
Thursday
Module V Lunch Module VI Guest Speaker Strategy literature review Dinner
Friday
Final presentation Conclusion Lunch Introduction 7
Administrative issues
What are our expectations of you?
Source: A.T. Kearney
Expectation Attentive Punctual Curious Team-oriented Resourceful Helpful Comments
Give your attention and participate Be punctual to ensure efficient time management we have a lot of material to cover Ask questions - there are no bad ones Work within teams to reinforce concepts and enhance learning - and give it your full effort Draw upon what you have learned in the course and knowledge you have gained through project experiences and other schooling to augment analyses, presentations and group learning Provide feedback so we can make the course even better A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 8
Contents
Administrative issues Strategy and its importance for A.T. Kearney Defining strategy and how business unit strategy compares to other types of strategy Objectives of A.T. Kearney’s Business Unit Strategy Training Program Content of A.T. Kearney’s Business Unit Strategy Training Program A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 9
Strategy and its importance for A.T. Kearney
The consulting industry has undergone continuous change during the past two decades
1980-1989
External trends
•Globalization of markets 1990-1997 •Deregulation •Convergence of industries •Dismantling of conglomerates •Downsizing 1998 •Digital world •Virtual companies •Outsourcing •Regionalization (EU, NAFTA, APEC) •Concentration of industries •End-to-end capabilities
Consultants’ value proposition Key players
•Building strategy capabilities •Cost reduction •Organizational design •McKinsey •BCG •Bain •Booz•Allen & Hamilton
Key factors for success
•Problem solving capabilities •Industry knowledge/insights •Process facilitators on operations/IT •McKinsey •A.T. Kearney •BCG •Bain •Booz•Allen & Hamilton •Big six •International office network •Industry practices •McKinsey •A.T. Kearney •Big six (Big four) •CEO control •Integrated solutions Note: BCG, Bain, and Booz•Allen & Hamilton are not considered as key players of the future, based on with their present strategy focused offering. Shifts in focus or mergers and acquisitions can make these players more viable competitors in the future Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 10
A.T. Kearney must improve its strategy capability to become end-to-end capable
Strategy and its importance for A.T. Kearney 5 1 Strong capabilities Weak capabilities
A.T. Kearney’s current value proposition A.T. Kearney’s end-to-end capabilities
Strategy Operations Information technology 2 5 5 Need for improvement on a global basis Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 11
Strategy and its importance for A.T. Kearney
Introduction to A.T. Kearney’s Strategy Practice
Strategy practice mission statement
We seek to build the
premier
capability in developing
value and growth strategies
for
major
corporations worldwide and in driving implementation to measurable results We shall broaden our service offerings to include greater perception, ideas, frameworks and methodologies for solving corporate and
business unit
issues Source: A.T. Kearney We shall broaden our focus to strengthen current account relationships, while building relationships with the leaders of the future We shall achieve the image as a great strategic consulting company based on delivering superior contributions A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING We shall focus on further developing the growth potential across industries, particularly as it relates to information and technology Introduction 12
A.T. Kearney’s value proposition in strategy
Strategy and its importance for A.T. Kearney “A.T. Kearney’s Strategy Practice helps clients turn strategy into action. It sees strategy as the design of the entire business system and an integrated set of actions to continuously create and redefine competitive advantage. This is done through superior customer value with the aim of maximizing shareholder value in the long term” Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 13
Contents
Administrative issues Strategy and its importance for A.T. Kearney Defining strategy and how business unit strategy compares to other types of strategy Objectives of A.T. Kearney’s Business Unit Strategy Training Program Content of A.T. Kearney’s Business Unit Strategy Training Program A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 14
Defining strategy and how business unit strategy compares to other types of strategy
Some strategy definitions
Author(s) Sun Tzu Alfred D. Chandler, Jr.
Kenichi Ohmae James Brian Quinn Michael Porter Gerry Johnson & Kevan Scholes Definition
• Strategy is the great
work of the organization
. In situations of life or death, it is the Tao of survival or extinction. Its study cannot be neglected • The determination of the
long run goals and objectives of an enterprise
, and the adoption of courses of action and the
allocation of resources
necessary for carrying out these goals • Strategy is the way in which a corporation endeavors to
differentiate itself positively from its competitors
, using its relative corporate strengths to better
satisfy customer needs
• Strategy is the pattern or plan that integrates an organization's major goals, policies, and action sequence into a cohesive whole. A well-formulated strategy helps to marshall and allocate an organization’s resources into a unique and viable posture based on its
relative internal competencies and shortcomings, anticipated changes in the environment, and contingent moves by intelligent opponents
• Strategy is the
matching of a company’s strengths and weaknesses
to the
opportunities and threats in the environment
• Strategy is the
direction and scope
of an organization over the long term: ideally, which
matches its resources to its changing environment
, and in particular its
markets, customers or clients so as to meet stakeholder expectations
Source: Want, R.L. (1988);
A New Translation of Sun Tzu’s Classic
“
The Art of War
”;Chandler, A.D. (1960);
Strategy and Structure;
Ohmae, K. (1976);
Mind of the Strategist
; Quinn, J.B. (1988);
Strategies for Change
; Porter, M.E. (1980);
Competitive Strategy;
Johnson, G. & Scholes, K. (1993);
Exploring Corporate Strategy
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 15
Defining strategy and how business unit strategy compares to other types of strategy
A.T. Kearney’s business unit strategy definition enables consultants to carry out an “acid test” as to whether the client has a clear strategy that can enable the company to achieve success A Business Unit Strategy is about ...
an
integrated set of actions . . .
to
design the entire value system . . .
to
continuously create and rede fine competitive advantage . . .
through
superior customer value . . .
with the aim of maximizing shareholder value in the long-term
• Does the client manage the value chain in an integrated way?
• Does its plan include all of the needed actions?
• Is the delivery mechanism in place to meet strategic objectives?
• Is the value system effectively structured?
• Is the client's business competition oriented?
• Is the competitive advantage sustainable?
• Is the client's business customer oriented?
• Does the customer perceive sufficient value?
Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING • Does the company have a key strategic objective?
• Is the company maximizing shareholder value?
Introduction 16
Defining strategy and how business unit strategy compares to other types of strategy
The A.T. Kearney definition of BU strategy reflects the importance that the firm places on strategy for the future success of the company
an integrated
actions . . .
to design the entire
system . . .
set of
to
continuously create
and
redefine competitive advantage . . .
through superior
customer value . . .
with the aim of maximizing
shareholder value
in the long-term
value
A program of specified organizational, manufacturing, financial, and managerial actions aimed at integrating all resources of a BU towards a common goal The sequence of steps and their respective elements (technology, production design, sales, distribution, etc.) by which companies in a given business produce their goods or services and deliver to the customer Competitive advantage is what a company possesses when it earns or has the potential to earn a higher ratio of profit than its competitors. Competition without an advantage for any particular competitor results in a totally competitive market. The market’s forces will not allow any company to realize any returns beyond the cost of equity Competitive advantage needs to be sustainable in a way that competitors cannot copy or nullify the particular advantage The “value” that an end-user receives from the product, which could be economic (low price through cost reduction) or perceived benefit (qualitative) contributed by the product By maximizing profits, companies maximize shareholder value (the economic value received by owners of equity through dividend payments and/or increases in share price). Shareholder value maximization is widely seen as the appropriate goal of a company and the primary yardstick for measuring performance Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 17
Defining strategy and how business unit strategy compares to other types of strategy
Although strategy can encompass corporate, business unit and functional strategy, the focus of this training program is on the business unit
Industry • Strategies for industry restructuring • Corporate strategy and finance • M&A&D • Design of the corporation and corporate center • Resource allocation Corporate •
Corporate strategy
defines the scope of the company in terms of the industries and markets in which its various business units compete • Market and competitive strategies
Business unit
•
Business unit strategy
defines how the company competes within a particular industry or market “Where to compete” “How to compete” Business unit R&D Personnel Finance Production Sales and marketing •
Functional strategy
defines the detailed deployment of resources at the operational level Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 18
Defining strategy and how business unit strategy compares to other types of strategy
What is a strategic business unit (SBU)?
Definition of an SBU
• A strategically and functionally distinct execution-oriented entity that is usually a subset of a corporation • A unit that has a: – Well-defined market (or market segments) – Well-defined group of competitors – Well-defined business system that serves the market • A unit grouped as such to optimize the collective organizational capabilities among its constituent entities Source: A.T. Kearney; Kotler, P. (1997);
Marketing Management
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
Some traditional characteristics
• It is a single business, often with its own P&L responsibilities, or collection of related businesses that can be planned separately from the rest of the corporation/other business units • It has its own competitors, which it is trying to surpass • It has a manager who is responsible for strategic planning, profit, and performance Introduction 19
Defining strategy and how business unit strategy compares to other types of strategy
The main elements of a business unit strategy
Product/market
“Where to compete”
In which segments should the company compete?
Strategic roadmap
“When to compete” Capabilities?
?
Action?
Critical path
?
Competitor reaction?
At what time and in which sequence should a strategy be executed?
Source: A.T. Kearney
Iterative process
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
Business system
“How to compete” R&D Design Manuf.
S&M Service
How should the business system be designed?
Introduction 20
Defining strategy and how business unit strategy compares to other types of strategy
Strategy projects differ from other types of engagements in several ways
Source: A.T. Kearney • Unique to each engagement and therefore issue-driven and more flexibly structured • There is not one approach that will work for every situation. However, for every company in every situation, there will be an ideal approach • Broader in scope • More long-term oriented in nature and results might often be intangible for several years • Characterized by ambiguity and a high degree of uncertainty as consultants often don’t know where the project will “end up” • Characterized by many iterations throughout the project due to new findings which can result in changes to the scope and the nature of the project • Characterized by a process and not a single approach A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 21
Defining strategy and how business unit strategy compares to other types of strategy
Strategy projects differ from other consulting projects in their process approach
Mechanical systems thinking Intuition Strategic thinking
Problem prototype Process of thought Solution Rearrangement of elements Local optimization, or seeing the tree, not the forest Source: Ohmae, K. (1976);
The Mind of the Strategist
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Transformation or changed configuration Introduction 22
Contents
Administrative issues Strategy and its importance for A.T. Kearney Defining strategy and how business unit strategy compares to other types of strategy Objectives of A.T. Kearney’s Business Unit Strategy Training Program Content of A.T. Kearney’s Business Unit Strategy Training Program A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 23
The main objectives of the program
Company objectives
• Strengthen A.T. Kearney’s overall strategy consulting delivery capabilities • Raise A.T. Kearney consultants’ strategy skills to a higher level • Teach A.T. Kearney consultants techniques likely to be applied in many future strategy engagements • Teach A.T. Kearney’s unique and execution oriented perspective on strategy • Establish a common vocabulary and point-of departure for all A.T. Kearney strategy engagements Objectives of A.T. Kearney’s Business Unit Strategy Training Program
Individual objectives
• Add to portfolio of consulting skills • Offer broader career possibilities within A.T. Kearney • Satisfy intellectual curiosity • Broaden one’s perspective towards consulting engagements Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 24
Objectives of A.T. Kearney’s Business Unit Strategy Training Program
Take-away objectives from the “instruction” and “case” sections of the program
The “instruction” section
• Understanding of the fundamental strategy analysis techniques • Familiarization with strategy concepts that consultants are most likely to apply • Endowment of knowledge that enables consultants to “know where to go,” when asked to use the techniques • Ability to practically apply the knowledge gained from the course in strategy engagements
The “case” section
• Reinforce the concepts taught during the class • Understand when, how, and to what extent to apply the techniques - realizing that use of the analyses will vary with each engagement • Realize that other project-specific strategy techniques are also required in a consulting engagement • Understand how to structure a logical and methodical game plan when approaching a strategy project • Be prepared to “hit the ground running” when staffed on an assignment Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 25
Objectives of A.T. Kearney’s Business Unit Strategy Training Program
The objective of the training program is to teach a set of techniques that form the building blocks of analysis in strategy engagements and not to teach an approach
Issue/client objective Solved by Approach Contains Framework Defines Deliverable Technique Shows Example Shows Uses Tool
Business issue Framework Approach
A question which expresses the client’s concern or the uncertainties which must be resolved to achieve the client’s objective. Issue questions are not rhetorical, they should have clear alternative solutions and significant consequences associated with the answer A way of looking at a client’s business issue; a set of building blocks, planks or beliefs that determine at a high level how we might approach a client issue; that ultimately translates to a collection of deliverables A logical structure or sequence of deliverables that might span frameworks. There is no one “approach” to strategy
Deliverable
A result or insight necessary for the client to reach its objective; that which A.T. Kearney delivers to our client (or to internal clients within A.T. Kearney) as a result of our proposed solutions and engagement efforts
Technique
A method, model, or calculation that produces a deliverable
Tool Example
A spreadsheet, model, database, survey or software used as part of a technique to produce a deliverable A specific illustration or application of a deliverable, technique, or tool, generally drawn from a client engagement but sanitized so that the client is unrecognizable Source: A.T. Kearney, Centres of Excellence A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 26
Objectives of A.T. Kearney’s Business Unit Strategy Training Program
This program focuses on teaching techniques because there is not a standard approach to strategy
Techniques allow consultants to:
• Be flexible in modeling analyses after issues instead of being confined to rigid approaches that may not be relevant in all engagements • Think with a strategic perspective • Adapt skills to other types of consulting engagements Overall strategy frameworks and approaches are not the focus of this program as they vary greatly from client to client and project to project Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 27
Objectives of A.T. Kearney’s Business Unit Strategy Training Program
The training program focuses intensively on exercises and examples to ensure that the theoretical knowledge can be practically applied
Module
I II III IV V VI
Example
Oil and gas services company Food and beverage industry Copier company n.a.
Automotive industry n.a.
Exercise
Big Kahuna Company/ Cessna Aircraft Company Airline industry Coca Cola n.a.
Petroleum industry n.a.
Case
Motorola A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 28
Objectives of A.T. Kearney’s Business Unit Strategy Training Program
The techniques taught in this program do not cover all of the areas that might be relevant in strategy projects
Illustrative • The techniques which are taught in the program are the most commonly used techniques in BU strategy engagements • However, some techniques are not described, because they either are covered by other training programs or do not specifically relate to BU strategies Change Management (Enterprise Transformation ) BU strategy program Finance (CEO Agenda) Purchasing (Strategic Sourcing) Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 29
Objectives of A.T. Kearney’s Business Unit Strategy Training Program
This program is complementary to A.T. Kearney’s other major training programs
Orientation Engagement execution Engagement management Business development Account management Leadership
Business process Target audience NCO CEO BUS/ SS LSPD ET
Source: A.T. Kearney
MS
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
BUS: SS:
Business Unit Strategy
CEO: ET: MS:
CEO Agenda Revised version of “Transforming the Enterprise”
LSPD:
Lead Strategy and Proposal Development
NCO:
VP- Mind setting program New Consultant Orientation (including Pyramid and Consultant Process Workshop) Strategic Sourcing Introduction 30
Objectives of A.T. Kearney’s Business Unit Strategy Training Program
This program can be viewed as A.T. Kearney’s “chess book”
If A.T. Kearney were a
chess club
, it would want to establish a set of commonly used, advanced and structured techniques to “play its own game” To help clarify these techniques and their use, we are putting them in a “
chess book
” for the use of all club members The goal of the chess book is
not to develop
new or proprietary techniques, but
to collect and explain
the most commonly used ones
to ensure coherent and successful chess playing
Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 31
Contents
Administrative issues Strategy and its importance for A.T. Kearney Defining strategy and how business unit strategy compares to other types of strategy Objectives of A.T. Kearney’s Business Unit Strategy Training Program Content of A.T. Kearney’s Business Unit Strategy Training Program A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 32
Content of A.T. Kearney’s Business Unit Strategy Training Program
The structure of the Business Unit Strategy Training Program
Module II
Structure and dynamics of the industry
Module I
Identification of the key issues of the engagement
Module III
Characteristics and dynamics of the individual companies
Module V
Definition and evaluation of strategic alternatives
Module VI
Implementable recommendations Roll-out
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Action 1 Action 2 Action 3 Action 4 Action 5 Module IV
Execution capacity of the client Note: The order of presentation of the curriculum elements should not be interpreted as a sequential guideline for a strategy engagement. Different elements of the program may be referenced at different times in the engagement Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 33
Content of A.T. Kearney’s Business Unit Strategy Training Program
The content of the program is structured such that related techniques are categorized into deliverables and related deliverables into modules
Module:
A collection of deliverables that together address a key issue
Deliverable:
A collection of techniques that address specific issues or sub-issues
Technique:
A specific analysis performed to test hypotheses
Description:
A technique put into context through a definition and/or a description
Usage:
Why, how, and when the technique is applied
Methodology:
The process for using the technique
Example:
A “real-life” presentation of a technique as it would be presented in its completed form
Exercise*:
A short exercise that requires the participants to employ the technique
Conclusion:
A summary of key points, strengths, weakness, and references * Exercises are located separately in a workbook Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 34
Modules I and II: Deliverables and Techniques
Module
I.
Identification of the key issues of the engagement II. Structure and dynamics of the industry
Deliverable
• Key issues of the engagement • Industry structure • Development of the industry • Product/market analysis • Demand and supply economics • Industry analysis frameworks • Issue analysis
Technique
• Players analysis • Strategic group analysis • Substitution analysis • Supply chain analysis • Exit and entry barrier assessment • Industry strategic era analysis • Life cycle analysis • Trends analysis • Size and growth of the market • Product/market segmentation • Demand and supply economics • Structure-conduct-performance • The five forces • The strategic triangle Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 35
Modules III and IV: Deliverables and Techniques
Module
III. Characteristics and dynamics of the individual companies IV. Execution capacity of the client
Deliverable
• Overall company profile • Product/market focus • Overview of the value chain • Financial resources and performance • Company analysis frameworks • Assessment of execution capacity
Technique
• Purpose of the organization • Stakeholder analysis • Strategic era analysis • Strategic planning framework • Evaluation of product/market segments • Value chain analysis • Cost and margin driver analysis • Development over time • Financial ratios • 7S • Benchmarking • SWOT • Operational capacity assessment • Organizational capacity assessment • Information technology capacity assessment Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 36
Modules V and VI: Deliverables and Techniques
Module
V.
Definition and evaluation of strategic alternatives
Deliverable
• Decision-making • Long-term scenarios • Generic strategy frameworks VI. Implementable recommendations • Implementable recommendations
Technique
• Decision tree • Game theory • Scenario planning • End game • Three generic strategies • Gaining strategic advantage • The growth matrix • Implementation plans Source: A.T. Kearney A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING Introduction 37