Components of Success Clear delineation of individual roles. Alignment of incentives with team goals. Nurturing esprit de corp Tight control. Long-term commitment. Effective propaganda. Inspirational leadership. Commitment and discipline. Charismatic leadership. Team building. Attention to detail. IMPLEMENT- ATION Systematic development of individual stamina and team capabilities Recognized economic and military weaknesses and core political strengths Recognized limited raw talent. Exploited strengths in self-promotion, product development & relationship management RESOURCE APPRAISAL Diagnosis of the physical, psychological and strategic determinants of individual and team performance Intimate knowledge of terrain Understanding U.S. political system. Identified emerging trends in popular culture. Understood key success factors in showbiz UNDER-STANDING THE E NVIRONMENT Winning the Tour de France Reunification of Vietnam under Communist rule. Single-minded quest for stardom. GOALS LANCE ARMSTRONG GIAP & NORTH VIETNAMESE MADONNA
Successful Strategy Long-term, simple and agreed objectives Profound understanding of the competitive environment Objective appraisal of resources What Makes a Successful Strategy? EFFECTIVE IMPLEMENTATION
Strategy is the overall plan for deploying resources to establish a favorable position.
Tactic is a scheme for a specific maneuver.
Characteristics of strategic decisions:
Involve a significant commitment of resources.
Not easily reversible.
The Evolution of Strategic Management DOMINANT THEME 1950s 1960s-early 70s Mid-70s-mid-80s Late 80s –1990s 2000s Budgetary Corporate Positioning Competitive Strategic planning & planning advantage innovation control Financial Planning Selecting Focusing on Reconciling control growth &- sectors/markets. sources of size with diversification Positioning for competitive flexibility & leadership advantage agility Capital Forecasting. Industry analysis Resources & Cooperative budgeting. Corporate Segmentation capabilities. strategy. Financial planning. Experience curve Shareholder Complexity. planning Synergy Portfolio analysis value. Owning E-commerce. standards. — Knowledge Management— Coordination Corporate Diversification. Restructuring. Alliances & & control by planning depts. Global strategies. Reengineering. networks Budgeting created. Rise of Matrix structures Refocusing. Self -organiz systems corporate Outsourcing. ation & virtual planning organization MAIN ISSUES KEY CONCEPTS& TOOLS MANAGE-MENT IMPLIC- ATIONS
The Basic Framework Strategy: the Link between the Firm and its Environment THE FIRM • Goals & Values • Resources & Capabilities • Structure & Systems THE INDUSTRY ENVIRONMENT • Competitors • Customers • Suppliers STRATEGY STRATEGY
Sources of Superior Profitability RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL How do we make money? INDUSTRY ATTRACTIVENESS Which businesses should we be in? COMPETITIVE ADVANTAGE How should we compete? CORPORATE STRATEGY BUSINESS STRATEGY
Strategy Making : Design or Process? Strategy as D esign Planning and rational choice INTENDED STRATEGY M any decision makers responding to multitude of external and internal forces REALIZED STRATEGY EMERGENT STRATEGY Strategy as P rocess
Mintzberg’s Critique o f Formal Strategic Planning:
The fallacy of prediction – the future is unknown
The fallacy of detachment -- impossible to divorce formulation from
The fallacy of formalization --inhibits flexibility, spontaneity,
intuition and learning.
Strategy Making Processes within the Company: Multiple Roles of Strategy Strategy as Decision Support Strategy as Coordination and Communication Strategy as Target Improves the quality of decision making Creates consistency and unity Improves perform- ance by setting high aspirations