2. What is a Project?
• Project Defined
–Complex, nonroutine, one-time effort limited by time,
budget, resources, and performance specifications
designed to meet customer needs.
• Major Characteristics of a Project
–Established objective.
–Defined life span with a beginning/end.
–Cross functional/multidisciplinary participation
–Usually involves doing something never done before.
–Specific time, cost, and performance requirements.
• Program vs. Project
1–2
4. The Challenge of Project Management
• The Project Manager
–Manages temporary, non-repetitive activities and
frequently acts independently of the formal
organization.
• Marshals resources for the project.
• Is linked directly to the customer interface.
• Provides direction, coordination, and integration
to the project team.
• Is responsible for performance and success of the project.
–Must induce the right people at the right time to
address the right issues and make the right decisions.
1–4
6. The Strategic Management Process:
An Overview
• Strategic Management
–Requires every project to be clearly linked to strategy.
• Why?
–Provides focus of firm’s future direction.
• Responding to changes in the external environment—
environmental scanning
• Allocating scarce resources of the firm to improve its
competitive position—internal responses to new programs
–Requires strong links among mission, goals, objectives,
strategy, and implementation.
2–6
7. Four Activities of the Strategic
Management Process
• Mission/Vision
• Internal and external environmental scan
(SWOT)
• Set long-range goals and objectives.
• Analyze and formulate strategies to reach
objectives. (SMART)
• Implement strategies through projects
2–7
9. Lost Cost Provider Strategies: Essential Elements
• Make the achievement of meaningful lower costs the key theme.
• Include features and services in program offerings that are only essential
• Find approaches to achieve a cost advantage in ways difficult for rival institutions to
copy or match.
KEYS TO SUCCESS
• Scrutinize each cost-creating activity
• Use knowledge about cost drivers to manage costs downward in each expenditure
category
• Find ways to restructure “value chain” to eliminate nonessential work steps and lowvalue activities and programs
• Work diligently to create a cost-conscious culture
• Aggressively pursue investments in resources and capabilities that promise to drive
costs out of the “value chain”
10. Broad Differentiation Strategies: Essential Elements
•
Incorporate differentiating features that cause customers to prefer one
organization over those of rivals
•
Find ways to differentiate that create value that are not easily matched or
cheaply copied by rivals
•
Keep the cost of achieving differentiation below the higher price that can be
charged
KEYS TO SUCCESS
The most appealing approaches to differentiation are those
That are hardest for rivals to match or imitate
That customers will find most appealing
Best choices to gain a longer-lasting, more profitable competitive edge
Innovation
Technical superiority
Superior Quality and Service
Unique competitive capabilities
11. Best Value: Essential Elements
• Combine a strategic emphasis on low-cost with a strategic emphasis on differentiation
Deliver upscale at a lower cost
Give customers more value for the money
• Deliver superior value by meeting or exceeding expectations
• Be the low-cost provider, good-to-excellent attributes, use cost advantage to underprice
competitors
KEYS TO SUCCESS
Capability to incorporate attractive program features at a lower cost than rivals
Capability to create good-to-excellent quality at a lower cost than rival
Capability to develop programs that delivers good-to-excellent performance at a lower cost
than rivals
Capability to provide attractive services at a lower cost than rivals
12. Focused or Niche Strategy: Essential Elements
• Involve concentrated attention on a narrow piece of the total student market
• Serve niche buyers better than rival institutions
• Choose a market niche where students have distinctive preferences, special
requirements, or unique needs
• Develop unique capabilities to serve needs of target student segment
KEYS TO SUCCESS
Achieve lower costs than rivals in serving a well-defined buyer segment (i.e., a focused
low-cost strategy) or
Offerings appealing to the unique preferences of a well-defined segment (i.e., a focused
differentiation strategy)
14. A Portfolio Management System
• RFP Process
–Gathering projects for review
• Selection Criteria
–Financial models: payback, net present value (NPV)
–Non-financial models: projects of strategic
importance to the firm.
• Multi-Weighted Scoring Models
–Use several weighted selection criteria to evaluate
project proposals.
2–14
15. Multi-Criteria Selection Models
• Checklist Model
– Uses a list of questions to review potential projects
and to determine their acceptance or rejection.
– Fails to answer the relative importance or value of a
potential project and doesn’t to allow for comparison
with other potential projects.
• Multi-Weighted Scoring Model
– Uses several weighted qualitative and/or quantitative
selection criteria to evaluate project proposals.
– Allows for comparison of projects with other potential
projects
2–15
17. Balancing the Portfolio for
Risks and Types of Projects
• Bread-and-butter Projects
– Involve evolutionary improvements
to current products and services.
• Pearls
– Represent revolutionary commercial opportunities
using proven technical advances.
• Oysters
– Involve technological breakthroughs
with high commercial payoffs.
• White Elephants
– Showed promise at one time
but are no longer viable.
2–17
