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Competing for the future

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Competing for the future

  1. 1. COMPETING FOR THE FUTURE Gary Hamel & C.K. Prahalad BUS8010 Contributors to Strategic Management
  2. 2. WHAT ARE THE PROBLEMS OF THE FIRMS?
  3. 3. WHAT ARE THE PROBLEMS?• With a more detailed approach of strategic management at that time, why did some companies that used to have their golden days fail in global competition? • Poor and short-term effects of restructuring and reengineering • Overemphasis in a clearly defined framework of strategic management • Lack of the view points for the future
  4. 4. REFLECTION OF RESTRUCTURING• A vicious circle: • Restructuring or reengineering • Denominator management • Less profitable resulting from giving up potential competence • Incapability of competing in global market • Poor overall performance
  5. 5. REFLECTION OF REENGINEERING• Only expending all energies to stay in the competition but not able to be the market leader • Neglecting the vision for the future • Doing what “everyone is doing” • Could be eliminated once the business environment has a sudden change
  6. 6. REFLECTION OF STRATEGIC MANAGEMENT Environmental Analyzing Analyzing Analyzing Macro- Micro- Internal Scanning Environment Environment Environment Strategy Corporate Business Functional Formulation Level Level Level• The approach we have being using is not future-oriented and mostly focus on the current situation
  7. 7. REFLECTION OF FUTURE -ORIENTATION• What should be striven? • Market Share versus Opportunity Share• New businesses have to be discovered rather than be analyzed• Competences could be out-of-date when competition becomes intensive
  8. 8. HOW COULD WE TURNAROUND?
  9. 9. SETTING A NEW MINDSET• Focus on capturing the opportunity share• Understanding of interfrim competition• Requiring a integrated system• The use of strategy as addressing the future direction and destination rather than applying for the maximization of short-term profits• Perseverance for the protracted war of multistage competition
  10. 10. WHAT IS THE RACE WE ARE IN? Competition for Market Position Competition to and Market Foreshorten Share Migration Paths Competition for Industry Foresight and Intellectual Leadership
  11. 11. COMPETITION FOR INDUSTRY FORESIGHTAND INTELLECTUAL LEADERSHIP
  12. 12. COMPETING FOR INDUSTRYFORESIGHT• Think beyond the business assumptions! • The boundaries between businesses, between products, and between served customers are blurred and overlapping. • Top management should be able to observe and predict the future trend of business in stead of the firm’s current or short-term performance. • Firms have to challenge those assumptions and embrace curiosity of imaging a different future so as to discover unexploited opportunities that lie underneath those undiscovered or unsatisfied human needs.
  13. 13. STRATEGIC ARCHITECTURE• “a high-level blueprint for the deployment of new functionalities, the acquisition of new competencies or the he reconfiguring of migration of existing competencies, and the interface with customers” (p. 118) • It requires a long-term perspective • It requires a willingness of risk-taking • It requires a bigger ambition
  14. 14. STRATEGIC INTENT• Resourcefulness can be the supplement of limited strategic resources.• Strategic intent is the source providing emotional and intellectual energy to break through the limitations, so it implies: • A sense of direction • A sense of discovery • A sense of destiny• It has to be personalized to set clear corporate challenges that draw everyone’s attention on the next key advantage or capability to be built• It has to be clearly communicated throughout the whole organization and get everyone involved so as to develop the collective intelligence
  15. 15. RESOURCE LEVERAGE• Resources are limited and hard to obtained, make the best use of resource is crucial for firms to compete for the future. Concentrating Accumulating Conserving Complementing Recovering
  16. 16. COMPETITION TO FORESHORTENMIGRATION PATHS
  17. 17. SHAPE THE FUTURE• A firm has to be able to transform the intellectual leadership into market leadership by creating the virtual monopoly in a particular new product category.• Migration paths need to be carefully managed during the competition: • Developing intellectual leadership (foresight and strategic architecture) • Shaping and foreshortening the migration paths • Competing market power and position• Maximizing share of influence by coalitions and setting industrial standards.
  18. 18. CORE COMPETENCES• Core competences are those integrated skills that are not easy for competitors to imitate, can be leveraged widely to many products and markets as well as contribute to the end consumer’s experienced benefits.• What managers should bear in mind that: • Core competences needs to be clearly identified • Core competences needs to be widely deployed • New core competences need to be developed continuously
  19. 19. COMPETITION FOR MARKET POSITION ANDMARKET SHARE
  20. 20. COMPETING IN A GLOBAL SCOPE Propagation Predisposition Proximity Global PreemptionExpeditionaryMarketing

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