What is Strategy
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What is Strategy

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What is Strategy

What is Strategy

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What is Strategy What is Strategy Presentation Transcript

  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Introduction to Strategy What Is It & How Does It Work?
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED In November of 2006, Yahoo! Manager Brad Garlinghouse issued a memo – known as “The Peanut Butter Manifesto” – that directly challenged the senior management with not having a strategic vision.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED At Yahoo!, growth had slowed. Google had overtaken them in online advertising revenues and the share price had fallen by over 30% since the start of the year.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED According to Garlinghouse, Yahoo! was spread too thin – like peanut butter – and it was time for strategic change.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Now, all organizations are faced with challenges when it comes to strategic change – some from a desire to grab new opportunities other to overcome significant problems, as Yahoo! had
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Before we can talk about what strategy is, we have to understand what strategic decisions are and what types of problems they can potentially cause…
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategic decisions are about: The long term direction of an organization and the scope of its activities
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategic decisions are about: Gaining advantage over competitors and address changes in the business environment
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategic decisions are about: Building resources and competences (capabilities) and achieving the values and expectations of stakeholders
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategic decisions are extremely important to an organization’s growth and future!
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED As a result, they are likely to: Be complex and made in situations of uncertainty with its overall effect being operational decision making
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED As a result, they are likely to: Require an integrated approach – internally and externally – and involve considerable change
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED But then if you don’t have a strategy, everything is hodgepodge.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategy & Strategic Management The Difference
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The words strategy and strategic decisions are typically associated with issues like:
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The long-term direction of an organization. In the Yahoo! example, Garlinghouse explicitly recognized that strategic change would require a “marathon not sprint” mentality
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The scope of the organization’s activities Should the organization concentrate on one area of activity or should it have many? Garlinghouse believed that Yahoo! Was spread too thinly over too many different activities
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Advantage for the organization over competition The problem at Yahoo! was that it was losing its advantage to faster-growing companies such as Google.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Advantage can be achieved in different ways and mean different things to different people – so make sure that you understand what it means to your industry
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED A strategic fit with the business environment Organizations need appropriate positioning in their environment to meet clearly defined market needs
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED This might mean a small business looking for its niche in the market or a MNC seeking to buy up businesses that have already found their position. Garlinghouse felt that Yahoo! was trying to succeed in too many environments.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Maximize the organization’s resources and competences Strategy is about exploiting the strategic capability of an organization to provide competitive advantage and/or yield new opportunities
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The values and expectations of powerful actors in and around the organization Individuals, groups an even other organizations can drive fundamental issues such as expansion or consolidation, or where the boundaries are drawn for the organization’s activities.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED At Yahoo!, managers may have pursued growth in too many directions and been too reluctant to hold themselves accountable. But lower-level managers, ordinary employees, suppliers, customers and Internet users all have a stake in the future of Yahoo! too.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The beliefs and values of these stakeholders will have a greater or lesser influence on the strategy development of an organization depending on the power they hold
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED So the most basic definition of strategy: The long-term direction of an organization
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED But, with all of these characteristics, we can develop a clearer, fuller definition…
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategy is the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its resources and competencies with the aim of fulfilling stakeholder expectations.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Complexity is a defining feature of strategy and strategic decisions no matter whether you are a MNC or a small business
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED What are some of the complexities?
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Uncertainty is inherent in strategy because nobody can be sure about what the future holds
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Operational decisions are linked to strategy. Any attempt to coordinate Yahoo!’s business units more closely will have a knock-on effects on web designers, links, career, development and advertiser relationships
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED This link is important for 2 reasons: If the operational aspects are not in line with the strategy, then no matter how well consider the strategy, it will not succeed
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED This link is important for 2 reasons: It is at the operational level that real strategic advantage can be achieved
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Integration is required for effective strategy Manager must follow cross functional and operational boundaries to deal with strategic problems and come to agreements with other managers who have different interests and priorities
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Relationships and networks outside the organization are important in strategy
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Change is a typically crucial component of strategy, which is often difficult because of the resources and organizational change
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED According to Garlinghouse, Yahoo!’s barriers to change seemed to include a top management that is afraid to take hard decisions and a lack of clear accountability amongst lower-level management.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Three Levels of Stratgy
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategies exist at multiple levels in an organization. Each level can have an independent strategy or certain levels can be working from one strategy.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED There are three (3) distinct levels of strategy that we need to understand…
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Level 1 – Corporate Level Strategy Corporate level strategy is concerned with the overall scope of an organization and how value will be added to the different parts (business units) of the organization.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLEDHTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Corporate Level Strategy Influencers  Geographical coverage  Diversity of products/service or business units  How resources are allocated between different parts of the organization
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Corporate Level Strategy is concerned with the expectations of the owners, shareholders and stock market; and usually takes the form of a “Mission Statement”
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Corporate Level Strategy is important because it determines the range of business to include in other strategic decisions
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Level 2 – Business Level Strategy Business Level Strategy is about how the various businesses included in the corporate strategy should compete in their particular markets.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Business Level Strategy is sometimes called Competitive Strategy
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLEDHTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Business Level Strategy Influencers  Decisions about how units should provide best value services  Pricing Strategy  Innovation and differentiation
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED So Corporate Level Strategy involves decisions about the organization as a whole, while Business Level Strategy relates to strategic business units (SBUs) within the overall organization
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED What is a Strategic Business Unit?
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED An SBU is a part of an organization for which there is a distinct external market for goods and services that is different from another SBU.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED In Yahoo!’s case, the SBUs would be Yahoo! Photos and Yahoo! Music, for example.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Now, you may be thinking that is a huge organization, what about small businesses?
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Small and Medium sized Enterprises (SMEs) also have corporate and business level strategies, but there is a greater similarity within them.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The Corporate Level Strategy provides the framework for whether and under what conditions other business opportunities might be added or rejected.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED One thing to keep in mind – the corporate strategy should support the SBUs, but the SBUs have to make sure their Business Level Strategies do not damage the corporate or other SBUs in the group.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Level 3 – Operational Strategy Operational strategies are concerned with how the component parts of an organization deliver effectively the corporate- and the business-level strategies in terms of resources, processes and people.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED In most businesses, successful strategies depend on the decisions that are taken, or activities that occur, at the operational level – making these strategies extremely important.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The Vocabulary of Strategy Knowing the Terminology
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED There are 8 terms that you will see in association with any strategy-related discussion.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED These terms provide a framework for anyone discussing or learning about strategy, thus we will add them to your vocabulary.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Mission A general expression of the overall purpose of the organization which is in line with the values and expectations of major stakeholders and concerned with the scope and boundaries of the organization.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The easy way to remember the Mission is “What business are we in?”
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Vision or Strategic Intent The desired future state of the organization. It is an aspiration around which a strategist might seek to focus the attention and energies of members of the organization.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Goal The general aim in line with the Mission. Can be qualitative.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Objective A more precise aim in line with the goal. Is usually quantified.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategic Capability Concerned with the resources and competences that an organization can use to provide value to customers or clients.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Business Model Describes the structure of product, service and information flows and the roles of the participating parties
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED A traditional model for manufacturing is a linear flow of products from component to product to distributor to retailer to consumer. Information may flow directly between the product manufacturer and the final consumer.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategic Control Monitoring the extent to which the strategy is achieving the objectives and suggesting corrective action (or a reconsideration of the objectives)
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED So What Did We Learn?
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategy is relevant to a wide range of contexts.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED A small entrepreneurial start-up will need a strategy statement to persuade investors and lenders of its viability.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Public sector organizations need strategy statements not only to know what to do, but also to reassure their funders and regulators that what they do is what they should be doing.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Voluntary organizations need to communicate exciting strategies in order to inspire volunteers and donors.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED SBU managers need to propose clear strategies that are consistent with the objectives of their corporate owners and with the needs of other SBUs within the corporate whole.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Privately-held organizations need persuasive strategy statements to motivate their employees and to build long-term relationships with their key customers and suppliers.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED Strategy is everywhere in business, even when we don’t see or understand it. It serves a number of purposes to drive organizations forward.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED The study and understanding of strategy is critical to being successful in business because understanding it makes you look at factors that are internal and external to your own control, planning for the impact they could have on your organization.
  • HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED