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Strategy Development
 

Strategy Development

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A detailed guide to Strategy Development, covering strategy concepts from military strategists (e.g. Sun Tzu's Art of War) to modern day strategy development thought leaders (Mintzberg and Bower). ...

A detailed guide to Strategy Development, covering strategy concepts from military strategists (e.g. Sun Tzu's Art of War) to modern day strategy development thought leaders (Mintzberg and Bower). Breaks down a 3-phase approach to Strategy Development, including hierarchical challenges, activities, and deliverables

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Strategy Development Strategy Development Presentation Transcript

  • PowerPoint Diagram Pack Strategy Development A detailed guide to Strategy Development, covering strategy concepts from military strategists (e.g. Sun Tzu’s Art of War) to modern day strategy development thought leaders (Mintzberg and Bower). Breaks down a 3-phase approach to Strategy Development, including hierarchical challenges, activities, and deliverables.
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    Guidelines degrees of freedom Shareholder and stakeholder requirements Selection and targets of KPIs 1 Set the Objectives Define the Core Competencies Define the Battlefields Strategic Intent Competitors ambition, posi- tion and capabilities Potential Market posi- tions and Value propositions Market- attractiveness (relative to objective!) Protectability and ubiquity of competencies Company’s strengths and weaknesses Competencies required to deliver value proposition
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  • Contents
    • Strategy Overview 4
    • Lessons from Military Strategists 7
    • Strategy Development Fundamentals 11
      • Approaches to Strategy Development
      • Evolution
      • Thinking Today
    • Elements of Strategy Development 18
      • Strategic Challenges
      • Strategic Intent
      • Execution Design
      • Initiatives
    • Strategy Development Approach 26
      • Strategy Hierarchies and Related Challenges
      • Activities & Deliverables
  • Remember, the end goal of your strategy is to win—but there is more to strategy than just winning
    • Primary Objectives of Strategy
    Strategy 2 Strategy is about winning competitive advantage 1 Strategy is about value creation value proposition 3 Strategy is about selectivity and focus resource allocation 4 Strategy is about speed and flexibility business transformation OBJECTIVE TRANSLATION THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Military strategists have been at the forefront of strategy development, shaping strategic thinking 1 of modern business organizations
    • Lessons from Military Strategists – Overview
    MAJOR IDEAS Sun Tzu 2 (~400 B.C.)
    • Winning without fighting is the acme of skill…
    • Know and attack the enemy’s strategy…
    Indirect strategies Carl von Clausewitz 4 (“Romantic”) (1780 – 1831)
    • Primacy of the offensive [Jena 1806]: focus forces to decide a war on the main battlefield
    • Supremacy of the defensive [Moskau 1812], paradox of offensive strategies [Waterloo 1815]: “not only are obstacles annihilated but the [offensive] machine itself”
    Strategic paradox, adaptive strategies 1: Strategy from a military perspective usually does not include the process and definition of (political) objectives but the way to achieve those objectives 2: Sun Tzu, the art of war“, translated and with an introduction by Samuel B. Griffith; Oxford University Press, 1963 3: Strategisches Denken; Prof. Dr. Albert Stahel 4: Clausewitz und Napoleon, Jena, Moskau, Waterloo; Andreas Herberg-Rothe; Internationales Clausewitz-Zentrum, Führungsakademie der Bundeswehr 5: Colonel Peter Faber, USAF [John Boyd is considered one of the most important military strategists for the U.S.A. until recently]; based on his ideas recent thinking changes towards Swarm tactics, Network Centric Warfare, etc. Antoine-Henri Jomini 3 (“Rationalist”) (1779 – 1869)
    • Mobility and superiority: Resources have to be mobile to attack the enemy’s major strongholds with superior forces successively and alternatively
    Strategic focus MILITARY STRATEGIST STRATEGY Strategy as acting and thinking, indirect strategies John Boyd 5 (1927 – 1997)
    • Decision cycle dominance “manage others’ perceptions by more effective observing, orienting, deciding and acting,” emphasize implicit over explicit
    • Fast transition between operational states, disrupt or incapacitate adversary’s ability to cope with change
    THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Sun Tzu’s concept of five fundamental factors in military strategy does significantly incorporate elements of today’s business strategy concepts
    • Lessons from Military Strategists – Sun Tzu, The Art of War (1 of 2)
    (Law, method) – doctrine, i.e.: organization, control, assignment of officers, provision of principle items used by the army 1: Sun Tzu: „The art of war“, translated and with an introduction by Samuel B. Griffith; Oxford University Press, 1963 … could translate into terms of business strategy as … … Sun Tzu’s five fundamental factors in military strategy 1 … … following the right purpose and objective – balancing the interest of all stakeholders (Moral influence) – the right way of a government (benevolent, just and righteous) … exogenous forces/ changes in the environment to be considered (PEST, market trends, etc.) … markets, industry structures, market positions (value propositions) and competitive forces … top management leadership qualities … organizational principles, management and resource allocation process (Heaven/ weather) – interaction, effects of natural forces (winter‘s cold/ summer‘s heat) (Terrain) – geographical structures, pre-requisites; chances/risks provided by battlefield (Command) – general‘s wisdom, sincerity, benevolence, courage and strictness THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • In reality, you will find varying approaches towards strategy development, depending on the complexity of the strategic challenge
    • Approaches to Strategic Challenge
    Easy Complex 1 1: Complexity being defined as a function of the number of influencing variables and the velocity of their change Thinking First Seeing First Acting First
    • Define problem
    • Diagnose
    • Design options
    • Decide
    • Prepare
    • Incubate
    • Get enlightenment
    • Verify
    • Trial and error
    NATURE OF STRATEGIC CHALLENGE THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Since the 50s, the focus of strategic development in the corporate world has evolved through five distinct phases
    • Strategy Development – Evolution
    Key themes “ Meet the budget” “ Forecast the future” “ Think strategically to beat competition” “ Strategy as positioning” Effective-ness of strategy “ Integrate strategic planning and implementation” Key people Kenneth Andrew, John MacLean, Edith Penrose Kenneth Andrew, Igor Ansoff, BCG, Alfred Chandler BCG Michael E. Porter, Henry Mintzberg Gary Hamel, C.K. Prahalad, Henry Mintzberg, Bower & Gilbert Financial Planning Long-term planning Strategic Planning Strategic Management 50’s 60’s 70’s 90’s - now 80’s Strategy renewal Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Key concepts Financial control, budget planning Growth planning, resource allocation, SWOT, Ansoff Matrix Alternative strategies, Portfolio analysis, BCG-Matrix Core competen-cies, strategy plan-ning & Execution; Balanced Score-card Strategic proces-ses, market-based strategy, Porter 5 Forces, Value Chain THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Today, there are two primary schools of thought—Mintzberg’s configurational school and Bower’s RAP-based strategy
    • Strategy Development – Thinking Today
    • Bottom up strategy development:
      • Crafting of strategy as real time iterative process
      • Context dependent, evolving decision making in an organization
      • Uncertainty about decisions strategic consequences
      • Structure of resource allocation shapes strategy
    • Organizational configuration:
      • Strategic management to sustain stability
      • rise of a particular set of strategies
      • organization engages in behaviours based on adoption to contexts
      • (relative) stability of an organizations‘ configuration
    MINTZBERG: CONFIGURATIONAL SCHOOL BOWER: RAP SCHOOL
    • Transformation:
      • strategic management as ability to recognize need for and manage transformation
      • Quantum leap to another configuration
      • disruptive process
    • Top down intervention:
      • Centralized strategic leadership
      • Concentrated strategic decisions at top
      • Driven by revised strategic intent formulated at the top
      • Constraint strategy-making process
    Note: RAP = Resource Allocation Process Organizational / Bottoms-up Driven Strategy Development Intent / Top-down Driven Strategy Development THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Bower’s concept puts the mechanisms of the strategic planning and budgeting process at the heart of strategy development
    • Strategy Development – Resource Allocation Process
    Realized strategy Resource allocation bottom-up stra-tegy planning and budgeting Definition Selection
    • Strategic intent:
      • perceived and communicated “official” strategy
    • Organizational context:
      • Governance and organizational structure (power system)
      • Performance measures and rewards
      • Managers’ beliefs and cognitive frames
    • Market context:
      • Demands of existing customers (major sources of revenue)
      • Technological development
    • Capital market context:
      • Demands and influence of capital providers
    • Resource allocation/ Strategy planning and budgeting:
      • bottom-up driven identification and selection of business opportunities
    1: based on Bower, J.L.; Gilbert, C.G.: “From resource allocation to strategy”; OXFORD university press, 2005 RAP-FRAMEWORK FOR STRATEGY DEVELOPMENT 1 EXPLANATION Strategic intent Organi-zational context THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Projects and Initiatives Operating System Market context Capital market context
  • However, occasionally top-down intervention is required
    • Strategy Development – Top-down Opportunities
    • Organization will not promote and fund initiatives that:
      • are of high uncertainty
      • are alien to a company‘s contexts
      • require high commitment with long-term pay-offs
      • are dysfunctional regarding existing power system
    IMPLICATION BOTTOM-UP BIAS
    • Organizational bias:
      • strengthen existing capabilities
      • reward single BUs for short- term results
      • conservative and risk averse
    • Market bias:
      • fit existing customers
      • fit established view on technology
    • Capital market bias:
      • favour expected, predictable behaviour
      • provide short term results
    TOP-DOWN INTERVENTION OPPORTUNITIES
    • Disruptive innovations
    • Converging markets
    • Turbulent new and/ or international markets
    • Disinvestment opportunities
    Signals for the need of top-down intervention may also be derived from scanning the budgeting process for proposals with pending decisions or high commitment proposals. THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Based on Mintzberg and Bower’s insights, we derive three different types of strategic challenges for our clients
    • Strategic Challenges
    STRATEGY DEVELOPMENT CHALLENGES 3. Ambiguity , clarify nature of challenge and approach to it 2. Align execution context to materialize intent into realized strategy 1. Design top down intervention driven by revised strategic intent THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
    • Framing the type of the strategic challenge one of the most critical tasks in strategy development
    • Prerequisite to define the strategy development approach
  • Defining a strategic intent means to set objectives, define relevant battlefields, and define the required core competences
    • Strategic Intent
    What is the strategic intent the company should follow? CONSTITUTIVE ELEMENTS OF STRATEGIC INTENT
    • Purpose, mission and priorities of the company?
    • Battlefields relevant to achieve objectives ?
    • Critical success factors to achieve victory on these battlefields?
    • Competencies and resources needed to fulfil CSFs?
    • Sources for sustainability of victory?
    KEY QUESTIONS THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Set the Objectives Define the Core Competencies Define the Battlefields Intent Set the Objectives Define the Battlefields Define the Core Competencies
  • Defining a strategic intent means analyzing and defining each element carefully and finding the best possible combination of all elements
    • Elements of Strategic Intent
    Set the Objectives Define the Core Competencies Define the Battlefields Intent 1: KPI = Key performance indicators THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Guidelines degrees of freedom Shareholder and stakeholder requirements Selection and targets of KPIs 1 Competitors ambition, posi- tion and capabilities Potential Market posi- tions and Value propositions Market- attractiveness (relative to objective!) Protectability and ubiquity of competencies Company’s strengths and weaknesses Competencies required to deliver value proposition
  • The first step is to understand the nature and context of the strategic challenge
    • Strategy Hierarchies and Related Challenges
    Set the Objectives Define the Core Competencies Define the Battlefields Intent Shape Strategy Planning & budgeting Manage Strategic initiatives Design Organizational context Execution Ambiguity Corporate Corporate Business A Business A Business B Business B Business … Business … Business A Business A Business B Business B Business … Business … HR HR Fin Fin Mktg Mktg R&D/ Mfg. R&D/ Mfg. IT IT … … HR HR Fin Fin Mktg Mktg R&D/ Mfg. R&D/ Mfg. IT IT … … THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Functional Level Division/ Business Unit Corporate Execution Design Ambiguity Strategic Intent
  • Each hierarchical level has specific strategic challenges in defining a strategic intent …
    • Strategy Hierarchies and Related Challenges – Strategic Intent
    TYPICAL STRATEGIC CHALLENGES
    • Fit and balance requirements of capital markets and other stakeholders
    • Business portfolio management and decisions
    • Create value in corporate portfolio, match corporate requirements and market requirements
    • Competitive strategy, market positioning and USP generation
    • Product/market strategies, Channel Strategies
    • Proof strategic relevance
    • Contribute to corporate/BU strategy
    • Provide sources of sustainable competitive advantages
    1 2 3 1 2 3 THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Functional Level Division/ Business Unit Corporate Execution Design Ambiguity Strategic Intent
  • A strategy development project has three phases
    • Strategy Development Approach – Overview
    Set strategic guidelines
      • Define strategic intent
      • Execution Design
    Intent Objectives Core Compe- tencies Battle- fields Execution Strategy Planning & budgeting Organi- zational context Strategic Initiatives Significance of strategy Significance of execution design 1 2 3 THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • In the initial phase, all levels are of the organization are involved, but as we progress, we drill down to a specific Business Unit
    • Strategy Development Approach – Hierarchical Involvement Breakdown
    Corporate Business Unit/ Functions Business Unit Working session Working session Final strategy & multilevel commitment Options 1st WS 2nd WS Kick off 1st WS 2nd WS Kick off Set strategic guidelines Define strategic intent
      • Execution Design
    1 2 3 THIS IS A PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • END OF PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
  • Browse our catalog of PowerPoint Diagram Packs http://learnppt.com/powerpoint Join our mailing list and receive the Basic Toolkit for free ! http://learnppt.com/mailinglist Read our eBook – How to Become a PowerPoint Guru http://learnppt.com/