2 - Corporate Strategy 2012

7/28/2019 2 - Corporate Strategy 2012

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LEARN. PERFORM. GROW.

2. Introducing Strategy (II)

Corporate StrategyMaster Degree

The Faculty of International Business and Economics,

ASE Bucharest


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1. The General Strategy Process

2. Strategic Management

3. Evolution of Strategic Approach

4. 2 Main Types of Strategic Approach

AGENDA for Today



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What is the Strategy Process?

The Five Phases of Strategy

Phase One

Strategic

Intel l igence

Gathering

and

Analys is

Phase Two

StrategyFormulat ion

PhaseThreeStrategy

Implementa

t ion

Planning

Phase Four

Strategy

Implementa

t ion

Phase FiveStrategy

Moni tor ing

and

Updat ing

(source: Kepner-Tregoe, Inc)


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The Outputs ofPhase 1:Strategic Intelligence Gathering and Analysis


Phase One

Strategic

Intel l igence

Gathering

and

Analys is

Phase Two


PhaseThreeStrategy

Implementa

t ion

Planning

Phase Four

Strategy

Implementa

t ion

Phase FiveStrategy

Moni tor ingand

Updat ing

Yourassumptions about the external business environment

An assessment of your strategic situation, externally and internally

A set ofBasic Beliefs that guide your strategic and operational decision-

making


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The Outputs ofPhase 2:Strategy Formulation


Yourspecific decisions regarding:

Product/service definition andemphasis

Market definition and emphasis

Sources of growth

Competitive advantages

Supporting infrastructure

Metrics

Critical issues

Phase One

Strategic

Intel l igence

Gathering

and

Analys is

Phase Two


PhaseThreeStrategy

Implementat ion

Planning

Phase Four

Strategy

Implementa

t ion

Phase FiveStrategy

Moni tor ingand

Updat ing


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The Outputs ofPhase 3:Strategy Implementation Planning


Phase One

Strategic

Intel l igence

Gathering

and

Analys is

Phase Two


PhaseThreeStrategy

Implementat ion

Planning

Phase Four

Strategy

Implementa

t ion

Phase FiveStrategy

Moni tor ingand

Updat ing

A Strategic Master Project Plan that contains all of the initiatives that

need to be launched or continued to implement the strategy:> Initiative

> Executive Sponsor

> Start date

> Completion date


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The Outputs ofPhase 4:Strategy Implementation


Phase One

Strategic

Intel l igence

Gathering

and

Analys is

Phase Two


PhaseThreeStrategy

Implementa

t ion

Planning

Phase Four

Strategy

Implementa

t ion

Phase FiveStrategy

Moni tor ingand

Updat ing

A strategy that has taken root

> Guiding decisions

> Motivating to all stakeholders

> Winning in the marketplace

Execution

> On time

> On budget


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The Outputs ofPhase 5:Strategy Monitoring and Updating


Phase One

Strategic

Intel l igence

Gatheringand

Analys is

Phase Two


PhaseThreeStrategy

Implementat ion

Planning

Phase Four

Strategy

Implementat ion

Phase FiveStrategy

Moni tor ingand

Updat ing

A strategy that reflects the current reality of:

> The marketplace

> The competitive landscape

> The economic and regulatory environment

> Technology

A set ofassumptions that reflects your best

current thinking

A strategy that continues

to be a winner

Two triggers for a strategy

update:1) Passage of time

2) A significant change in

the internal or external

environment


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Assessment


Phase One

Strategic

Intel l igence

Gatheringand

Analys is

Phase Two


PhaseThreeStrategy

Implementat ion

Planning

Phase Four

Strategy

Implementat ion

Phase FiveStrategy

Monitor ing

andUpdat ing

On a scale from 1 to 10, how would you rate yourorganizations strategy and itsimplementation?

10: We are world-class

9: This is a formidable competitive advantage for us

8: This is one of our strengths, but we have room for improvement

5: We are average in our industry

2: This is one of our significant weaknesses

1: This is a crippling competitive disadvantage for us

0: We dont have a strategy as it has been defined today

What questions do you have?


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1. The General Strategy Proc ess

2. Strategic Management



AGENDA for Today



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Strategic Management

Includes understanding the strategic position of an

organization, strategic choices for the future and turning

strategy into action


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2. Strategic Managemen t



AGENDA for Today

Course 2: Introducing Strategy (II)


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Perspectives on Corporate Strategy (I)

Perspective 1. Concept of

Corporate Strategy

2. Organization

Structure

Representative

author(s)

Ansoff 1965

Andrews 1971

Chandler 1962

Bower 1970Vancil 1978

CONCERN General management role Organization structure

CONTRIBUTION Early statement of corporate

and competitive strategy

Structure follows

strategy, fit,decentralization

OUTPUT Corporate vision

Distinctive competence

SWOT Analysis

Multidivisional

structure


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Perspectives on Corporate Strategy (II)

Perspective 3. Diversification 4. Portfolio

Planning

Representative

author(s)

Wrigley 1970

Rumelt 1974Montgomerz 1985

Hill 1988

BCG 1968

Haspeshaslagh 1982

CONCERN Extent and mode of

diversification

Resource allocation

CONTRIBUTION Set of business as strategicvariable, sinergy

Portfolio management

OUTPUT Measure of relatedness,

analysis of performance

Grow/share matrix


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Perspectives on Corporate Strategy (III)

Perspective 5. Value-Based Strategy 6. Generic

Corporate

Strategies

Representativeauthor(s) Jensen 1985Schmalensee 1985

Copeland 1990

Rumelt 1991

Porter 1987Goold & Campbell

1987

McKinsey 1989

CONCERN Corporate contribution to SBU

performance

Source of corporate

advantage

CONTRIBUTION Limited evidence of corporate value;

Market for corporate control

Typology of

corporate advantage

OUTPUT Free cash flow

Value-based strategy

Corporate role


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Perspectives on Corporate Strategy (IV)

Perspective 7. Resource-Based View

Representative author(s) Wernerfelt 1984

Dierickx and Cool 1989

Barney 1991

CONCERN Firm idiosyncracy and growth

CONTRIBUTION Tangible and intangible assets and capabilities

OUTPUT Characteristics of valuable resources


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2. Strategic Managemen t

3. Evolut ion o f Strategic A ppro ach


AGENDA for Today



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2 Main Types of Strategic Approach

PRESCRIPTIVE (DESIGN) vs. EMERGENT

Strategic approach -> refers to the 3 main areas of strategic

management

Strategic position Strategic choices (strategy selection)

Strategy into action


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PRESCRIPTIVE strategy

Authors Jauch, Glueck, Argenti

the 3 main areas of strategic management -> CORRELATEDCONSEQUENTLY

Corporate strategy = directed & rational planned process

Where we are? -> Where we want to be? -> new strategies

Final goals defined from the beginning

Key strategic elements defined before the strategy implementation


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EMERGENT strategy

Authors Mintsberg, Cyert, March

the 3 main areas of strategic management -> INDEPENDENT & MIXED

Corporate strategy = clarified step by step, adapted to the people needs,

developed in time

Final goals not clear

Key strategic elements elaborated during implementation


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PRESCRIPTIVE vs. EMERGENT

PRESCRIPTIVE vs. EMERGENT

Common way?

Different way?

Advantages & challenges


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For more information:

Cosmin Jolde

cosmin. jo ldes@achieveglobal . ro

Thank you!


2 - Corporate Strategy 2012

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