The Economist“Nobody really knowswhat strategy is.”Version 3.2 March 20111 © Marc Sniukas
Download this presentationas PowerPoint file.Visit:www.e-junkie.com/sniukasVersion 3.2 March 2011© Marc Sniukas2€ 2.99
What is Strategy?A (very) brief introduction.
Why do we need a strategy?§  Without a strategy, we fill our time with…… what we want, or… what we think the boss wants, ...
Five DefinitionsStrategy as…§  a consciously and purposefully developed plan;§  a ploy to outmaneuver a competitor;§  a...
Mintzberg‘s 10 Schools§  Being unsatisfied with the strategy discussion, Henry Mintzberg, professorat McGill University C...
Mintzberg‘s 10 SchoolsPrescriptive§  Design§  Planning§  PositioningDescriptive§  Configuration§  Cognitive§  Cultur...
Mintzberg‘s 10 Schools : The 3 Prescriptive onesDesign School§  Strategy as a process of conception§  Goal = Achieving t...
Mintzberg‘s 10 Schools : The 3 Prescriptive onesPlanning School§  Strategy as a formal process§  Takes on most of the de...
Mintzberg‘s 10 Schools : The 3 Prescriptive onesPositioningSchool§  Strategy as an analytical process§  Generic position...
Mintzberg‘s 10 Schools : The 7 Descriptives onesConfiguration School§  Strategy as a process of transformation§  Process...
Mintzberg‘s 10 Schools : The 7 Descriptives onesCognitive School§  Strategy as a mental process and creative interpretati...
Mintzberg‘s 10 Schools : The 7 Descriptives onesCultural School§  Strategy as a social process rooted in the company‘s cu...
Mintzberg‘s 10 Schools : The 7 Descriptives onesEntrepreneurial School§  Strategy as a visionary process§  Intuition§  ...
Mintzberg‘s 10 Schools : The 7 Descriptives onesEnvironmental School§  Strategy as a reactive process§  Influenced by th...
Mintzberg‘s 10 Schools : The 7 Descriptives onesLearning School§  Strategy as an emergent process§  Organisational Learn...
Mintzberg‘s 10 Schools : The 7 Descriptives onesPower School§  Strategy as a process of negotiation§  Micro vs Macro, i....
Dimensions of StrategyProcess, Content, ContextVersion 3.2 March 201118 © Marc Sniukas“Strategy: Process, Content, Context...
Strategy ProcessVersion 3.2 March 201119 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Th...
Strategy FormationVersion 3.2 March 201120 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer ...
Realized StrategyStrategy Formation ActivitiesVersion 3.2 March 201121 © Marc Sniukas“Strategy: Process, Content, Context”...
Strategy ContentVersion 3.2 March 201122 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Th...
Strategy ContextVersion 3.2 March 201123 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Th...
Strategic TensionsVersion 3.2 March 201124 © Marc SniukasDimension Topic Tension“Strategy: Process, Content, Context” 3rd ...
Setting StrategyA great strategy has pieces,…but they form a coherentwhole!Version 3.2 March 201125 © Marc Sniukas
“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol....
The five major elements of strategyArenasStagingDifferentiatorsVehiclesEconomic LogicVersion 3.2 March 201127 © Marc Sniuk...
The five major elements of strategyEconomic LogicArenasStagingDifferentiatorsVehiclesWhere will we be active?How will we g...
The five major elements of strategyStrategy is an integrated set of choices.§  Arenas Where will we be active?§  Vehicle...
The five major elements of strategyArenas: Where will we be active?§  With how much emphasis ?§  Which product categorie...
The five major elements of strategyVehicles: How will we get there?§  The means for attaining the needed presence in the ...
The five major elements of strategyDifferentiators: How will we win?§  The reasons that customers will choose us§  Image...
The five major elements of strategyStaging: What will be our speed & sequence of moves?§  Driven by availability of resou...
The five major elements of strategyEconomic Logic: How will we obtain our returns?§  How profits will be generated, above...
The five major elements of strategyEconomic Logic: How will we obtain our returns?§  What generates cash ?§  What decide...
Testing the Quality of YourStrategyVersion 3.2 March 201136 © Marc Sniukas
Some key evaluation criteriaDoes your strategy fit within what’s going on in the environment?Does your strategy exploit yo...
Some key evaluation criteria§  Does your strategy exploit your key resources & capabilities?With your particular mix of r...
Putting strategy in its placeStrategic Analysis§ Industry Analysis§ Customer/marketplace trends§ Customer activity cycl...
What drives competition in the industry?Porter’s Five ForcesSuppliersPotential EntrantsBuyersSubstitutesThe IndustryThreat...
What drives competition in the industry?Porter’s Five ForcesVersion 3.2 March 201141 © Marc Sniukas“Strategy: Process, Con...
Anything else?Version 3.2 March 201142 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thom...
Let’s move from the industry to the business!SuppliersPotential EntrantsBuyersSubstitutesThe IndustryVersion 3.2 March 201...
Industries, Markets and BusinessesVersion 3.2 March 201144 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition...
Business System, Model & the value chain§  A business system is the chain of activities through which a product isdevelop...
What’s your business model?Version 3.2 March 201146 © Marc Sniukas
The Business Model: 9 Building Blocks§  What‘s your value proposition?§  Who are your customers? Which customer segments...
Analyzing your company’svalue chainVersion 3.2 March 201148 © Marc Sniukas
The Activity SystemValue Chain§  An activity system is an integrated set of value creation processes leadingto the supply...
The Activity SystemPrimary and Support ActivitiesPrimaryActivitiesInbound LogisticsOperationsOutbound LogisticsMarketing &...
Implementing StrategiesWhat matters most to Strategy ExecutionBuilding a Strategy-Focused-OrganizationThe Balanced Scoreca...
Putting strategy in its placeStrategic Analysis§ Industry Analysis§ Customer/marketplace trends§ Customer activity cycl...
What matters most to Strategy Execution?Information Decision	  RightsMotivators StructureVersion 3.2 March 2011© Marc Sniu...
What matters most to Strategy Execution? Ranking1.  Everyone has a good idea of the decisions and actions for which he or ...
Aligning & Focusing Resources on StrategyBusiness Units Executive TeamInformationTechnologyBalancedScorecardHumanResources...
The Principles of a Strategy-Focused-OrganizationBalancedScorecardStrategyMobilize Change throughExecutive LeadershipMobil...
Learning &GrowthPerspectiveInternalPerspectiveCustomerPerspectiveFinancialPerspectiveOrganizational CapitalInformation Cap...
Financial PerspectiveLong TermShareholder ValueProductivity StrategyImprove CostStructureIncrease AssetUtilizationExpand R...
Customer PerspectivePriceQualityAvailabilitySelectionFunctionalityBrandPartnershipServiceProduct / Service Attributes Rela...
Customer PerspectivePriceQualityAvailabilitySelectionFunctionalityBrandPartnershipServiceProduct / Service Attributes Rela...
Customer PerspectivePriceQualityAvailabilitySelectionFunctionalityBrandPartnershipServiceProduct / Service Attributes Rela...
Customer PerspectiveVersion 3.2 March 2011Price	  Quality	  Availability	  Selec9on	  Func9onality	  Brand	  Partnership	 ...
Internal PerspectiveThe strategic priorities for various business processes, which create customer and shareholder satisfa...
Strategic Internal ProcessesInternal ProcessStrategyOperationsManagementProcessesCustomerManagementProcessesInnovationProc...
Operations ManagementStrategies for Achieving Operational ExcellenceSupply Production Distribution Risk Mgmt§  Develop su...
Customer ManagementStrategies for Increasing Customer ValueSelection Acquisition Retention Growth§  Understand segments& ...
Customer ManagementStrategies for Increasing Customer Value§  Empower front-line employees withinformation they need§  E...
Innovation ManagementStrategies for Building the FranchiseIdentifyOpportunitiesR&D portfoliomgmtDesign &DevelopmentLaunch§...
Regulatory & SocialStrategies for Being a Good Corporate CitizenEnvironment Safety & Health Employment Community§  Energy...
Learning & Growth PerspectiveThe priorities to create a climate that supportsorganizational change, innovation, and growth...
The Balanced ScorecardVision&StrategyFinancialsProcessesLearning,Innovation& GrowthCustomersLong termInternalShort term“If...
Strategy Map Balanced Scorecard Action PlanPerspective Objectives Measurement Target Initiative BudgetFinancial Profitabil...
Want more?Version 3.2 March 2011© Marc Sniukas73
www.sniukas.comVersion 3.2 March 2011© Marc Sniukas74
Download this presentationas PowerPoint file.Visit:www.e-junkie.com/sniukasVersion 3.2 March 2011© Marc Sniukas75€ 2.99
A presentation by Marc Sniukaswww.sniukas.comVersion 3.2 March 2011© Marc Sniukas76Marc is a partner at Doujak Corporate D...
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What is strategy?

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  • Use these for the manual & give them a form which holds all the possible choices, which they can pick from. OMV Strategy & Finance February 2007
  • What is strategy?

    1. 1. The Economist“Nobody really knowswhat strategy is.”Version 3.2 March 20111 © Marc Sniukas
    2. 2. Download this presentationas PowerPoint file.Visit:www.e-junkie.com/sniukasVersion 3.2 March 2011© Marc Sniukas2€ 2.99
    3. 3. What is Strategy?A (very) brief introduction.
    4. 4. Why do we need a strategy?§  Without a strategy, we fill our time with…… what we want, or… what we think the boss wants, or… by reacting.§  Without a strategy, time and resources are easily wasted on piecemeal,disparate activities.Version 3.2 March 2011“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 44 © Marc Sniukas
    5. 5. Five DefinitionsStrategy as…§  a consciously and purposefully developed plan;§  a ploy to outmaneuver a competitor;§  a pattern in a stream of actions, whether intended or not;§  a position defined either with respect to a competitor, in the context of anumber of competitors, or with respect to markets; and as§  a perspective, i.e. a certain mindset of how to perceive the world.Mintzberg, H. (1987). "The Strategy Concept I: Five Ps For Strategy." California Management Review 30(1) Fall: 11-24.Version 3.2 March 20115 © Marc Sniukas
    6. 6. Mintzberg‘s 10 Schools§  Being unsatisfied with the strategy discussion, Henry Mintzberg, professorat McGill University Canda, set out to structure the literature and thinking onstrategy. He discovered 10 different schools of thought on strategy, arguingthat every one of them describes a specific part of strategy.§  Just like the blind men describe the elephant….Version 3.2 March 2011© Marc Sniukas6
    7. 7. Mintzberg‘s 10 SchoolsPrescriptive§  Design§  Planning§  PositioningDescriptive§  Configuration§  Cognitive§  Cultural§  Entrepreneurial§  Environmental§  Learning§  Power7 © Marc Sniukas Version 3.2 March 2011
    8. 8. Mintzberg‘s 10 Schools : The 3 Prescriptive onesDesign School§  Strategy as a process of conception§  Goal = Achieving the essential fit between–  internal strengths & weaknesses and–  external opportunities & threats§  70sVersion 3.2 March 2011© Marc Sniukas8
    9. 9. Mintzberg‘s 10 Schools : The 3 Prescriptive onesPlanning School§  Strategy as a formal process§  Takes on most of the design schools assumptions§  Process: Formal, Decomposable, Steps§  Supported by checklists and formal techniques§  Igor Ansoff§  mid 70sVersion 3.2 March 2011© Marc Sniukas9
    10. 10. Mintzberg‘s 10 Schools : The 3 Prescriptive onesPositioningSchool§  Strategy as an analytical process§  Generic positions selected through formalized analyses of industrysituations§  Michael Porter§  80sVersion 3.2 March 2011© Marc Sniukas10
    11. 11. Mintzberg‘s 10 Schools : The 7 Descriptives onesConfiguration School§  Strategy as a process of transformation§  Process varies according to company configurationVersion 3.2 March 2011© Marc Sniukas11
    12. 12. Mintzberg‘s 10 Schools : The 7 Descriptives onesCognitive School§  Strategy as a mental process and creative interpretationsVersion 3.2 March 2011© Marc Sniukas12
    13. 13. Mintzberg‘s 10 Schools : The 7 Descriptives onesCultural School§  Strategy as a social process rooted in the company‘s culture§  Focuses on common interest & integrationVersion 3.2 March 2011© Marc Sniukas13
    14. 14. Mintzberg‘s 10 Schools : The 7 Descriptives onesEntrepreneurial School§  Strategy as a visionary process§  Intuition§  The leader is centralVersion 3.2 March 2011© Marc Sniukas14
    15. 15. Mintzberg‘s 10 Schools : The 7 Descriptives onesEnvironmental School§  Strategy as a reactive process§  Influenced by the demands of the environmentVersion 3.2 March 2011© Marc Sniukas15
    16. 16. Mintzberg‘s 10 Schools : The 7 Descriptives onesLearning School§  Strategy as an emergent process§  Organisational Learning§  Formulation & implementation interwineVersion 3.2 March 2011© Marc Sniukas16
    17. 17. Mintzberg‘s 10 Schools : The 7 Descriptives onesPower School§  Strategy as a process of negotiation§  Micro vs Macro, i.e. company vs individual interests§  Political§  Focuses on personal interestVersion 3.2 March 2011© Marc Sniukas17
    18. 18. Dimensions of StrategyProcess, Content, ContextVersion 3.2 March 201118 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    19. 19. Strategy ProcessVersion 3.2 March 201119 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    20. 20. Strategy FormationVersion 3.2 March 201120 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    21. 21. Realized StrategyStrategy Formation ActivitiesVersion 3.2 March 201121 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    22. 22. Strategy ContentVersion 3.2 March 201122 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    23. 23. Strategy ContextVersion 3.2 March 201123 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    24. 24. Strategic TensionsVersion 3.2 March 201124 © Marc SniukasDimension Topic Tension“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    25. 25. Setting StrategyA great strategy has pieces,…but they form a coherentwhole!Version 3.2 March 201125 © Marc Sniukas
    26. 26. “Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 4Putting strategy in its placeStrategic Analysis§ Industry Analysis§ Customer/marketplace trends§ Customer activity cycle§ Environment forecast§ Competitor analysis§ Assessment of internal strengths,weaknesses, resources, culture§ StakeholdersMission§ Fundamentalpurpose§ Values§ VisionObjectives§ Specific targets,short & long termStrategy!The central integrated,externally oriented conceptof how we willachieve our objectivesSupportingOrganizationalArrangements§ Structure§ Process§ Symbols§ Rewards§ People§ Activities§ Functional policiesIt’s not about thesequence.The robustnessof the whole iskey !Version 3.2 March 201126 © Marc Sniukas
    27. 27. The five major elements of strategyArenasStagingDifferentiatorsVehiclesEconomic LogicVersion 3.2 March 201127 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 4
    28. 28. The five major elements of strategyEconomic LogicArenasStagingDifferentiatorsVehiclesWhere will we be active?How will we get there?How will we win in the market place?What will be our speedand sequence of moves?How will we obtain our returns?Version 3.2 March 201128 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 4
    29. 29. The five major elements of strategyStrategy is an integrated set of choices.§  Arenas Where will we be active?§  Vehicles How will we get there?§  Differentiators How will we win in the market place?§  Staging What will be our speed and sequence of moves?§  Economic Logic How will we obtain our returns?Version 3.2 March 201129 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 4
    30. 30. The five major elements of strategyArenas: Where will we be active?§  With how much emphasis ?§  Which product categories ?§  Which market segments ?§  Which geographic areas ?§  Which core technologies ?§  Which value-creating stages ?Version 3.2 March 201130 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 41
    31. 31. The five major elements of strategyVehicles: How will we get there?§  The means for attaining the needed presence in the identified arenas§  Internal development ?§  Joint ventures / alliances ?§  Licensing / franchising ?§  Acquisitions ?§  Which channels ?Version 3.2 March 201131 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 42
    32. 32. The five major elements of strategyDifferentiators: How will we win?§  The reasons that customers will choose us§  Image ?§  Customization ?§  Price ?§  Styling ?§  Product reliability ?§  Anything else ?Version 3.2 March 201132 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 43
    33. 33. The five major elements of strategyStaging: What will be our speed & sequence of moves?§  Driven by availability of resources, urgency, need for credibility andneed for early wins§  Speed of expansion ?§  Sequence of initiatives ?Version 3.2 March 201133 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 44
    34. 34. The five major elements of strategyEconomic Logic: How will we obtain our returns?§  How profits will be generated, above the firm’s cost of capital.§  Lowest costs through scale advantages ?§  Lowest costs through scope and replication advantages ?§  Premium prices due to unmatchable service ?§  Premium prices due to proprietary features ?Version 3.2 March 201134 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 45
    35. 35. The five major elements of strategyEconomic Logic: How will we obtain our returns?§  What generates cash ?§  What decides your margins ?§  What generates market share growth ?§  How fast do sales turn into cash ?§  What numbers / ratios tell us we’re successful ?§  What are our underlying core capabilities ?Version 3.2 March 201135 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 45
    36. 36. Testing the Quality of YourStrategyVersion 3.2 March 201136 © Marc Sniukas
    37. 37. Some key evaluation criteriaDoes your strategy fit within what’s going on in the environment?Does your strategy exploit your key resources & capabilities?Is your strategy implementable?Do you have enough resources to pursue this strategy?Are the elements of your strategy internally consistent?Will your envisioned differentiation be sustainable?Version 3.2 March 201137 © Marc Sniukas
    38. 38. Some key evaluation criteria§  Does your strategy exploit your key resources & capabilities?With your particular mix of resources, does this strategy give you a good head start oncompetitors? Can you pursue this strategy more economically than competitors?§  Will your envisioned differentiation be sustainable?Will competitors have difficulty matching you? If not, does your strategy explicitly include aceaseless regimen of innovation & opportunity creation?§  Are the elements of your strategy internally consistent?Have you made choices of arenas, vehicles, differentiators, and staging, and economic logic? Dothey all fit and mutually reinforce each other?§  Is your strategy implementable?Will your key constituencies allow you to pursue this strategy? Can your organization make itthrough the transition? Are you & your management team able & willing to lead the changes?§  Do you have enough resources to pursue this strategy?Do you have the money, managerial time & talent, & other capabilities to do all you envision? Areyou sure you’re not spreading your resources too thinly, only to be left with a collection of feeblepositions?Version 3.2 March 201138 © Marc Sniukas
    39. 39. Putting strategy in its placeStrategic Analysis§ Industry Analysis§ Customer/marketplace trends§ Customer activity cycle§ Environment forecast§ Competitor analysis§ Assessment of internal strengths,weaknesses, resources, cultureMission§ Fundamentalpurpose§ Values§ VisionObjectives§ Specific targets,short & long termStrategy!The central integrated,externally oriented conceptof how we willachieve our objectivesSupportingOrganizationalArrangements§ Structure§ Process§ Symbols§ Rewards§ People§ Activities§ Functional policiesVersion 3.2 March 201139 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 4
    40. 40. What drives competition in the industry?Porter’s Five ForcesSuppliersPotential EntrantsBuyersSubstitutesThe IndustryThreat of new entrantsBargaining power ofcustomers / buyersThe threat ofsubstitue productsBargaining powerof suppliersCompetition withinthe industryAn industry =the group of companiesproducing productsfulfilling the samecustomer needs.Version 3.2 March 201140 © Marc Sniukas
    41. 41. What drives competition in the industry?Porter’s Five ForcesVersion 3.2 March 201141 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    42. 42. Anything else?Version 3.2 March 201142 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    43. 43. Let’s move from the industry to the business!SuppliersPotential EntrantsBuyersSubstitutesThe IndustryVersion 3.2 March 201143 © Marc Sniukas
    44. 44. Industries, Markets and BusinessesVersion 3.2 March 201144 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    45. 45. Business System, Model & the value chain§  A business system is the chain of activities through which a product isdeveloped, produced and delivered to its end-customers.§  A business model describes the way a company has selected to exploit itscapabilities, relative to the industry characteristics.§  The value chain is the chain of activities through which a product isdeveloped, produced and delivered to it end-customers, when done by onecompany.Adapted from Prof. Xavier Gilbert & Jim Pulcrano, IMDVersion 3.2 March 201145 © Marc Sniukas
    46. 46. What’s your business model?Version 3.2 March 201146 © Marc Sniukas
    47. 47. The Business Model: 9 Building Blocks§  What‘s your value proposition?§  Who are your customers? Which customer segments do you serve?§  What‘s your relationship to your customers?§  How do you reach your customers? Which channels do you use?§  What key resources does your company possess?§  What key activities does your company perform?§  How are your key partners?§  Where does the money come from? Revenue streams?§  What does it cost? Cost structure?Version 3.2 March 2011© Marc Sniukas47Adapted from Alexander Osterwalder www.alexosterwalder.com
    48. 48. Analyzing your company’svalue chainVersion 3.2 March 201148 © Marc Sniukas
    49. 49. The Activity SystemValue Chain§  An activity system is an integrated set of value creation processes leadingto the supply of product and/ or service offerings. This activity system isfrequently referred to as the value chain. (Porter, 1985)Version 3.2 March 201149 © Marc Sniukas“Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    50. 50. The Activity SystemPrimary and Support ActivitiesPrimaryActivitiesInbound LogisticsOperationsOutbound LogisticsMarketing & SalesServiceProcurementTechnologyDevelopmentHRMFirm InfrastructureSupportActivitiesActivities associated with receiving, storing,and disseminating inputsActivities associated with transforming inputsinto final productsCollecting, storing, and physically distributingproducts/ services to buyersProviding a means by which buyers canpurchase the productProviding service to enhance or maintain thevalue of productsPurchasing of inputs to facilitate all otheractivitiesThe improvement of technologies throughoutthe firmActivities associated with the management ofpersonnelAll general activities that support the entirevalue chainVersion 3.2 March 201150 © Marc SniukasFollowing “Strategy: Process, Content, Context” 3rd edition De Wit & Meyer Thomson Learning 2004
    51. 51. Implementing StrategiesWhat matters most to Strategy ExecutionBuilding a Strategy-Focused-OrganizationThe Balanced ScorecardStrategy MapsVersion 3.2 March 201151 © Marc Sniukas
    52. 52. Putting strategy in its placeStrategic Analysis§ Industry Analysis§ Customer/marketplace trends§ Customer activity cycle§ Environment forecast§ Competitor analysis§ Assessment of internal strengths,weaknesses, resources, cultureMission§ Fundamentalpurpose§ Values§ VisionObjectives§ Specific targets,short & long termStrategy!The central integrated,externally oriented conceptof how we willachieve our objectivesSupportingOrganizationalArrangements§ Structure§ Processes§ Symbols§ Rewards§ People§ Activities§ Functional policiesVersion 3.2 March 201152 © Marc Sniukas“Are you sure you have a strategy?” Donald C. Hambrick and James W. Frederickson Academy of Management Executive 2001 Vol. 15 No. 4
    53. 53. What matters most to Strategy Execution?Information Decision  RightsMotivators StructureVersion 3.2 March 2011© Marc Sniukas53“The Secrets to Successful Strategy Execution.” Gary L. Neilson, Karla L. Martin, and Elizabeth Powers. Harvard Business Review June 2008
    54. 54. What matters most to Strategy Execution? Ranking1.  Everyone has a good idea of the decisions and actions for which he or she is responsible.2.  Important information about the competitive environment gets to headquarters quickly.3.  Once made, decisions are rarely second-guessed.4.  Information flows freely across organizational boundaries.5.  Field and line employees usually have the information they need to understand the bottom-line impact of their day-to-daychoices.6.  Line managers have access to the metrics they need to measure the key drivers of their business.7.  Managers up the line get involved in operating decisions.8.  Conflicting messages are rarely sent to the market.9.  The individual performance-appraisal process differentiates among high, adequate, and low performers.10.  The ability to deliver on performance commitments strongly influences career advancement and compensation.11.  It is more accurate to describe the culture of this organization as “persuade and cajole” than “command and control.”12.  The primary role of corporate staff here is to support the business units rather than to audit them.13.  Promotions can be lateral moves (from one position to another on the same level in the hierarchy).14.  Fast-track employees here can expect promotions more frequently than every three years.15.  On average, middle managers here have five or more direct reports.16.  If the firm has a bad year, but a particular division has a good year, the division head would still get a bonus.17.  Besides pay, many other things motivate individuals to do a good job.Version 3.2 March 2011© Marc Sniukas54“The Secrets to Successful Strategy Execution.” Gary L. Neilson, Karla L. Martin, and Elizabeth Powers. Harvard Business Review June 2008
    55. 55. Aligning & Focusing Resources on StrategyBusiness Units Executive TeamInformationTechnologyBalancedScorecardHumanResourcesBudget &CapitalInvestmentsStrategyAdapted from “The Strategy-Focused-Organization” Robert Kaplan and David Norton Harvard Business School Press 2001Version 3.2 March 201155 © Marc Sniukas
    56. 56. The Principles of a Strategy-Focused-OrganizationBalancedScorecardStrategyMobilize Change throughExecutive LeadershipMobilizationGovernance ProcessStrategic Management SystemMake Strategy aContinual ProcessLinking Budgets and StrategiesAnalytics and Information SystemsStrategic LearningTranslate the Strategyto Operational TermsStrategy MapsBalanced ScorecardAlign the Organizationto StrategyCorporate RolesBusiness Unit SynergiesShared Service SynergiesMake StrategyEveryone’s Everyday JobStrategic AwarenessPersonal ScorecardsBalanced PaychecksVersion 3.2 March 201156 © Marc SniukasAdapted from “The Strategy-Focused-Organization” Robert Kaplan and David Norton Harvard Business School Press 2001
    57. 57. Learning &GrowthPerspectiveInternalPerspectiveCustomerPerspectiveFinancialPerspectiveOrganizational CapitalInformation CapitalHuman CapitalOperationsManagement- Supply- Production- Distribution- Risk MgmtCustomerManagement- Selection- Acquisition- Retention- GrowthInnovation- Opportunity ID- R&D Portfolio- Design/Develop- LaunchRegulatory &Social- Environment- Safety & Health- Employment- CommunityCustomer Value PropositionPrice Quality Availability SelectionFunctionality BrandPartnershipServiceProduct / Service Attributes Relationship ImageCulture Leadership Alignment TeamworkLong-TermValueExpand RevenueOpportunitiesEnhance  Customer  Value  Increase AssetUtilizationImprove CostStructureProductivity Strategy Growth StrategyVersion 3.2 March 201157 © Marc Sniukas
    58. 58. Financial PerspectiveLong TermShareholder ValueProductivity StrategyImprove CostStructureIncrease AssetUtilizationExpand RevenueOpportunitiesGrowth Strategy§  Reduce cashexpenses§  Eliminate defects§  Improve yields§  Manage capacityfrom existing assets§  Make incrementalinvestments toeliminate bottlenecks§  New sources ofrevenue§  New products§  New markets§  New partnersThe strategy for growth, profitability,and risk viewed from the perspectiveof the shareholder.EnhanceCustomer Value§  Improveprofitability§  Expandrelationship withexistingcustomersVersion 3.2 March 201158 © Marc Sniukas
    59. 59. Customer PerspectivePriceQualityAvailabilitySelectionFunctionalityBrandPartnershipServiceProduct / Service Attributes Relationship ImageCustomer Value PropositionThe strategy for creating value and differentiationfrom the perspective of the customer.Version 3.2 March 201159 © Marc Sniukas
    60. 60. Customer PerspectivePriceQualityAvailabilitySelectionFunctionalityBrandPartnershipServiceProduct / Service Attributes Relationship ImageOperational Excellence StrategyDifferentiatorGeneralRequirementQuality & selection in key categorieswith unbeatable prices.„SmartShopper“Version 3.2 March 201160 © Marc Sniukas
    61. 61. Customer PerspectivePriceQualityAvailabilitySelectionFunctionalityBrandPartnershipServiceProduct / Service Attributes Relationship ImageCustomer Intimacy StrategyDifferentiatorGeneralRequirementPersonal servicetailored to produceresults for customersand build long-termrelationship.„TrustedBrand“Version 3.2 March 201161 © Marc Sniukas
    62. 62. Customer PerspectiveVersion 3.2 March 2011Price  Quality  Availability  Selec9on  Func9onality  Brand  Partnership  Service  Product  /  Service  A/ributes   Rela5onship   Image  Product  Leadership  Strategy  Differen(ator  General  Requirement  Unique  products  and  services  that  „push  the  envelope“.  „The  Best  Product“  62 © Marc Sniukas
    63. 63. Internal PerspectiveThe strategic priorities for various business processes, which create customer and shareholder satisfaction.Operations ManagementProcessesCustomer ManagementProcessesInnovationProcessesRegulatory & SocialProcessesProcesses thatproduce & deliverproducts & services.Processes thatenhance customervalue.Processes that createnew products &services.Processes thatimprove communities& the environment.• Supply Chain Mgmt• Operations Efficiencycost reduction, quality &cycle timeimprovements• Capacity Mgmt• Production• Distribution• Risk Mgmt• Selection• Acquisition• Retention• Growth• Solution Development• Customer Service• Relationship Mgmt• Advisory Services• Invention• Product Development /Design• Speed to Market /Launch• Joint Ventures /Partnerships• Opportunity ID• R&D Portfolio• Environment• Safety & Health• Employment practices• Community• Social„Achieve OperationalExcellence“„Increase CustomerValue“„Build the Franchise“ „Be a Good CorporateCitizen“Version 3.2 March 201163 © Marc Sniukas
    64. 64. Strategic Internal ProcessesInternal ProcessStrategyOperationsManagementProcessesCustomerManagementProcessesInnovationProcessesOperationalExcellence§  Supply Chain Mgmt§  OperationsEfficiency§  Capacity MgmtMeet basicrequirementsMeet basicrequirementsCustomer IntimacyMeet basicrequirements§  SolutionDevelopment§  Customer Service§  Relationship Mgmt§  Advisory ServicesMeet basicrequirementsProductLeadershipMeet basicrequirementsMeet basicrequirements§  Invention§  ProductDevelopment§  ExploitationVersion 3.2 March 201164 © Marc Sniukas
    65. 65. Operations ManagementStrategies for Achieving Operational ExcellenceSupply Production Distribution Risk Mgmt§  Develop supplierrelations§  Lower cost ofownership§  Just-in-Time delivery§  High-quality supply§  New ideas fromsuppliers§  Supplier partnerships§  Outsource maturenonstrategic services§  Improve inventorymanagement§  Lower cost ofproduction§  Continous process &quality improvements§  Process cycle time§  Fixed asset utilization§  Improve hardwareperformance§  Working capitalefficiency§  Reduction of assetdowntime§  Create flexibleinfrastructure§  Simplify wherepossible§  Lower cost to serve§  Responsive deliverytime§  On spec; on Time§  Enhance quality§  Improve inventorymanagement§  Financial risk / highcredit rating§  Operating risk§  Technology risk§  Elimination ofenvironmental, safety,& health-threatheningincidentsImprove  Cash  Flow  Version 3.2 March 201165 © Marc Sniukas
    66. 66. Customer ManagementStrategies for Increasing Customer ValueSelection Acquisition Retention Growth§  Understand segments& needs§  Capture knowledgeabout customers§  Screen unprofitablecustomers§  Target high-valuecustomers§  Strategic accounts§  Manage the brand§  Communicate valueproposition§  Customize massmarketing§  Acquire/convert leads§  Develop dealernetwork§  Premium customerservice§  „sole source“partnerships§  Service excellence§  Lifetime customers§  Expand, deepen, orredefine relationshipswith existing customers§  Become trustedadvisor & consultant§  Cross-selling§  Solution selling§  Partnering/ integratedmanagement§  Customer education§  Integrate with thecustomer‘s value chainto deliver solutionsVersion 3.2 March 201166 © Marc Sniukas
    67. 67. Customer ManagementStrategies for Increasing Customer Value§  Empower front-line employees withinformation they need§  Ensure that everyone knows thecustomer§  Make company knowledge available tocustomers§  Strategic Account Management§  Increase customer loyalty§  Optimize packaging§  Redesign order fullfillment§  Streamline customer interactions§  CRM / integrated mgmt system§  Identify, upgrade, or exit unprofitableaccounts§  Grow & retain high-value customers(HVCs)§  Provide premium services to retainHVCs§  Broaden the relationship with HVCs§  Excel at customer interaction§  Best-in-class franchise / distributionteamsVersion 3.2 March 201167 © Marc Sniukas
    68. 68. Innovation ManagementStrategies for Building the FranchiseIdentifyOpportunitiesR&D portfoliomgmtDesign &DevelopmentLaunch§  Anticipate customerneeds§  Identifiy newopportunities§  Ensure that ideasflow§  Choose & managemix of projects§  Extend products tonew applications§  collaborate§  Manage productsthroughdevelopment stages§  Reducedevelopment cycletime§  Reducedevelopment costs§  Reuse what otherparts of thecompany havealready learned§  Ramp-up time§  Production cost,quality, cycle time§  Achieve initial salesgoals§  Reduce time tomarketVersion 3.2 March 201168 © Marc Sniukas
    69. 69. Regulatory & SocialStrategies for Being a Good Corporate CitizenEnvironment Safety & Health Employment Community§  Energy & resourceconsumption§  Water & airemissions§  Solid waste disposal§  Productenvironmental impact§  Environmentalincidents§  Safety incidents§  Health§  Diversity§  Employ theunemployable§  Community programs§  Aliances withnonprofits§  Manage relationshipswith external,legitimizingstakeholders§  Maintain publicsupportVersion 3.2 March 201169 © Marc Sniukas
    70. 70. Learning & Growth PerspectiveThe priorities to create a climate that supportsorganizational change, innovation, and growth.Organizational CapitalHuman Capital Information Capital+ +§  Skills§  Knowledge§  Training§  Functional Excellence§  Leadership skills§  Integrated view of thecompany among employees§  Best practice sharing§  Systems§  Databases§  Networks§  Infrastructure§  Applications§  New technology thatencourages & aids processimprovements§  Culture§  Leadership§  Aligment of personalgoals w/ BSC / Strategy§  Teamwork§  Awareness§  understanding of strategy§  Readiness§  Motivation§  morale & satisfaction§  employee feedbackVersion 3.2 March 201170 © Marc Sniukas
    71. 71. The Balanced ScorecardVision&StrategyFinancialsProcessesLearning,Innovation& GrowthCustomersLong termInternalShort term“If we succeed, how do welook to our shareholders?”External“To achieve our vision, howmust we look to ourcustomers?”“To satisfy our customers, whichprocesses must we excel?”“To achieve the strategy, howmust the organization learn?”Version 3.2 March 201171 © Marc Sniukas
    72. 72. Strategy Map Balanced Scorecard Action PlanPerspective Objectives Measurement Target Initiative BudgetFinancial Profitability ROCE 25% € XXXCustomer Attract &retain morecustomers# repeat customers# customers70%+12%ImplementCRMQuality Mgmt€ XXX€ XXXInternal AssetUtilizationInventory Turnover 4x InventoryMgmt€ XXXLearning &GrowthDevelop thenecessaryskillsDevelop thesupportsystemStrategic jobreadinessInfo systemavailabilityY1-70%Y3-90%Y5-100%100%Staff training € XXX€ XXXStrategy Maps & the Balanced ScorecardVersion 3.2 March 201172 © Marc Sniukas
    73. 73. Want more?Version 3.2 March 2011© Marc Sniukas73
    74. 74. www.sniukas.comVersion 3.2 March 2011© Marc Sniukas74
    75. 75. Download this presentationas PowerPoint file.Visit:www.e-junkie.com/sniukasVersion 3.2 March 2011© Marc Sniukas75€ 2.99
    76. 76. A presentation by Marc Sniukaswww.sniukas.comVersion 3.2 March 2011© Marc Sniukas76Marc is a partner at Doujak Corporate Development, a boutique consultingcompany partnering with leadership teams and their organizations to drivegrowth through strategic innovation and organizational transformation.Learn more at www.doujak.eu

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