The Wisdom of Ratbert….

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PRESENTATION SLIDES
To accompany:
Contemporary Strategy Analysis:
Concepts, Techniques, Applications
(4th edition, Blackwell, 2002)
Robert M. Grant
Assisted by Kate Grant
The Concept of Strategy
OUTLINE
• The role of strategy in success
• A framework for strategy analysis
• The evolution of strategic management
• Corporate strategy and business strategy
• Strategy making: Design or process?
• The role of strategy
Elements of Success
GOALS
MADONNA
GIAP & NORTH
VIETNAMESE MILITARY
Single-minded quest for
stardom.
Reunification of Vietnam
under Communist rule.
ALEX FERGUSON
& MAN UNITED
Success in soccer—an
escape route from
poverty in Glasgow
UNDERSTANDING Identified emerging trends
THE
in popular culture.
ENVIRONMENT
Recognized power of sex.
Understood showbiz
distribution channels.
Intimate knowledge of terrain. Clear recognition of
Understanding U.S. political
importance of discipline,
system.
training, motivation, &
competitive intelligence
RESOURSE
APPRAISAL
Recognized limited raw
talent. Relied on strengths
in self-promotion, imagecreation, relationship
management
Recognized economic and
military weaknesses and
political strengths.
Combined internal development of skills with
acquisition of key players.
Nurturing of team
capabilities
IMPLEMENTATION
Commitment to hard work.
Disciplined, inspirational
Leadership. Attention to
detail.
Tight control. Long-term
commitment. Effective
propaganda. Inspirational
leadership.
Effectiveness in motivating
players, demonstrating
commitment.
Common Elements in Successful Strategy
Successful
Strategy
EFFECTIVE IMPLEMENTATION
Long-term,
simple and
agreed
objectives
Profound
understanding of
the competitive
environment
Objective
appraisal of
resources
What is Strategy?
• Distinguishing strategy from tactics:
– Strategy is the overall plan for deploying
resources to establish a favorable position.
– Tactic is a scheme for a specific maneuver.
• Characteristics of strategic decisions:
– Important.
– Involve a significant commitment of
resources.
– Not easily reversible.
The Evolution of Strategic Management
DOMINANT
THEME
MAIN
ISSUES
CONCEPTS
&
TECHNIQUES
IMPLEMENTATION
1950s
1960s
Early-mid Late1970s
1970s
early 1980s
Late 1980s Late 1990s
early 1990s early 2000s
Budgetary
planning &
control
Corporate
planning
Corporate
strategy
Quest for
competitive
advantage
Financial control
Planning growth
Diversifica- Positioning
ion
Competitive
advantage
Budgeting
project appraisal
Forecasting &
investment
planning
Portfolio
planning.
Synergy
market
share
Resource
analysis.
Case
competences
Emphasis on
financial
management
Rise of
corporate planning
departments
& formal
planning
DiversifiIndustry/market
cation.
selectivity.
Quest for
Active asset
global
management
market share
Analysis of
industry &
competition
Analysis of
industry &
competition
Strategic
innovation
The “New
Economy”
Innovation &
knowledge
Dynamic
sources of
advantage
Knowledge
management
cooperation
Restructuring Virtual orgaBPR.
nization.
Refocusing
Alliances
Outsourcing
Quest for
critical mass
The Turbulent 90s
The Death
of
Communism
Sclerosis in
Japan
International
competition intensifies
Stock Market
Goes Bananas
DJIA 1/1/90: 2,765
31/12/99: 11,425
The Turmoil
in Russia
The End of
Apartheid
Financial
Crisis in Asia
Bloodbath in Rwanda
Advent of the
Internet
Unstable Currencies
Yen/$ from 87 to 148 (1997-98)
The Horror of
Yugoslavia
Volatile Oil
9/1990: $34
12/1998: $10
12/1999: $30
The Basic Framework
Strategy: the Link between the
Firm and its Environment
THE FIRM
Goals &
Values
Resources &
Capabilities
Structure &
Systems
STRATEGY
STRATEGY
THE
INDUSTRY
ENVIRONMENT
Competitors
Customers
Suppliers
Sources of Superior Profitability
INDUSTRY
ATTRACTIVENESS
RATE OF PROFIT
ABOVE THE
COMPETITIVE
LEVEL
How do we
make
money?
Which
businesses
should we be
in?
CORPORATE
STRATEGY
COMPETITIVE
ADVANTAGE
How should
we compete?
BUSINESS
STRATEGY
Strategy Making : Design or Process?
Strategy as Design
Strategy as Process
Planning and
rational choice
Many decision makers
responding to multitude of
external and internal forces
INTENDED
STRATEGY
EMERGENT
STRATEGY
REALIZED STRATEGY
Mintzberg’s Critique of Formal Strategic Planning:
•The fallacy of prediction – the future is unknown
•The fallacy of detachment -- impossible to divorce formulation from
implementation
•The fallacy of formalization --inhibits flexibility, spontaneity,
intuition and learning.
Strategy Making Processes within the
Company: Multiple Roles of Strategy
Strategy as Decision
Support
Improves the quality
of decision making
Strategy as Coordination
and Communication
Creates consistency
and unity
Strategy as Target
Improves performance by setting
high aspirations
The Role of Analysis
• Strategy analysis improves decision processes,
but doesn’t give answers.
• Strategy analysis assists us to identify and
understand the main issues.
• Strategy analysis helps us to manage complexity.
• Strategy analysis can enhance flexibility and
innovation by supporting learning.
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