STRATEGIC DRIFT<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
04/11/2010<br />2<br />STRATEGIC DRIFT<br /><ul><li>Strategic drift:</li></ul>A tendency in severalindustry: to base their...
understandopportunities and problems
revealstrategic issues or challenges
 But    itis not alwayseasy to change at the same time as the theenvironment</li></ul>Introduction<br />IncrementalChange...
04/11/2010<br />STRATEGIC DRIFT<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />Transformation...
04/11/2010<br />4<br />STRATEGIC DRIFT<br />A long period of continuity<br />Introduction<br />IncrementalChange<br />Stra...
 Enlarges stores and geographical coverage;
 but doesn’t deviate from the business model</li></ul>Berchot - Demarque - Doncieux - Durand - Piva<br />
04/11/2010<br />5<br />STRATEGIC DRIFT<br />Whycompaniesmeetincremental changes ?<br />Introduction<br />IncrementalChange...
04/11/2010<br />6<br />STRATEGIC DRIFT<br />Strategy doesn’t fit with the environment<br />Introduction<br />IncrementalCh...
04/11/2010<br />7<br />STRATEGIC DRIFT<br />Example<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux...
Widerrangesofgoods (non-food)
Distributionlogistics</li></ul>Itsstrategywasnotkeeping pace with competitor’s changes<br />Berchot - Demarque - Doncieux ...
04/11/2010<br />8<br />STRATEGIC DRIFT<br />Five reasons for strategic drift<br />Introduction<br />IncrementalChange<br /...
Building on the familiar: managerstryto minimise the extenttowhitchthey are facedwithuncertaintybylookingforanswersthat ar...
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Stategic Drift

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Stategic Drift

  1. 1. STRATEGIC DRIFT<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  2. 2. 04/11/2010<br />2<br />STRATEGIC DRIFT<br /><ul><li>Strategic drift:</li></ul>A tendency in severalindustry: to base theirdevelopment on cultural and historical influences and on theirpast and foundations.<br /><ul><li>Advantages:
  3. 3. understandopportunities and problems
  4. 4. revealstrategic issues or challenges
  5. 5. But  itis not alwayseasy to change at the same time as the theenvironment</li></ul>Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  6. 6. 04/11/2010<br />STRATEGIC DRIFT<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br />Berchot - Demarque - Doncieux - Durand - Piva<br />3<br />
  7. 7. 04/11/2010<br />4<br />STRATEGIC DRIFT<br />A long period of continuity<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br /><ul><li> Gradually extends product lines;
  8. 8. Enlarges stores and geographical coverage;
  9. 9. but doesn’t deviate from the business model</li></ul>Berchot - Demarque - Doncieux - Durand - Piva<br />
  10. 10. 04/11/2010<br />5<br />STRATEGIC DRIFT<br />Whycompaniesmeetincremental changes ?<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  11. 11. 04/11/2010<br />6<br />STRATEGIC DRIFT<br />Strategy doesn’t fit with the environment<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br />Whilstanorganization’s strategycontinuestochangeincrementally, the environmentalchangeaccelerates<br />Organizationdoesn’t change in linewith the environment<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  12. 12. 04/11/2010<br />7<br />STRATEGIC DRIFT<br />Example<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br /><ul><li>Growthoflargersizestores,
  13. 13. Widerrangesofgoods (non-food)
  14. 14. Distributionlogistics</li></ul>Itsstrategywasnotkeeping pace with competitor’s changes<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  15. 15. 04/11/2010<br />8<br />STRATEGIC DRIFT<br />Five reasons for strategic drift<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br /><ul><li>The problemofhindsight: itmaybe easy tosee major changeswithhindsight, butitmaynotbe so easy toseetheirsignificanceasthey are happening
  16. 16. Building on the familiar: managerstryto minimise the extenttowhitchthey are facedwithuncertaintybylookingforanswersthat are familiar(es: Sainsbury’s and customers’ loyalty)</li></ul>Berchot - Demarque - Doncieux - Durand - Piva<br />
  17. 17. 04/11/2010<br />9<br />STRATEGIC DRIFT<br />Five reasons for strategic drift<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br /><ul><li>Core rigidities: the core capabilities may become a limit. The formula of success is hard to imitate by competitors but it may provoque a routine, making the habits of the business hard to question.
  18. 18. Relationships become shackles: The success of a company is based on an excellent relationship between customers, suppliers and employees.</li></ul>Berchot - Demarque - Doncieux - Durand - Piva<br />
  19. 19. 04/11/2010<br />10<br />STRATEGIC DRIFT<br />Five reasons for strategic drift<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br /><ul><li>Lagged performance effects: first symptoms of strategic drift are hard to identify. For example, the effects of low performances on financial results may be long to appear. However, once the shortcoming of a business are identified, it becomes an opportunity for competitors.
  20. 20. Icarus paradox </li></ul>Berchot - Demarque - Doncieux - Durand - Piva<br />
  21. 21. 04/11/2010<br />11<br />STRATEGIC DRIFT<br />Pressure and changes inside the company<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br /><ul><li>Shareholders-> Top executives managers -> makingwrongstrategic moves
  22. 22. Rivalryinside the company on the strategicturns(historicalreasons)
  23. 23. Consequences ?</li></ul>- Deteriotation of confidence inside the organization<br />- Descrease of the value of the company<br />- Difficulty in terms of HR<br />- Loss of customersloyalty<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  24. 24. 04/11/2010<br />12<br />STRATEGIC DRIFT<br />Examples<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br />Succession of CEO during the late 90’s, and somedecisionsled the company to financialunstability as well as marketsharelost.<br />One strategicdecisionhad a terrible consequence : intermediaries are upset, and the brand isboycot.<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  25. 25. 04/11/2010<br />13<br />STRATEGIC DRIFT<br />The end of the strategic drift<br />Afterthisperiod of flux, 3 possibilities:<br />Introduction<br />IncrementalChange<br />StrategicDrift<br />Flux<br />TransformationalChange or Death<br />Conclusion<br />Berchot - Demarque - Doncieux - Durand - Piva<br />
  26. 26. 05/11/2010<br />14<br />Berchot - Demarque - Doncieux - Durand - Piva<br />STRATEGIC DRIFT<br />Whatistransformational change ?<br /> ≠ fromdevelopment change<br /> ≠ fromtransitionalchange<br /><ul><li>Couldtakedifferentforms: </li></ul>TransformationalChange or Death<br />
  27. 27. 05/11/2010<br />15<br />Berchot - Demarque - Doncieux - Durand - Piva<br />STRATEGIC DRIFT<br />Example : the burden of history<br />TransformationalChange or Death<br />
  28. 28. 05/11/2010<br />16<br />Berchot - Demarque - Doncieux - Durand - Piva<br />STRATEGIC DRIFT<br /><ul><li>Sum up: whatis the strategic drift ?
  29. 29. Link between innovation and strategic drift. Anticipation of the strategic drift ?</li></ul> Our example: APPLE<br />http://www.youtube.com/watch?v=ciUm-6gBC90<br />« The revolution has justbegun »<br />Conclusion<br />

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