Transcript carpenter_ppt_ch01_edit.ppt

Chapter 1
Introducing Strategic
Management
Copyright © 2012 Pearson Canada Inc.
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Three Overarching Themes
Implementing a good
strategy is at least as
important as creating
one, yet many
managers give too
little thought to
implementation


To succeed,
the formulation
of a good strategy
and its implementation should be
inextricably
connected
Firms and
industries are
dynamic in
nature

Strategic leadership is essential for a
firm to be able to both
formulate and implement strategies that
create value
Strategic leadership
is responsible for
 making substantive
resource allocation
decisions and
developing keystakeholder support
of the strategy
We need to see a firm’s competitive position, not as a snapshot, but
as an ongoing movie
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What is Strategic Management?
Strategic Analysis
• Internal
• External
Strategy
Vision and
Mission
Goals and
Objectives
• Fundamental
•Specific
targets
organizational
purpose
• Organizational
values
•
•
•
•
•
Arenas
Vehicles
Differentiators
Staging
Economic logic
The coordinated means
by which an
organization pursues its
goals and objectives
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Implementation
Levers
and
Strategic
Leadership
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Strategy Formulation and Implementation
Arenas
• Where will we be active? (and with
The Business Strategy Diamond
Arenas
Staging & Pacing
• What will be our speed and
sequence of moves?
– Speed of expansion?
– Sequence of initiatives?
Staging
& Pacing
Economic logic
• How will returns be obtained?
– Lowest costs through scale
advantages?
– Lowest costs through scope
and replication advantages?
– Premium prices due to
unmatchable service?
– Premium prices due to
proprietary product features?
Economic
logic
how much emphasis?)
– Which product categories?
– Which channels?
– Which market segments?
– Which geographic areas?
– Which core technologies
– Which value-creation strategies?
Vehicles
Vehicles
• How will we get there?
– Internal development?
– Joint ventures?
– Licensing/franchising?
– Alliances?
– Acquisitions?
Differentiators
Differentiators
• How will we win?
– Image?
– Customization?
– Price?
– Styling?
– Product reliability?
– Speed to market?
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Strategy Formulation and Implementation
Framework for Strategy Implementation
Implementation levers
• Organizational structure
Intended
Strategy
• Systems and processes
• People and rewards
Realized
Strategy
Strategic leadership
• Lever- and resource-allocation decisions
• Decision support among stakeholders
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Strategy Formulation and Implementation
Implementation Lever - Organizational Structure
Structure is the manner in which responsibilities, tasks, and people are
organized. It includes the organization’s authority, hierarchy, units,
divisions, and coordinating mechanisms.
Key structural questions that managers must consider when implementing
a strategy:
■ Is the current structure appropriate for the intended strategy?
■ Are reporting relationships and the delegation of authority set up to
execute the strategic plan?
■ Is the organization too centralized (or decentralized) for the strategy?
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Strategy Formulation and Implementation
Implementation Lever – Systems and Processes
Systems and processes are all the organizational
processes and procedures that plan, coordinate, and
control the work of people in the organization. They
include control and incentive systems, resourceallocation procedures, information systems,
budgeting, distribution, and so forth.
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Strategy Formulation and Implementation
Implementation Lever – People and Rewards
The people and rewards lever of the model underscores
the importance of using all of the organization’s
members to implement a strategy. Regardless of the
strategy, at the end of the day, the people in the
organization will have to implement it. Competitive
advantage is generally tied to the company’s human
resources.
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Strategic Formulation and Implementation
Strategic Leadership
Strategic leadership plays two critical roles in successful
implementation of a strategy:
(1) making substantive implementation lever and
resource-allocation decisions, and
(2) developing and maintaining support for the strategy
from key stakeholders.
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What is Competitive Advantage?
Three Perspectives on Competitive Advantage
Internal
External
Dynamic
Often called the “resource
view,” contends that firms
are heterogeneous
bundles of resources and
capabilities and firms with
superior resources and
capabilities enjoy
competitive advantage
over other firms. This
advantage makes it
relatively easier to achieve
consistently higher levels
of performance.
Also called the “positional
view,” contends that
variations in a firm’s
competitive advantage and
performance are primarily
a function of industry
attractiveness. Companies
should therefore either (1)
position themselves to
compete in attractive
industries or (2) adopt
strategies that will make
their current industries
more attractive.
Suggests that in dynamic,
rapidly changing markets,
a firm’s current market
position is not an accurate
prediction of future
performance. Instead, we
look at the past for clues
about how the firm arrived
at its current position and
to future trends – both
internal and external – in
an effort to predict the
future landscape
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