Transcript http://www.pwc.com/bg/en “Business Acumen Series” for Telerik Academy Some people dream of great accomplishments while others stay awake and do them. Dr.

http://www.pwc.com/bg/en
“Business Acumen Series”
for Telerik Academy
Some people dream of great
accomplishments while others stay
awake and do them.
Dr. Constantine Kiritsis
Entrepreneur
“Business Acumen Series” – programme overview
June 2015
– July 2015
Part I
Introduction
to the
Business*
I. Corporate organisation
II.
Business effectiveness skills
III. Leadership
* Certificate of attendance
requires 32 training hours of
participation
Continue in Part II after successfully passing all tech exams
November 2015
– January 2016
* *Certificate of
completion requires
min 60 training hours
of participation
PwC’s Academy Bulgaria
Part II
IV. Finance basics
V. Planning and evaluating
business ideas
Essentials in
business
knowledge and
skills**
Case study – Telerik employees group work
VI. Managing projects
VII. Business performance,
innovative thinking and
entrepreneurial mind set
Business case – Telerik employees group work
2
Programme & Overview
The philosophy
The Objectives
PwC
•
Understanding business & organizations
•
Understanding Strategy
•
Learning low to analyse & plan
•
What to expect
3
The basics
About your trainer: [email protected]
The importance of business modeling and mapping
Inspiration
Management, Business and the 80 / 20 principle
Entrepreneurship, Intrapreneurship
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80/20
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“The best way to predict
the future is to invent it”
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Life isn’t about finding yourself…
It’s about CREATING yourself
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About success
Success doesn’t come to you...
You go to it…
Believing in yourself...
And preparing well...
Learning constantly…
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Setting up a business idea
1.Existing Idea - Do something better!
2. Blue Ocean - Innovation!
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Constant Changes
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What a Difference a Century Can Make
(Contrasting Views of the Corporation)
Characteristic
20th Century
21st Century
Organization
Focus
Style
Source of Strength
Structure
Resources
The Pyramid
Internal
Structured
Stability
Self-sufficiency
Atoms – physical
assets
Vertical integration
Mass production
Domestic
Quarterly
The Web or Network
External
Flexible
Change
Interdependencies
Bits – information
Operations
Products
Reach
Financials
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Virtual integration
Mass customization
Global
Real-time
11
Ex. continued
Characteristic
20th Century
21st Century
Inventories
Strategy
Leadership
Workers
Months
Top-down
Dogmatic
Employees
Security
To compete
Affordable best
Hours
Bottom-up
Inspirational
Employees/ free
agents
Personal growth
No compromise
Job Expectations
Quality
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A few interesting points for the 21st century:
Change
Communication
Globalization
Internet – Technology
New strategies
Small businesses & Entrepreneurship
Partnerships
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Trends Driving Organizational Structure
Speed of Decision Making
Globalization
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Internet
14
Classic questions:
What’s a “market”?
Service or Product?
Is my idea viable? – How can I screen it?
Sustainability?
Can I have competitive advantage?
Project Planning
Proje
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A few stories…It’s in the way we think…
The “shoe” story (market vs non – market)
The cake story (4 straight lines)
The Kodak story…
The dot.com story…
Our culture…
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Classic mistake!
Someone else have already done this!
SO WHAT?!
About monopolies…
Project Planning
Proje
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How?
Idea: Can you find a problem? Then, solve it!
Are you good at something? Go for it!
Requirement: Have a plan, focus & stick to it
Project Planning
Proje
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The “Me too” theory
About products + Services
“ The surplus society has a surplus of
similar companies, employing similar
people, with similar educational backgrounds,
working in similar jobs, coming up with
similar ideas, producing similar things,
with similar prices, warranties, and qualities.”
Authors, Funky Business
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How to sustain competitive advantage
Since almost everything can be copied these days,
the only way to succeed is to have the ability
to learn and change + embrace change and
also manage your
knowledge to become innovative.
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Entrepreneurship
Innovation is NOT a choice,
it is a necessity…
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In essence, find a problem…and SOLVE it…
Make simple questions:
•
What is causing a problem to my client?
•
What services can be customized?
•
What about our process?
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Next (basic) steps
Environment (i.e. PESTELID)
Competition
Data & Forecasts
Capabilities – Resources
Identifying Critical Success Factors & KPIs
Resources & Team
Strategy – competitive advantage?
Marketing
Overall Plan
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“Ideas are like busses.
If you miss it, there is always another
one coming...”
Richard Branson
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Strategy Levels,
Competitive Advantage &
Mapping at all levels
25
Why is Strategy Necessary?
To set direction
To focus the organization
To provide consistency
To define the organization
To satisfy a need for order
To exploit resources/opportunities efficiently
To enable managers to focus on smaller issues
To provide stability
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Strategy
Expectations
and
Objectives
Environmental
Forces
Resource
Capability
STRATEGY
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Finally, “What is strategy?”
Strategy is the direction and scope of an organisation
over the long term: which achieves advantage for the
organisation though its configuration of resources
within a changing environment, to meet the needs of
markets, customers or clients and to fulfil stakeholder
expectations.
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Management Hierarchy
CORPORATE
Strategic
Planning
BUSINESS
FUNCTIONAL
Management
Control and
Tactical Planning
Operational Planning and
Control
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Three stages of understanding strategy - MAP
Analysis
Choice
Implementation
(Johnson & Scholes)
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Analysis part
Analysing through a
mapping procedure
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A Typical Approach – Rational map
1.
Analyse the situation
2.
Identify possible options
3.
Develop criteria for evaluating options
4.
Select the option
5.
Plan implementation
6.
Implement the strategy
7.
Evaluate effectiveness of the strategy
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The Simple Rational Model
ENVIRONMENT
ANALYSIS
POSITION
ANALYSIS
OBJECTIVE
SETTING
CONTROL AND
REVIEW
STRATEGIC
CHOICE
STRATEGIC
IMPLEMENTATION
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The Strategy framework - VMOST
Vision
The big idea, its aspirations
Mission
The organisation’s purpose, what it
provides
Objectives
Specific targets, to achieve “x” by “y”
Strategy
What it is going to do to achieve its vision
and objective
Tactics
The day-to-day means of delivering the
strategy, or how to do it
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Vision & Mission (“Why video”)
Vision: Aspirations … The big idea
Mission: Ensure this is based on the firm’s strategic
position and capabilities – NOT WISHFUL THINKING.
What is the company trying to do and where does it want
to go.
THE “WHY” factor
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The Stakeholder (noted in your strategy map)
“Stakeholders are the various individuals and
groups who have an interest in the future
development of the organisation.”
Stakeholders include:
•Shareholders, employees, customers, suppliers and financial
institutions
•A strategy must ensure a convergence in corporate and stakeholder
objectives.
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Stakeholders
Competitors
Pressure
groups
Outer circle
Media
Customers
Inner circle
Suppliers
Board
Employees
Unions
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Shareholders
Government
Analysts
37
Stakeholder mapping: Mendelow
Low
Level of interest
High
Low
Minimum effort Keep informed
Power
Keep satisfied
Key players
High
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The Organization and its Environment
The Wider
Environment
The Business
Environment
The
Company
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Environmental Analysis
Political
(P)
Legal
Economic
(E)
Social
(S)
Legal?
(L)
Environmental (E)
Technological
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(T)
40
Structural Analysis of industries – Competition
Analysis
5 Forces Theory
(M. Porter)
-a model of the structure of industries
and competition.
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Common Mistakes in Identifying Competitors
• Overemphasizing current and known competitors
while ignoring potential entrants
• Overemphasizing large competitors while ignoring
small ones
• Overlooking potential international competitors
• Assuming competitors will continue to behave in
same way
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Forces Driving Industry Competition
New
Entrants
Bargaining
power
of suppliers
Suppliers
Threat of new entrants
Industry Competitors
Rivalry Among
Existing Firms
Bargaining
power
of buyers
Buyers
Threat of substitute
products or services
Substitutes
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Competition (Other influences)
Market Structure
Government and legal issues
Competitions Commission
Consumer Organisations/Trading Standards
UAE restrictions
World Trade Organisation
Patents and Trade marks
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PORTER’S DIAMOND
National Competitive Advantage
• A country has a comparative advantage when it can
achieve a lower cost of production due to a focus on a
cooperative specialization in a particular product
• A firm can have a competitive advantage when a
country has great supplies of an item / components,
natural resources, quality or market factor differences,
geographic uniqueness, economies if scale, customer
base etc…
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Porter’s Diamond
FAVOURABLE
FACTOR CONDITIONS
DEMAND
CONDITIONS
RELATED AND
SUPPORTING
INDUSTRIES
FIRM STRATEGY,
STRUCTURE AND
RIVALRY
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Factor conditions
National Competitive Advantage
Key factors have global impact and are affected by
government and chance.
Some Examples include:
• Land & Mineral Resources
• Capital
• Climate
• Knowledge
• Human Resources
• Infrastructure
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Why Cluster?
Technology “spill over”
Concentration of specialist personnel
Concentration of specialist equipment
Specialist financial & investment services
Ready market for suppliers
Regional market power
Reduced costs upstream and downstream
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The role of Economics & Forecasting
Organizations need data to assess their competitive
environments & industries
Statistical models and their use
Economics – stats and trends
Projections, forecasts and analysis
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How to start crafting strategy (an idea)
What is critical for your business?
(Critical Success Factors)
Capabilities – What are your capabilities?
Resources – What kinds of resources do we have?
(M’s theory: Money, Men & women, Make – up, Machinery)
Competencies – What are your skills?
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Critical Success Factors Analysis &
Key Performance Indicators
Defined as “areas in which satisfactory results will ensure
successful competitive performance”
Typically 3-4 CSFs
Key Performance Indicators (KPIs) used to measure
attainment of CSFs
Used to monitor current performance
Indicating when performance falls within alert ranges
Compares current performance to past performance
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Recent Thinking on the sustainability of
Competitive advantage (M. Porter)
“There are no sustainable competitive advantages
anymore”
“Any strategy can be imitated”
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Recent Thinking on the sources of competitive
advantage
“The only competitive advantage is
the ability to learn & change”
No company can predict the future
New strategies: Differentiation & Cost?
Blue Ocean theory
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Competitive Advantage
Generic Strategies – How to compete?
Product Differentiation
Cost Leadership
Product quality
Customer value
Customer Trust
Product innovation
Access to factors
Economies of scale
Economies of scope
Process innovation
Niche-market Leadership/Dominance
Market share
Market dominance
Channel dominance
Standard dominance
Michael Porter
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Can a combination of strategies be used?
Porter says that companies may be “stuck in the middle”
Success may be evident only through
Strategic Business Units using a different strategy
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Strategic Clock
High
Differentiation
4
Hybrid
3
Focussed
differentiation
5
Perceived value/ Low
2
benefit
price
6
1
7
8
No frills
Strategies
destined for
ultimate failure
Low
Low
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Perceived price
High
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Sustainability of a competitive advantage
Achieving a competitive advantage is difficult
Sustaining it is even more difficult!
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The Lifecycle Model (understanding how products may
become strategic)
Development
Growth
Shakeout
Few
Early
adopters
Rapid growth
Mass market
Trial by
innovators
Increasing
market
penetration
Growing
selectivity of
purchase
Replacement
purchase
Very few
Entry of
competitors
Shake-out of
weakest
Fight to keep
market share
at expense of
competitors
Sales
Time
Buyers
Competitors
Failures,
mergers and
acquisitions
Excess capacity
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Maturity
Price
competition
Decline
Collapse of
demand
Exit of some
competitors
Emphasis on
efficiency/low
cost
Price wars
Johnson and Scholes (2001) 58
The Value Chain – transformation
The operations of an organisation
Inputs
Transformation
process
Outputs
An example of the transformation process for
a typical manufacturing process
Technology
Product design
Manufacturing
Marketing
Distribution
Service
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The Value Chain
Activities
Support
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound
logistics
Operations
Outbound
logistics
Marketing
& Sales
Service
Primary Activities
Competitive Advantage, Porter, M., 1985, The Free Press
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The Value System
How is the organisation’s value chain linked to your suppliers and
your customers? Are there sources of competitive advantage here?
Supplier
value
chains
Channel
value
chains
Customer
value
chains
The
Organisation’s
value chain
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Business Processes & Business Modelling
• Strategic business processes, such as new product design or
high sensitivity customer care, provide unique and durable
business advantages to organisations.
• Looking at the business in terms of activities and processes
opens up scope for challenging the ways in which things are
done, and coming up with improvements, or sometimes more
radical changes.
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A redesign methodology
Business process redesign (BPR) takes a ‘clean sheet’
approach and typically has 5 stages:
Create a project plan
Analyse the existing process for problems
Design solutions for these problems
Develop resources to provide these solutions
Implement and test the new process
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Market Positioning
A
C
E
B
D
Price
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Basics: The Marketing Mix
PRODUCT
Design/sizes colours
Materials
Specification
Quality
Packaging
After-sales service
PRICE
List price
Discounts
Payment terms
Service/spares
prices
PEOPLE
PROMOTION
Advertising
Brochures/data sheets
Public relations
Personal selling &
networks
Exhibitions
Gift/sales aid
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Skills
Competency
Capabilities
Resources
PLACE
Location
Retail/wholesale
Mail/telephone
order
Delivery methods
PROCESS
Time saving
Customer focused
User friendly
PHYSICAL
EVIDENCE
Dress code
Building, premises
Vehicles
65
SWOT Analysis
Based on assumption an effective strategy derives from a
sound “fit” between a firm’s internal resources and its external
situation
Opportunities
Threats
A major favorable situation
in a firm’s environment
A major unfavorable situation
in a firm’s environment
Strengths
Weaknesses
A resource advantage relative A limitation or deficiency in one
to competitors and the needs or more resources or competencies
relative to competitors
of markets firm serves
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Turning your static SWOT into a dynamic SWOT
From SWOT to TOWS
Innovation & the innovator’s dilemma…
Knowledge Management…how to be innovative from your
through your won knowledge…
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Strategic analysis and options
Internal growth
Large
PHASE 1
PHASE 2
PHASE 3
PHASE 4
Crisis of
Red Tape
Revolution stages
Evolution stages
Crisis of
autonomy
Crisis of
leadership
4. Growth through
CO-ORDINATION
3. Growth through
DELEGATION
2. Growth through
DIRECTION
1. Growth through
CREATIVITY
Small
Young
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Growth
through
COLLABORATION
Crisis of
control
Size of
organisation
PHASE 5
Crisis of
?
Age of organisation
Mature
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STRATEGY (again - examples)
What is a Strategy
What is NOT a strategy
• A different value chain
• Aspirations
• A unique value proposition
• A vision
• Continuity of position &
continuity in realizing it
• Learning
• Innovation
• The internet
• Mergers…
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3 Final Points
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The answer
Take
action,
not notes
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Is there always
a gap
in the market?
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“Whether you think
you can,
or
you think you can’t…
you’re right”
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Suggested further reading on Strategy and
Business:
• “Good to great” – Jim Collins – (On Business)
• “The big 100” - Jeremy Kourdi – (On Business Models)
• “Small is the new big”– Seth Godin (On Size In Business)
• “What is Strategy”, Porter, M. (1996) Harvard Business Review (On
Corporate Strategy)
• “Exploring Corporate Strategy”, Johnson, Scholes & Whittington
(2010), 8th edition Pearson publication
• “Where good ideas come from” - Stephen Johnson; (On Ideas)
• “Rich dad Poor dad” – R. Kiyosaki - (On Thinking Differently)
• “On Competition”, Porter, M. (2008) Harvard Business Review (On
Competition)
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Thank you!
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