MIT 1.46
Harvard Design School 7401
Strategic Management
Conclusion
Industry Selection
Career Strategies
Objectives
• Presentation:
– Review Lessons:
• Cases and Concepts
– Careers:
• Help Students Plan Strategically
• Discussion, Q & A
• 2:30 - Course Evaluations
December 9 & 11, 2002
Strategic Management Conclusions and Context
2
Cases in the Industry Value
System
• Owner / Operators
– Poland’s A2 Motorway
• Designers
– TAC The Architect’s Collaborative
– DESTINI
• Constructors
– Young Canada
– Del Webb
– Savannah West (Willy Welsh)
– B2Bilt
• Subcontractors and Building Products Manufacturers
– KONE: The Monospace Launch in Germany
– Arborite
– Wood Structures, Inc.
– Otisline
December 9 & 11, 2002
Strategic Management Conclusions and Context
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Cases – Key Points
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Poland’s A2 Motorway -- The Money; The Players
Young Canada -- What to sell to whom?
Del Webb -- Adapting to changes in markets and leadership
Savannah West (Willy Welsh) -- How to grow beyond one
person?
B2Bilt -- How to keep the benefits of innovation
TAC – How to match staffing, sales, and skills
DESTINI – 3D Modeling tied to Databases; Impact on System
KONE: The Monospace Launch in Germany – Signaling
Differentiation; How to Price
Arborite -- How to implement a low cost strategy
Otisline - Overcoming fragmentation; “Big Wins” with
information technology
Wood Structures, Inc. - How to put marketing, manufacturing,
production, human factors all together
December 9 & 11, 2002
Strategic Management Conclusions and Context
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Strategy Concepts
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Purpose of Strategic Planning
Industry Value System
Reward, risk, roles
Steps in planning
Market Segmentation
Segment Attractiveness (5 forces)
Generic Strategies
Low Cost / Differentiation Strategies
Firm Value Chain
Fragmentation: Overcome or Cope
Vertical Integration
How Information Gives You Competitive
Advantage
December 9 & 11, 2002
Strategic Management Conclusions and Context
5
A Format for Career Thinking
• Construction industry
• Megatrends
• Demographics
December 9 & 11, 2002
Strategic Management Conclusions and Context
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About the Construction Industry:
Characteristics
• Huge - $4 tr worldwide
• Local
• Project Based
• Unique end product
• Hundreds of firms all
working with dozens
of firms
• Low barriers to entry
• High barriers to exit
December 9 & 11, 2002
Traditional Implications
• Few economies of
scale
• Fragmentation
– (ENR 400 in aggregate
< 25% of US market)
• Low margins
• High risk
• Same in related
sectors - A/E, RE
Strategic Management Conclusions and Context
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Demographics
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US
World
Population & GDP
Industry Composition
www.buildingvision.net
BuildingVision Library
December 9 & 11, 2002
Strategic Management Conclusions and Context
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Efficiency
• There will be fewer PMs and architects
• Work will flow to the capable
• How to be capable?
– Technical skill
– Judgment
– Leadership effectiveness
• Skill
• Vision
• Character
• How to convey capability?
– Signaling differentiation via communication and
promotion.
December 9 & 11, 2002
Strategic Management Conclusions and Context
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Your Personal Strategies:
• Your market segmentation plan?
– Types of Services: Architect, engineer, developer,
constructor?
– Buyer Types: Projects and companies (civil,
residential, commercial)?
– Geographies?
• Attractiveness of Segments?
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What you like
What you know
What cards you hold
How you are differentiated
December 9 & 11, 2002
-Size
-Growth
-Opportunity to Add Value
-Competitive Structure
Strategic Management Conclusions and Context
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Timing: Segments of Careers
What is your mission in the long run?
What skills do you need?
Who do you need to know?
Don’t preclude options!
What can you do in the next segment
that builds on these needs, and also
preserves your options?
December 9 & 11, 2002
Strategic Management Conclusions and Context
11
What counts in the end:
• Communication,
• Capability,
• Character.
Strategy and technology are nice. But
success is about PEOPLE.
December 9 & 11, 2002
Strategic Management Conclusions and Context
12
MIT
Construction Engineering and
Management
HARVARD
Design School
Strategic Management
in the Design and
Construction Value System
macomber@mit.edu
jmacomber@gsd.harvard.edu