SAA Figures.ppt

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SAA Figures.ppt

  1. 1. Strategic Analysis and Action (5th edition) Figures Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  2. 2. The Job of the General Manager Setting Direction vision mission values Assessing General Creating Strategy Performance Manager determining the way today and tomorrow forward Implementing Change making it happen Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  3. 3. The Performance Matrix Quadrant 2 Quadrant 1 + complacent desired Organizational Health organization state three years ago tomorrow? today troubled crisis – organization Quadrant 4 Quadrant 3 – + Operating Performance Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  4. 4. Collins and Porras Vision Framework Organizational Vision Guiding Philosophy Tangible Image Mission Purpose Environment Core Beliefs & Values Vivid Description Source: Copyright ©1991, by The Regents of the University of California. Reprinted from the California Management Review, Vol. 34, No. 1. By permission of The Regents. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  5. 5. Business Strategy Components Goals Value Proposition Product Market Core Focus Activities Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  6. 6. Strategic Choice: Product/Market Scope PRODUCT EXISTING NEW EXISTING Market penetration Product development MARKET NEW Market development Diversification Source: Ansoff, I., The New Corporate Strategy. Copyright © 1987, John Wiley & Sons, Inc. Reprinted by permission of John Wiley & Sons, Inc. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  7. 7. The Wal-Mart Business Strategy • Dominate markets • Everyday low prices • Always in stock • Lowest cost system Goals • High growth • Courteous, reliable • Do it Wal-Mart way Value Proposition Product Market Core Focus Activities • Branded general merchandise • Integrated logistics: supplier • Value-oriented customers to checkout • Develop easier markets first: work • Intensely managed from regional hubs • Local tailoring Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  8. 8. Apple’s Strategy • Differentiation on • “Change the world Goals product and service through technology” through a user-friendly graphic interface and integrated products Value Proposition Product Market Core Focus Activities • Complete desktop solution R&D Mnf’g Dist’n • 50% US; 50% foreign • Education (50%MS); home • Fully integrated • Hardware, software, peripherals • High end Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  9. 9. Corporate, Business and Functional Strategy Corporate Strategy Industry A Industry B Industry C Business Business Business Strategy Strategy Strategy A B C Functional/ Functional/ Functional/ Functional/ Functional/ Functional/ Functional/ Functional/ Functional/ Product Product Product Product Product Product Product Product Product Strategy Strategy Strategy Strategy Strategy Strategy Strategy Strategy Strategy Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  10. 10. The Diamond-E Framework Management Preferences Organization Strategy Environment Resources Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  11. 11. Strategic Risks TIME HORIZON SHORT-TERM LONG-TERM Errors in reading the Environmental changes environment cause make the strategy obsolete ENVIRONMENTAL RISKS strategic failure CAPABILITY RISKS Strategic demands exceed Internal capabilities develop the capacity to execute inconsistently with strategy Source: Ansoff, I., The New Corporate Strategy. Copyright © 1987, John Wiley & Sons, Inc. Reprinted by permission of John Wiley & Sons, Inc. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  12. 12. The Strategic Analysis Triangle WANT Management Preferences Individual Strategic Tension CAN NEED Resource Capabilities Environment and Organization Industry Firm Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  13. 13. The Process of Strategic Analysis Activities Step 1: Base Case 1. Assess past performance. Analysis 2. Identify and evaluate current strategy using the Diamond-E Assess the strategic drill. position of the business 3. Forecast future performance under current strategy. and the urgency for action. 4. Decide on the need, nature, and urgency of change. Step 2: Strategy 1. Work from the environment and capabilities to generate new Formulation and Testing proposals. Develop and evaluate 2. Use the Diamond-E drill to shape and short-list proposals. proposals to address 3. Prepare performance forecasts for short-listed proposals. business opportunities and challenges. Step B: Decision and 1. Decide on proposal(s) to implement. Implementation 2. Move to build commitment and develop required Commit, implement, and capabilities. review. 3. Implement. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  14. 14. Porter’s Five Forces Model POTENTIAL ENTRANTS Threat of new entrants INDUSTRY Bargaining power of suppliers COMPETITORS SUPPLIERS BUYERS Rivalry Among Existing Firms Bargaining power of buyers Threat of substitute products or services SUBSTITUTES Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from COMPETITIVE STRATEGY: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980, 1998 by The Free Press. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  15. 15. Prisoner’s Dilemma Matrix FIRM TWO Strategy A Strategy B I: $6,000 I: $10,000 Strategy A II: $6,000 II: $0 FIRM TWO Strategy B I: $0 I: $2,000 II: $10,000 II: $2,000 Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  16. 16. PEST Forces Macro Forces Political Economic Social Technological Micro Forces Supply Competition Demand Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  17. 17. Internalization: Global/Local High Global • Economies of scale • Customers accept standardized products Need for Global Integration Multidomestic • Locally tailored products • Benefits of being local outweigh added costs Low Need for Local Responsiveness High Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster,Inc., from THE MULTINATIONAL MISSION by C.K. Prahalad and Yves L. Doz. Copyright © 1987 by The Free Press. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  18. 18. Internalization: Global/Local Step 1: Focus the Environment Analysis Work from the strategic proposal to define the boundaries of the relevant environment, highlight the questions that need to be asked about demand, supply, competition, and GENERATE government. Establish a time horizon for analysis. NEW STRATEGIC PROPOSAL(S) Step 2: Test the Strategy-Environment Linkage How well does the strategic proposal anticipate the opportunities and challenges in demand, supply, Recycle competition, and government? For serious misfits, recycle to develop a more attractive proposal. Step 3: Forecast Performance Decide if the strategic proposal, implemented as planned, Recycle will meet its goals. For clearly failing proposals, recycle to develop a more attractive proposal. Step 4: Rank Against Other Proposals Consider the strategic proposal in the light of alternative proposals. If it is competitive, proceed with the Diamond-E Recycle drill. If not, consider dropping it and recycle to develop a more attractive proposal. Step 5: Move to Next Step in Diamond-E Drill Assess the strategy-resource linkage. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  19. 19. Testing the Strategy-Environment Linkage Business Environment Analysis Model (BEAM) E.G., • Industry support programs Government E.G., • Economic and trade policy • Customer needs and • Regulation of structure and performance conduct • Market growth • Buyer bargaining power How well does the Supply strategy Demand anticipate... E.G., • Advances in product, process technology • Supplier competence and E.G., bargaining power • Aggregate competitive • Competition for raw materials Competition conditions and people • Individual competitor strategies Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  20. 20. Resource Analysis Step 1: Identify Resource Requirements GENERATE Work from the strategic proposal to clarify and project the resources NEW required for implementation and ongoing success. Prepare at a level STRATEGIC of detail that will facilitate analysis and management action. PROPOSAL(S) Step 2: Test the Strategy-Resource Linkage Compare the resource requirements with the counterpart resources in the business or readily available to it. Identify current and Recycle anticipated gaps between the two. For serious misfits, recycle to develop a more attractive proposal. Step 3: Develop Gap-Closing Analysis Assess the feasibility of closing any material gaps. If the costs, chances of success, and consequences of failure are acceptable, Recycle carry the proposal forward. If not, recycle to develop a more attractive proposal. Step 4: Move to Next Step in Diamond-E Drill Assess the strategy-management preference linkage. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  21. 21. The Indirect Role of Management Preferences Direct Management Role Preferences Strategic Environment Choices Indirect Role A management preferences Organization, filter through which the Resources & environment and resources Capabilities are assessed. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  22. 22. Management Preference Analysis Step 1: Identify the Required Management Preferences GENERATE Work from the strategic proposal to develop a list of required NEW management preferences implied by each of the four STRATEGIC elements of strategy. PROPOSAL(S) Step 2: Test the Strategy -Preferences Linkage Compare the required preferences with the observed preferences of influential managers and management groups. Identify current and anticipated gaps between the two. For serious misfits, recycle to develop a more attractive proposal. Step 3: Develop Gap -Closing Analysis Assess the feasibility of closing any material gaps. If the costs, chances of success, and consequences of failure are acceptable, carry the proposal forward. If not, recycle to develop a more attractive proposal. Step 4: Move to Next Step in Diamond-E Drill Assess the strategy-management preference linkage. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  23. 23. Strategy-Organization Analysis Step 1: Identify Required Organizational Capabilities Identify the key organizational capabilities that will be RETURN TO required to successfully implement the strategic proposal. FIRST STEPS OF DIAMOND-E DRILL Step 2: Identify Capability Gap Compare the required organizational capabilities with those currently in the business. Identify the most important Recycle capability gaps. If the gaps are clearly too large to close, reject the proposal and recycle to develop a more attractive one. Step 3: Identify Required Organizational Changes Identify the changes in organization structure, management processes, and leadership behaviour that Recycle would be needed to develop the missing capabilities identified in Step 2. Step 4: Assess Feasibility Assess the probability that the proposed organizational changes will in fact result in the creation of the required Recycle new capabilities, in the time available. Identify the major areas of risk. Step 5: Move to Next Step in Diamond-E Drill Decide which of the strategic proposals you have been examining to adopt, based on an analysis of risk and expected performance. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  24. 24. Organizational Capabilities Model Leverage Point Leverage Point Leadership Organization Behaviour Structure Culture Behaviour Organizational Capabilities Behaviour Behaviour Culture Culture Leverage Point Management Processes Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  25. 25. Basic Organization Structure (Partial) Functional Organization Product Organization General CEO Manager Human Human Finance Finance Resources Resources Editorial Production Marketing Books Magazines Newspapers Books Editorial etc. etc. etc. etc. Magazines Production Newspapers Marketing Geographic Organization Matrix Organization CEO CEO North North Europe Asia Europe Asia America America Books Books etc. etc. Magazines Magazines two boss etc. Newspapers Newspapers managers Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  26. 26. Intended and Emergent Strategy Unrealized Strategy Realized Strategy Intended Strategy Emergent Strategy Source: Mintzberg, H.; Ahlstrand, B.; Lampel, J.;Strategy Safari, New York: The Free Press, 1998. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  27. 27. Creating a Change Plan Change Agenda What change needs have you identified in your Diamond-E analysis? Analysis of Starting Conditions Urgency Organizational Readiness Personal Readiness Are you dealing with Who will be most affected by the How ready are you to anticipatory, reactive, or proposed change? lead the change crisis change? How ready are they? process? Establishing Guidelines for Action Priority Objective Priority Targets and Actions Leadership Style Pace What do you need Who are your priorty targets? How are you going How fast do to accomplish What will your first steps be? to manage the you need to first? change process? move? Creating an Action Plan Period 1, etc. Objectives Targets First Steps Style Timing 1. …………. ……….. ……………. …………….. …………….. 2. …………. ……….. ……………. …………….. …………….. Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  28. 28. Urgency for Action: The Crisis Curve Anticipatory Reactive Good Change Change Strategic Performance Crisis Change Poor Time Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  29. 29. Readiness for Change and Strategic Capability Readiness for Change Anticipatory Reactive Good Change Change Strategic Performance Crisis Change Strategic Poor Capability Time Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada
  30. 30. Assessing Potential Priority Targets Proactive Change Resistors Agents Bystanders Defensive Change Resistors Agents in Waiting Actively Strongly Neutral Opposed Supportive Commitment to Proposed Change Strategic Analysis and Action (5th edition) © 2002 Pearson Education Canada

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